If Gov. Jim Pillen's school funding plan comes to fruition, state funds alone would allow Lincoln Public Schools to cut its property tax request by more than 6%, a number that's even higher for neighboring districts like Waverly.
But with the Legislature only beginning to mull the package of bills, it's far too early to know what proposals will emerge from the session and whether school districts would indeed apply dollar-for-dollar any additional state aid to reduce their property tax levies.
Under the governor's plan, all districts would receive $1,500 in state aid for every student and enough funding to cover 80% of a district's special-education costs. The $1,500 per-pupil aid, however, would simply be subtracted from the state aid LPS already receives as part of the state's so-called equalization state aid formula. Put simply, the formula compares a district's needs to its resources, like taxable property value.
Still, the proposed boost in special-education funding would mean an extra $22.6 million in state aid. Last budget cycle, LPS received $115 million from the state.
If the Lincoln Board of Education used every cent of the extra state support to cut property taxes, it could potentially drop its total tax levy of $1.2072 per $100 of valuation by about 7 cents. For the owner of a $200,000 home, that would mean $158 in annual savings on their property tax bill.
Lincoln Board of Education member Kathy Danek testified before a legislative committee earlier this month in support of increasing special-education funding. Currently, the state funds about 40% of LPS' special-education expenditures.
School officials, however, maintain it's too preliminary to say what kind of impact more state funds would have on the budget.
Currently, "a large portion of that special-education cost is falling to property taxpayers," said Liz Standish, LPS associate superintendent for business affairs. "This would be a new revenue source, and the board would deliberate on how to develop that budget and deliberate about the impact on the levy."
Neighboring districts like Waverly and Seward, which currently do not receive equalization aid from state coffers, would be able to slash their tax levies at an even higher rate: More than 17%, according to estimates.
Waverly would see a $4.2 million increase in state support, enough to potentially hand more than $400 back to taxpayers owning homes valued at $200,000.
"That would be quite a significant chunk of change," Waverly Superintendent Cory Worrell said of the proposed increase in state aid.
Meanwhile, Seward would be able to cut its levy by 15 cents, representing potential annual taxpayer savings of $325 for a typical homeowner.
"It's a big boost," said Seward Superintendent Josh Fields, who is the president of STANCE, or Schools Taking Action for Nebraska Children's Education, which represents midsized schools like Waverly, Norris and Crete.
Fields, who served on a committee convened by Pillen to examine school funding, testified on behalf of STANCE in support of LB583, the bill that outlines the funding plan. Sen. Rita Sanders of Bellevue introduced the bill on Pillen's behalf.
To achieve the governor's goal of cutting property taxes, the group examined changes to how the state funds public schools.
"I think that it's trying to find a way to have all boats rise," Fields said.
The Legislature's fiscal office estimated the increase in special-education funding to cost $253 million in the first year, the Omaha World-Herald reported.
The per-student aid proposed would cost $103 million per year, according to the governor's office. That number, however, is likely to drop if the $1,500 payment is dropped for so-called option students — those who opt out of one district to attend another. Schools already get state aid for taking on option students.
That amendment hasn't been introduced, but "that is the intention," the governor's office said in an email. If the bill is amended, districts with a higher number of option students — like Norris — would see a decrease in aid from the original proposal.
"I feel it's too early to tell what could happen with LB583," Norris Superintendent Brian Maschmann said via email. "There are winners and losers with any of the educational bills."
One of those, Sen. Tom Briese's LB589, would set a 3% annual revenue cap on school districts, which some area school officials have said goes against local control.
Both LPS and STANCE are officially neutral on the bill. Standish said revenue caps must be flexible to address inflation pressures and adequately compensate staff. Payroll makes up the large majority of a school district's expenditures.
In smaller districts, the cap could be an obstacle to paying for unexpected costs.
"If an HVAC system goes out in a small district, it's going to cost you," Fields said.
Despite the kinks that need to be worked out, officials say there's a certain amount of momentum behind the governor's proposals.
"It's always exciting talking about adding money to education," Fields said. "Now it's just the devil in the details."
Across Nebraska, school districts are tracking legislation tied to how the state funds public schools. Despite the kinks that need to be worked out, officials say there's a certain amount of momentum behind Gov. Jim Pillen's proposals.