107B LB890 LPS Testimony
January 25, 2022
Sen. Lynne Walz, Chairperson
Sen. Jen Day
Sen. Lou Ann Linehan
Sen. Terrell McKinney
Sen. Adam Morfeld
Sen. Dave Murman
Sen. Patty Pansing Brooks
Sen. Rita Sander
Legislative Bill 890 represents extraordinary work by Senator Walz and the team involved in drafting the bill. This bill represents a genuine effort to bring the education community together and advance ideas that monumentally change TEEOSA. LB 890 reduces our reliance on property taxes and will provide property tax relief if fully implemented and funded. Various mechanisms in the bill offer solutions to the challenges we have been discussing for decades.
Lincoln Public Schools offers this testimony in support of LB 890. There are components of the bill we would not traditionally support, however, at the end of the day LB 890 dramatically increases the state’s investment in PK-12 education. The most powerful element of the bill for equalized school districts is lowering the local effort rate. Through lowering the local effort rate from $1.00 to 85 cents and then 75 cents, the state will fund a larger portion of the school district formula needs. Lowering the local effort rate results in more state funding for equalized school districts and decreases the required funding necessary from property taxes.
Equalization aid is a balancing tool that ensures every child’s access to quality education in Nebraska. The importance and prioritization of equalization must remain at the forefront of the formula even as new components are introduced and funding is shifted. Lincoln Public Schools would like to see the section defining the process to reduce state aid in the future if necessary, as defined in LB 890 section 29, amended to protect equalization. This can be done by replacing the second priority adjustment to the local effort rate with an adjustment to the allocated income tax percentage. A reduction in the allocated income tax funding would impact every school district. An adjustment to the local effort rate would only impact equalized school districts.
In addition, LB 890 introduces a district-specific maximum levy. This is an important concept and an update to the formula to match the realities across the state. School districts’ property value per student at $1.00 of taxing authority ranges from approximately $3,200 per student to $62,000 per student. The highest being roughly 20 times the lowest. District-specific maximum levies offer a response to the widely varying valuation across the state.Funding to support the education of our state’s children must be sustainable and reliable. Property taxes are a stable revenue source. School districts are understandably cautious in embracing the shift to state funding proposed in LB 890. Dedicating twenty percent of state income tax revenue is a big lift. It is imperative that revenue sources are dependable and local taxing authority is available if state funding falls short.
Sen. Walz should be commended for her collaborative leadership and commitment to listening throughout the process of developing LB 890. She truly embraced the education community in a positive and productive way.
Sincerely,
Liz Standish MBA, EdD
Associate Superintendent for Business Affairs
