108A LB589 LPS Testimony

February 1, 2023

Sen. Lou Ann Linehan, Chairperson
Sen. Joni Albrecht
Sen. Eliot Bostar
Sen. Tom Briese
Sen. George Dungan
Sen. Kathleen Kauth
Sen. Dave Murman
Sen. R. Brad von Gillern

The Lincoln Public School District appreciates the opportunity to participate in discussions related to school funding lead by Governor Pillen. The opportunity to be at the table and exchange ideas in a consensus-seeking manner is valued. LPS recognizes and values the investment in and prioritization of school funding. The overall tone is one of solution-seeking. LPS was opposed to the original version of LB 589 but has been able to move to a more neutral position with continued progress on the bill.

School Board Members are elected by a vote of the people to establish a budget and set the tax asking based on their local context. This work is governed through a process of public hearings and meetings with accountability, transparency, and opportunities for public input. The addition of revenue caps on top of existing levy lids erodes local control. I think we need to be honest that the erosion of local control is what is being proposed and is there a reasonable level encroachment into the work of School Boards.

The Board of Education has access to exceed the base growth calculation with a seventy percent vote. The largest school districts in the state have the least amount of access to additional taxing authority under this provision. The work on the basic growth calculation through adding growth has helped with conversations within LPS. We stand ready to stay at the table and continue to make progress on the bill. I understand Sen. Briese describes the revenue cap scale as coming from the education community. I would ask the committee to take a hard look at the school district cap scale proposed in LB 589. The scale would currently give a school district of 400 students base growth plus seven percent and a school district with 40,000 students base growth plus four percent. Lincoln Public Schools did not give input on this scale and today is the first time I have heard it came from the education community. It is important to not place the most restrictive cap on the largest school districts representing 43% of the students in the state.

Flexibility in the cap is important because school districts need tools for long-range planning from year to year. In Lincoln, based on assessment practices, we navigate valley and climbs or dramatic changes in valuation. Traditionally, we have done that through cash flow management. For example, in school years 2019-2022 we held our budgets very flat, about ½ of one percent growth. We reduced approximately 100 FTE each year as we experienced a significant drop in revenue. It required cash flow management to plan for the 2022-2023 school year opening two new school and growing the budget six percent. Reflecting on the practices in Lancaster County, a local context only local boards know, school districts really focus on long-range, multi-year planning with a thoughtfulness in how to provide stability for students. LB 589 should not take away the ability to deal with extreme circumstances.

Staff represent eighty-eight percent of our budget. We are in a labor shortage and must invest in our staff. Revenue caps must be flexible to address inflation pressures for fixed costs and compensation to recruit and retain staff.