Office of Governor Jim Pillen
LINCOLN, NE – Governor Jim Pillen testified before the Nebraska Legislature’s Education Committee in favor of LB303 which aims to provide Nebraskans with additional property tax relief by altering the Tax Equity and Educational Opportunities Support Act (TEEOSA). Senator Jana Hughes introduced LB303 at the Governor’s request.
TEEOSA has been Nebraska’s school funding formula since 1990. Its primary function is to provide state equalization aid to those schools where the needs exceed budget resources. During his testimony, Gov. Pillen pointed out that since 2000, school district taxes have increased from $1 billion to over $3 billion, and in that same time frame, the number of equalized school districts has dropped significantly, from 226 to just 60.
“Nebraska’s students and taxpayers need stability in funding. School districts often live under uncertain budget circumstances. It is difficult to project the amount of dollars that will come from the TEEOSA formula as property tax valuations continue to rise across the state,” said Gov. Pillen. “Providing stability to the TEEOSA formula is necessary and will require constant review and consideration. We must start managing the formula and not allowing the formula to manage us.”
Among the proposed changes to TEEOSA in LB303:
- Dropping the maximum levy from $1.05 to $1.02
- Increasing the minimum amount of state aid for each public-school student (Foundation Aid) by 6%, from $1500 to $1590 per student
- Prohibiting school districts with a base levy adjustment of lower than $.30 from receiving state aid
- Creating a commission to review the TEEOSA formula every year and provide feedback to elected officials on potential improvements
Both Sen. Hughes and Gov. Pillen emphasized that ensuring local control among school districts was paramount to this legislation.
“During the current fiscal year, 111 schools have seen a decrease in state aid. Modeling from the Nebraska Department of Education shows that LB303 will provide just over $62 million more in state aid to schools,” said Sen. Hughes. “While this doesn’t fully compensate for the loss due to rising valuations, it will lessen the impact on property taxpayers next year. Without the increase in funds provided to schools through LB303, the entire loss in state aid to these districts will fall to taxpayers.”
Organizations testifying in favor of LB 303 included the Nebraska State Education Association (NSEA), Greater Nebraska Schools Association (GNSA), Educational Service Units (ESUs), Nebraska Association of School Boards (NASB), Nebraska Council of School Administrators (NCSA), Open Sky Policy Institute, Nebraska Rural Community Schools Association (NRCSA), Schools Taking Action for Nebraska Children's Education (STANCE), Nebraska Farmers Union and the Nebraska Farm Bureau, representing a working group of ag organizations.