Nebraska

State Issues Affecting P–12 and/or Higher Education Funding

Both the legislature’s appropriation committee and Governor Heinemann emphasized a current priority for funding all levels of Nebraska public education. The recession and recent loss of federal funds have placed P–12 districts in fiscal distress. The current funding formula requires restructuring to provide state aid that is aligned with legislative and executive guidelines. Distress is augmented by friction between representatives of rural and urban school districts who agree that state aid should increase and be more inclusive.

A mandated "learning community," a collaboration of 11 districts in a two-county urban area that share a common levy and is governed by a coordinating council that has additional taxing authority, has varied levels of support among legislators.

Funding Priorities/Trends for P–12 and/or Higher Education

P–12 Education

In addition to re-evaluation of the funding formula, priorities include enhancement of early childhood programs and restructuring of retirement plans. Support for early childhood education has been gaining strength in Nebraska public schools since 2004. New legislation transfers funds from the Education Innovation Fund to multiple programs. Furthermore, the state faces a $2.2 billion unfunded liability in the school employee’s pension plan over the next 30 years. Discussions include new legislation and a study committee to address long-range remedies (Young 2013).

Higher Education

In addition to freezing tuition rates for students, priorities include increases in state aid and development of programs for adult learners.

Changes to Funding Formula for P–12 and/or Higher Education

P–12 Education

The Nebraska legislature made multiple changes to the P–12 funding formula. These changes include (a) a basic allowable growth rate of 1.5% for FY 2013–2014 and 2.5% thereafter, (b) a local effort rate of $1.03 for FY 2013–2014 and FY 2014–2015 and $1.00 thereafter, (c) an averaging adjustment for districts in excess of 900 formula students, (d) teacher education allowance of $30 million based on teacher education points, (e) $15 million paid as teacher education aid, (f) an instructional time allowance of $20 million linked to average days in session in excess of 175 multiplied by formula students, (g) $10 million paid as instructional time aid, and (h) 2% additional budget growth with 75% board approval, FY 2013–2014 only (Unicameral 2013).

Higher Education

Higher education in Nebraska has no formal funding formula. Two of the four universities in the Nebraska university system have local faculty negotiation systems in place while the other two have faculty senate advisory compensation committees that provide some input into issues related to salary and benefits. No changes are noted.

Impact on School District or Higher Education Budgets

P–12 Education

Of 239 school districts, 113 (47%) received no equalization aid as calculated by the procedures in the funding formula (Nebraska Department of Education 2013).

The overall net change from FY 2012–2013 in equalization aid is an increase of $62.6 million (7.4%) in FY 2013–2014 followed by a $26.0 million (2.8%) increase in FY 2014–2015 (Nebraska 103rd Legislature 2013, 28).

The Learning Community Coordinating Council’s two-cent levy authority for elementary learning center expenses was reduced to one half cent (LB 585). Its one-cent levy, dedicated to pilot projects and elementary learning center contracts, is increased by one-half cent to fund early childhood education programs for children in poverty. This will result in a net decrease of one cent in levy authority (Nebraska Legislature 2013).

Early childhood education programs will benefit from scheduled distributions of $1.75 million in FY 2013–2014, $1.85 million in FY 2014–2015, and $1.95 million in FY 2015–2016. An additional $1 million will be directed to the Early Childhood Endowment Cash Fund annually for the next three fiscal years to be directed to grants to public districts serving at-risk children from birth to age three (Nebraska Legislature 2013).

Higher Education

In FY 2013–2014, $565.5 million is appropriated to universities and colleges (4.1% increase over prior year) and $588 million in FY...