School Aid Increase Put on Hold in Legislature

Feb. 11, 2022, 6 p.m. ·

Senator Lynne Walz, center, talks to Senator Wendy DeBoer, right, Friday in the Legislature (Photo by Fred Knapp, Nebraska Public Media News)
Sen. Lynne Walz, center, talks to Sen. Wendy DeBoer, right, Friday in the Legislature (Photo by Fred Knapp, Nebraska Public Media News)

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A proposed massive increase in state school aid intended to lower property taxes was put on hold Friday in the Legislature, amid objections from rural senators that it favored larger city schools.

Sen. Lynne Walz, lead sponsor of the school aid bill, said she woke up early Friday morning thinking about it. Walz wanted to redirect $546 million now being given to property tax payers as an income tax credit to help fund her plan to increase school aid. She referred to that income tax credit program by the number of the bill that created it two years ago, LB1107.

“I actually started laughing about 4:30 this morning because I couldn’t believe how absurd, how absurd it is to just throw half a billion dollars over a cliff. And that’s what you’re doing when you can’t even sit down and talk about repurposing 1107. You’re just throwing it over a cliff,” Walz said.

Sen. Tom Briese, one of the senators who helped negotiate LB1107, said ending the income tax credit was a nonstarter for him.

“For someone to suggest that it’s bad policy, that it’s absurd – things of that sort – I don’t think those taxpayers that are getting 25 percent of their school property taxes back would agree with that. We’re giving taxpayer dollars back to taxpayers and I’m very reluctant to ever call that absurd or bad policy,” Briese said.

Sen. Julie Slama complained the way state aid is distributed to schools is unfair to rural areas.

“In this state, we say that we value kids if they’re sitting in an urban classroom, like in Papillion, in Omaha, in Lincoln, we value them more than that kid sitting in Keya Paha County, that kid sitting in Cherry County, that kid sitting in Pawnee County. We tell that kid ‘Eh. Somebody else can handle the bill,’” Slama said.

Walz said her proposal would have headed the state in the right direction and she wants every student to get a quality education.

“It doesn’t matter if they live in Bridgeport, or Hay Springs, or Grand Island, or Columbus, or Fremont, or Omaha. This was a bill that did address and provide funding for every single student across the state,” she said.

In its second year, the bill would have provided $1,100 per student to every school district. But Sen. Curt Friesen said that was far too little for rural schools.

“If you care about education, if you care about rural kids at all, where’s the funding? To give a small school like that with eight kids per class, give ‘em a thousand dollars per student? That’s a slap in the face. Their costs are $28,000 a kid because they’re in rural areas. They can’t have any more kids in the classroom. They’ve consolidated. They’re driving 50 miles one way to get to their school,” Friesen said.

With debate dragging on with little prospect the bill would advance, Speaker Mike Hilgers said he would take the bill off the agenda, and not put it back on unless supporters and opponents agreed on a compromise. Sen. Lou Ann Linehan, who opposed Walz’ bill because it didn’t cap school property tax increases, acknowledged the issues the bill was trying to address aren’t going away.

“This is not to say we don’t have a issue. It’s not to say we don’t have to keep on working on it. But again, it’s got to be the whole thing. You can’t put the money out with no guardrails and think your property taxes are going to stay low,” Linehan said.

For now, senators are moving off school finance and property taxes, with debate on reducing the state’s income taxes scheduled for next week.