Funding for PK-12 Education in the State of Nebraska

Agenda Funding for PK-12 Education – Sources, National Comparisons, Trends and History Revenue – Sources, Economic Impacts, Forecasting Processes and Legislative Actions Appropriations – Projecting the PK-12 State Aid, Calculating State Aid and the State Aid Formula Questions & Discussion

How are schools funded? 41% Local Revenues – property taxes 37% State Revenues – state aid 9% Federal Revenues – NCLB grants 6% County Revenues – fines, licenses 7% Other – ASP, reserves

How does this compare nationally? 46/51 20/51

What is the trend? content/uploads/2012/03/TEEOSA-Growth-Graph.jpg

What is Nebraska’s history? Restoring Funding to Education with Double Digit Increases Percent Change over Previous Year 1989/ / % 1991/9214.7% 1992/933.7% 1993/943.3% 1994/954.5% 1995/963.4% 1996/978.0% 1997/984.2% 1998/9926.9% 1999/000.5% 2000/01-5.5% 2001/0214.9% 2002/032.6% 2003/04-3.2% 2004/05-1.0% 2005/0610.5% 2006/072.5% 2007/087.0% 2008/099.2% 18 year average5.9% 2009/100.1% 2010/11-4.1% 2011/121.6% 2012/133.7% 4 year average0.3% Nebraska Department of Education

Why the recent drop? State of Nebraska FY and FY Biennial Budget

Funding for state aid comes from…

How does the economy impact? In and , state receipts were down 4- 5% each year. In response to the downturn in receipts, the Nebraska Legislature balanced the budget by cutting state aid by $410 million – 57% of the funds needed to balance the two-year budget encompassing the and school years. Receipts rebounded in to pre-2008 levels. Receipts for were 2.9% above forecast. Receipts thus far for are 3.1% above forecast. Nebraska is required to have a balanced budget and a two- year budget process will occur during the 2013 legislative session which will include the and school years. Budgeting is a process of projecting both revenues and expenditures.

Projecting PK-12 State Aid Tax Equity and Educational Opportunities Support Act (TEEOSA) is a series of state statutes resulting in a calculation of state aid to school districts. Fully Funding the Formula - The calculation is set in law unless the Nebraska Legislature changes the law to change the calculation. The Nebraska Legislature changed the law, to lower the calculation of funds necessary, with the following actions in recent years LB545 (2009), LB5 (2009), LB235 (2011). Legislative changes lowered the state aid calculation for , , , The May 2012 State of Nebraska Biennial Budget projected TEEOSA to increase 20.5% or $174,637,864 for the school year based on the expiration of laws enacted in LB235 (2011). The data to calculate state aid includes many variables. The most significant are Property Values certified August 20, 2012, Student Membership September 28, 2012, State Aid filings due Oct 15, 2012, the school district Annual Financial Reports filed November 1, The Nebraska Department of Education must certify an estimate of the necessary funding level pursuant to § by November 15 th.

PK-12 State Aid Formula State Aid Certification March 1, 2012 Formula Needs Basic Funding + Poverty Allowance + Limited English Proficiency Allowance + Instructional Time Allowance + Focus School & Program Allowance + Summer School Allowance + Transportation Allowance + Special Receipts Allowance + Elementary Site Allowance + Teacher Education Adjustment + Distance Ed. & Telecom. Allowance + Averaging Adjustment + Student Growth Adjustment + New School Adjustment -Limited English Proficiency Allowance Correction -Poverty Allowance Correction -Local Choice Adjustment -Negative Student Growth Adjustment Resources Property Tax Option Funding Income Tax Allocation Other Receipts Retirement Aid Aid

Legislative Discussion Topics Instructional Time Allowable Growth Local Choice Technology Needs SPED Early Childhood Education