LB303: A New Approach to School Funding in Nebraska

LB303: A New Approach to School Funding in Nebraska

Funding for Nebraska’s public schools is a top priority for lawmakers this legislative session, as they seek to address concerns about property tax burdens and the state’s role in education financing. With over 200 school districts relying on a complex funding formula, Governor Jim Pillen and Senator Jana Hughes have introduced LB303, a bill designed to gradually shift more of the financial responsibility from local property taxpayers to state resources.

Understanding TEEOSA and the Need for Change

The Tax Equity and Educational Opportunities Support Act (TEEOSA) is Nebraska’s formula for funding K-12 schools, but critics argue it has been on “auto steer” for decades. The basic principle of TEEOSA calculates state aid as the difference between the cost of educating students and the resources a district already has, such as property taxes. However, as property values rise, state contributions have declined, increasing the tax burden on local homeowners.

“The citizens of Nebraska made it crystal clear that we need to find a better balance of state and local funding for our school districts,” said Governor Pillen.

What LB303 Proposes

LB303 aims to address these concerns incrementally by injecting $120 million in additional state funding into school districts over the next two years. This includes a 6% increase in foundation aid to help stabilize school funding. The bill also proposes creating a 15-member School Finance Reform Commission to explore long-term solutions for sustainable education funding.

Senator Hughes emphasized the importance of this step: “I thank Governor Pillen for his willingness to work with me to start pulling some of the controls within TEEOSA to steer us on a new course.”

Support and Opposition

The bill has received widespread support from education leaders. Tim Royers, president of the Nebraska State Education Association, called LB303 “the best school funding bill to come from the governor’s office in at least a decade.”

For districts like Lincoln Public Schools (LPS), which have faced declining state aid, this proposal offers hope. “We see the valuation going up and we want the tax bill to stay the same,” said Liz Standish, LPS Associate Superintendent of Business Affairs. “That’s not physically possible under the current state formula.”

However, not all districts are on board. A representative from Omaha Public Schools (OPS) voiced concerns that the proposed changes might create new financial challenges. OPS has advocated for maintaining current property tax limits and foundation aid levels, warning that adjustments could disproportionately affect urban districts.

What This Means for Nebraska Residents

If passed, LB303 could provide relief for property owners while ensuring schools receive consistent funding to maintain quality education. The establishment of the School Finance Reform Commission signals a broader effort to address the structural issues within TEEOSA and develop a more equitable long-term funding strategy.

LB303 represents an important step toward balancing Nebraska’s education funding system, but its long-term impact will depend on how lawmakers implement reforms. As the bill moves forward, Nebraska residents should stay informed, engage with policymakers, and advocate for solutions that best serve students, teachers, and taxpayers alike.