It's Official, LB235 Calls for Huge Cuts in State Aid to Nebraska School Districts
The Loup City School District is losing over 90% of its state aid from 2010-11 to 2011-12 based upon the passage of LB235 by the Nebraska legislature. The new state aid law will fund state aid to education at a level of $822 million. State aid to schools this year totals $950 million. LCPS received $500,296.69 in aid for 2010-11 and is projected to receive $32,750 dollars in 2011-12.
The funding model published by the Nebraska Department of Education office includes specifics for Loup City and other schools across the state and is available at http://www.education.ne.gov/FOS/SchoolFinance/Downloads/LB235Model_Comparison.pdf
The district with input and support from the staff, students, and district patrons are working to ensure our budget will be able to withstand the cuts dealt to us and we will continue to provide top quality educational services to our students. No instructional programs or staff positions have been eliminated. However, there is no way to sugarcoat the loss in aid or to describe its impact as negligible. The cuts are more acutely painful because LCPS is one of the most efficiently managed districts in the state in terms of low general-fund levy and healthy cash reserve. Those practices of sound fiscal management now seem to be working against the district as state aid is calculated under the new formula.
Several measures are already in place to cover help lessen the impact of the loss of nearly $400,000 in state aid. Our staff has been very judicious in the use of district resources by doing such things as making fewer copies, conserving electricity, combining class field trips, and curtailing professional development activities. Currently we have reduced year-to-date spending over $60,000 compared to this time in 2009-10. Funds not spent from this year's budget will be carried over to the 2012-13 budget to help lessen the impact of our loss in state aid.
Operational efficiency measures have been instituted , but are not sufficient to make up drastic shortfalls since over 85% of district costs are directly attributable to personnel costs in salary, wages, and benefits.
The dilemma of dealing with cuts while contemplating increased property tax burdens will be before the Board when officially adopting the district budget in September of 2011 for the 11-12 year. Total district property valuation has increased by at least 5% over the last five years and over 7% on average the last three years.
The local general fund property tax levy currently sits at .96 and the last assessment from the County Treasurers had Loup City with $278 million in valuation. The general fund property tax can be set within a range from .95 to 1.05. The cut in state aid is so substantial that only by raising the general fund levy above $1.04 would lost state aid revenue be recouped. Our forecasting models for next year are based on a historical valuation increase of 5%, which would generate an additional $130,000 in general fund revenue at the current tax levy.
While the state aid cuts are now set in stone-official certification of state aid is scheduled for July- the work preparing for the shortfall is being accomplished through the strong collective efforts of the Board of Education, the leadership of administration and the input of the Loup City Education Association and of district patrons. The Loup City district has held community forums and Special Board meetings to gather input on the reduction process. The Board feels that collectively, they and administration have been left to do the difficult, disappointing work at the local level of enacting cuts handed down at state level.
Long-term prospects for the district remain excellent fueled by growing enrollment in the elementary grades healthy farm economy and well maintained cash reserves. However, the immediate future will continue to challenge us to be creative in how we use resources. The current provisions passed in LB235 stipulate levels of aid funding for 2012-13 that will basically flatline school budgets for the biennium of 11-12 and 12-13. The allowable growth restrictions in the new law mean the district will have to continue to incorporate efficiency measures in order to manage other costs that will be projected to increase for 12-13, such as food, fuel, utilities, and insurance premiums.
We have labeled our budget initiatives, “Doing More with Less.” The passage of LB235 will insure that doing more with less is now the new normal for schools.
(Thanks to Mr. John Skretta, Supt. Of the Norris School District for his consultation on this article-used by permission)
