State school aid may spark rural-urban struggle

Metro Omaha school districts want lawmakers to boost aid under a plan that would end the common property tax levy in the two-county Learning Community.

Rural lawmakers, meanwhile, are eyeing state aid as a way to relieve the property tax burden in communities hit hard by rising agricultural land values.

Both potential changes in state aid could be expensive, although neither has a cost estimate yet. A key question is whether senators will have the appetite — or enough money in state coffers — to satisfy both demands as they wrestle with other potentially costly issues, such as bulging prisons.

“That’s going to be one of the big debates we see play out on the floor,” Papillion-La Vista Schools Superintendent Andy Rikli said.

Another question is whether the proposed changes to the Learning Community will open the door for its critics, including a new governor, to dismantle it completely.

Nine of the 11 Learning Community school boards in Douglas and Sarpy Counties, including the Omaha Public Schools, have pitched a proposal to boost aid to Nebraska districts that educate students in poverty or whose primary language is not English. They haven’t specified exactly how much they’d like to see aid boosted.

But if districts get enough money, their board members say, lawmakers could dump the common property tax levy. The levy was implemented five years ago as part of a shared tax system aimed at helping property-poor districts in the metro area.

Rural lawmakers have their eye on state aid, too, as a means to ease rising property tax bills. Ag land valuations increased 29 percent from 2013 to 2014, following nearly 23 percent growth in the previous year.

Many rural school districts no longer qualify for state equalization aid because their property valuations are so high. The state aid formula gives more money to districts that can’t raise as much money locally through property taxes — and less state money to districts that can.

This year, 124 districts — nearly half of the state’s 249 total and more than double the number five years ago — got no state aid.

State aid this school year was $933 million. Early estimates indicate that would rise to nearly $962 million next fiscal year without any changes to the aid formula.

Rural lawmakers haven’t introduced any specific proposals for lowering property taxes, but those districts want “some of the pie,” said Sen. Jim Scheer of Norfolk.

“Somehow, we have to have some compromise,” Scheer said, “because we can’t expect rural people, simply because of valuations, to continue to write larger and larger (property tax) checks, and by doing that they’re freeing more and more money up for the larger districts.”

Some of those larger districts are in the Omaha-area Learning Community, and they have other pricey items on their wish list. Besides more aid for educating low-income and non-English-speaking students, the metro Omaha proposal also seeks transportation money for open enrollment transfer students, the restoration of funds that lawmakers took from educational service units and gave to the Learning Community, and a small property tax levy that the Learning Community would use to pay for evaluating its programs.

No lawmaker has stepped forward to introduce a bill reflecting the overall proposal, which the supporting districts view as a single package, said Gretna Public Schools Superintendent Kevin Riley, who is the liaison between Learning Community superintendents and its governing council.

Several Learning Community superintendents have expressed hope that State Sen. Kate Sullivan, who heads the Legislature’s Educational Committee, will introduce a bill, but a spokeswoman for Sullivan said she has not decided whether to do that.

Riley said he expects a bill, but putting the entire financial proposal into a bill is complicated. And Riley said the metro-area districts understand that once the proposal gets to the Legislature, anything can happen.

“Things can end up looking very different when it’s all said and done,” he said.

The history of the Learning Community is full of such surprises.

The Learning Community was created by the Legislature in 2007 in the aftermath of OPS’s bruising “one city, one school district” boundary fight. The new political subdivision was intended to unite school districts in the Omaha area behind an overarching goal: closing the achievement gap between poorer students and their middle-class peers.

Along the way, however, there were shock-and-awe moments. Sen. Ernie Chambers, for instance, stunned Omahans with a bill that briefly split the Omaha Public Schools into three districts.

When OPS board members this fall signed onto the proposal to swap the common levy for more aid, some observers believed the board had opened the proverbial Pandora’s box — clearing the way for a bill to reach the floor where opponents could kill off the Learning Community.

But OPS Superintendent Mark Evans says he doesn’t believe that OPS can stay on the sidelines while momentum builds to change or do away with the Learning Community.

“I don’t think it opens up a can of worms,” he said. “That can of worms already (has) been opened.”

Gov.-elect Pete Ricketts has said he would like to end the Learning Community and move in a different direction, though he has not proposed specific legislation. Ricketts’ support of charter schools and vouchers, both of which often aim to help low-income kids, has people wondering if those ideas will enter the debate.

Learning Community opponent Sen. Jim Smith of Papillion said he’s certain a bill will be introduced to kill the Learning Community.

For his part, Smith said he again plans to introduce legislation to end the common levy while preserving district boundaries and giving districts the right to negotiate directly on boundary changes.

Smith said he’s not confident that lawmakers will find agreement on all of the proposed changes. “I’ve long given up on believing we can get everyone in perfect alignment,” he said.

Smith also said he’s not in favor of tying elimination of the common levy to a boost in aid, which he sees as a separate issue.

Evans said that by signing onto the financial proposal, OPS gets to help shape the debate. He has said that OPS stands to gain more money from a boost in state aid than it’s likely to get from the common levy.

Omaha-area superintendents are hopeful that rural school districts will get behind their proposal because it would boost aid for poor and immigrant students across the state, not just in the Learning Community.

Sen. Jeremy Nordquist of Omaha, who represents many of the low-income South Omaha areas served by Learning Community programs, said he’s open to the metro districts’ proposal, but he isn’t ready to back it yet. He said he wants to make sure OPS will have the resources it needs.

Nordquist said that if Ricketts wants tax relief — a major point in his campaign — one of the quickest and easiest ways to achieve that is to pump more money into state school aid so districts don’t have to rely so much on property taxes.

Sen. Rick Kolowski of Omaha, a former principal at Millard West High School, said he believes senators should respect the work of the metro Omaha superintendents and give their ideas a fair shake. Lawmakers should heed what those professional educators told the Legislature in their October report, he said, just like they would listen to what doctors have to say about a medical issue.

Kolowski said lawmakers should focus on the future rather than the Learning Community’s original vision, emphasizing the entity’s strengths, which he said are its early childhood and elementary school programs. Those programs, which are funded through a property tax levy separate from the common levy, will provide models that school districts can replicate, he said.

But Scheer said the programs, even if effective, would be costly to implement at a scale sufficient to help all the poor kids in OPS.

Kolowski praised the newly forged cooperation of school districts, which was missing when the Learning Community’s board was first seated in 2009 and Kolowski served as council chairman.

The atmosphere in those meeting rooms was so cold “you could have hung beef in it,” Kolowski said.

Evans said lawmakers have been complimentary about all 11 school districts working together to figure out how to serve kids in the Omaha metro area, which accounts for about a third of the public school enrollment in Nebraska.

“I think they feel good about the reality that we’re not throwing rocks at one another,” he said. “That instead of throwing rocks we’re trying to figure out ‘How do we meet the needs of our young people the best way we can?’ ”

Despite that unity, some supporters of the common levy are still defending it.

The levy ties the 11 districts together, ensuring that OPS will not suffer a rotting property tax base that has afflicted other urban school districts like Detroit, OPS board member Marian Fey said.

“For me, it was always about equity and having something outside the state aid formula that was reliable and consistent,” Fey said.

Whatever takes place in the session, it will occur against a backdrop of rising poverty.

In 1997, when the state first started giving districts extra aid to educate poor kids, 42 percent of students in the Omaha Public Schools qualified for free lunches. Last school year, that was up to 64 percent.

Contact the writer: 402-444-1077, joe.dejka@owh.com