Debate Transcripts

LB 1134 (1998)

Select File

March 10, 1998


PRESIDENT ROBAK:  Is there any discussion?  Seeing none.  The question before you is the advancement of LB 1041A.  All those in favor say aye.  All those opposed nay.  LB 1041A advances.  LB 1134.


CLERK:  (LB) 1134.  Senator, I have Enrollment and Review amendments, first of all.


PRESIDENT ROBAK:  Senator Bruning.


SENATOR BRUNING:  Madam President, I move we adopt the E&R amendments for LB 1134.  PRESIDENT ROBAK:  Is there any discussion?  Seeing none.  The question before you is the adoption of the E & R amendments to LB 1134.  All those in favor say aye.  All those opposed nay.




The E & R amendments are adopted.


CLERK:  Senator Janssen would move to amend the bill.  (AM3229 appears on page 986 of the Legislative Journal.)


PRESIDENT ROBAK:  The Chair recognizes Senator Janssen to open on his amendment.  Try again, Senator.


SENATOR JANSSEN:  Thank you, Madam President, members ox the body.  We got it?




SENATOR JANSSEN:  Okay.  AM3229 would simply place back into the bill the provisions allowing the 100 percent hold-harmless during the first year that schools are reorganized.  This change would promise school districts that during that first.  fiscal year after reorganization that the reorganized district cannot receive less in state aid than was received by all of the districts during the year before the reorganization.  The payments will be made from the $2 million that's already been set aside in this bill for the payment of the base fiscal year incentives.  Therefore, the amendment would not increase the cost- or change the funding scheme currently in the bill.  I believe it is important to give these districts this protection and ability to plan.  It is difficult for many of these districts to convince their patrons that reorganization is the best thing for their schools.  We need to let these districts know that they will not suffer a loss in state aid at the same time they are going through these changes.  This change gives them the ability to plan more effectively and educate their patrons as to what will happen during and after the reorganization.  No one is suggesting that this loss in state aid is due to the reorganization.  Rather, this amendment is necessary as a planning tool and as an extra incentive for these districts that are considering reorganization.  This body has been encouraging districts to reorganize and become more efficient for years.  Now we must give these districts the incentives and those tools that they need to make this reorganization happen.  I would appreciate your support to this amendment, which I believe only improves this bill.  Thank you very much, and I will answer any questions anyone has.




PRESIDENT ROBAK:  Thank you, Senator Janssen.  Senator Beutler.


SENATOR BEUTLER:  Senator Janssen, let me explore a little bit, if I could.  I haven't seen this amendment before.  Was this amendment in bill form at any time?


PRESIDENT ROBAK:  Senator Janssen.


SENATOR JANSSEN:  Yes, it was part of the original bill, Senator Beutler.


SENATOR BEUTLER:  It was part of the original bill eliminated by the Education Committee?


SENATOR JANSSEN:  That's exactly correct.


SENATOR BEUTLER:  Okay.  So if I'm understanding this amendment correctly, it's departing from the whole theory of state aid in the sense that state aid ...  the sales and income tax money of everybody in the state is designed to go to those schools that need the money.  That is, those schools that have high per pupil costs, for example, tend to get less money out of the state aid program.  Correct?


SENATOR JANSSEN:  That's correct.


SENATOR BEUTLER:  And so the Education Committee, with regard to mergers and consolidation, has made provisions and set aside several million dollars to assist people in mergers and consolidations, under the other portions of your bill.




SENATOR BEUTLER:  Is that correct?


SENATOR JANSSEN:  That's correct.


SENATOR BEUTLER:  And now you're saying that, in addition to that and notwithstanding what this body has decided is the right theory in terms of (LB) 806, that they should get additional money for how many years?




SENATOR JANSSEN:  For one year.


SENATOR BEUTLER:  For one year.


SENATOR JANSSEN:  The base year.


SENATOR BEUTLER:  Okay.  So for the base year, their state aid could not decline?


SENATOR JANSSEN:  That's correct.


SENATOR BEUTLER:  Okay.  And that money, would that come out of the incentive fund or would that come out of the entire state ...  the rest of the state aid formula?


SENATOR JANSSEN:  No.  It would only...  it would come out of this base year, right now, that we move the $2 million over to the reorganization fund.  It would come out of that $2 million.  I might add that if the incentive money takes all of that $2 million and there is ...  that would come first.  If there is any money left, then it would go to the hold-harmless.  Only if there is money left out of that $2 million.  If there isn't ...  the incentive money comes first.




SENATOR JANSSEN:  That would be the safeguard for the incentive money while the district ...  we have no idea how many districts this would involve.  Vie have no idea how many would be...would lose state aid.  We have no idea how many would gain state aid.


SENATOR BEUTLER:  So you have no idea what the fiscal impact of this might be, for example?


SENATOR JANSSEN:  No, I know that it wouldn't be over the $2 million.


SENATOR BEUTLER:  Because you've...


SENATOR JANSSEN:  It couldn't be because...




SENATOR BEUTLER:  ...  retained the $2 million cap.


SENATOR JANSSEN:  That $2 million is for incentive money.  If there is any left, then you can go the hold-harmless.  if there....say there is ten schools and they each...  and there's $100,000 left, then it would be prorated amongst those schools.  So they wouldn't get the complete hold-harmless that they did the year before.  It would be prorated amongst the schools, that first year, that are reorganizing.


SENATOR BEUTLER:  Okay.  And would that remain for schools in future years, or is this for this next year only?


SENATOR JANSSEN:  Yeah, I'm sure it would be for just that first year of the....


SENATOR BEUTLER:  Okay.  With regard to the schools that are applying this next year, I understand that....


SENATOR JANSSEN:  All right.  It would apply to the schools that are receiving incentives on that first base year.


SENATOR BEUTLER:  Okay.  And this ability to receive that payment would continue...


SENATOR JANSSEN:  For the next three years because that's all the longer the...


SENATOR BEUTLER:  For the next three years?




SENATOR BEUTLER:  So it's the ability to use the remaining funds and the incentive funds for the next three years for that purpose?


SENATOR JANSSEN:  For those that are...




SENATOR JANSSEN: their first year, on that base year, those schools that decide to reorganize, that is all the group




together ...  the new reorganized district would receive ...  would be held harmless that first year.  First year only.  Not second and third year.  First year only.


SENATOR BEUTLER:  Okay.  I'll put my light on again, Senator, but I appreciate the explanation.  I understand what you're doing a lot better.


SENATOR JANSSEN:  Okay.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Bohlke.


SENATOR BOHLKE:  Yes, Madam President and members.  Senator Janssen and I have had this discussion, and I know that he has to try and do what he can do for his district, but let me put it in another perspective for you.  What happens with the reorganization of this district is that they had an increase in valuation, because when they have an increase of valuation, they're getting more money off of property tax.  When they have an increase of valuation, they're going to get less state aid.  That's how the formula works.  If you get more money off of property tax, you don't need as much money in state aid.  What this would do would hold them harmless because they were going to get less in state aid because they were getting more money from their property tax.  And so we are traveling down a road that I think has a real philosophical bump in it, but I recognize that Senator Janssen's district certainly feels that, you know, this is what they would like.  But I would think just about any district that we've been hearing from would like to be held harmless from losing state aid because ...  but where I have a problem is, if they're losing state aid because they've had an increase of valuation and they're going to get more money off the property.  State aid was never meant to have it both ways, and, you know, it just wasn't meant to do that.  It is meant to look at what are the resources in a district and what are the needs.  And then when the needs are greater than the resources, then we bring in state aid.  Just because the resources are increased off of local property tax, it doesn't mean that we hold them harmless.  And I think that's where the problem lies.  Senator Janssen also in his bill had asked for double incentives because it was a Class VI and Class Is coming together, and we had teachers who were underpaid coming into the system and that




would bring an added burden to that new organization, that new Class III.  And the committee also said "no", we do not think that money should go to make up for decisions made by those Class I school districts on how they pay their teachers.  That is going to be a new cost to the district, but we don't think that state aid should be recognized to make up that difference and give them the double incentives.  So there were two parts, really, in the bill that Senator Janssen brought before the committee.  The committee agreed very much with Senator Janssen's position on the money coming that first year.  The only difference that the committee said was it did not make sense to us that we hold a district harmless for the reason that they're going to have more money coming in off of property tax.  And I think that other members from the Education Committee also have their light on to further explain the discussion in the committee and our opposition to this amendment.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Bohlke.  Senator Wickersham followed by Senators Schimek, Bromm, and Janssen.


SENATOR WICKERSHAM:  Thank you, Madam President.  I think the discussion has started along the lines that it needs to be.  I've...  and there are two different issues here, and I hope that we're able to keep them separately identified.  One, if a district is somehow penalized because they are reorganizing.  That's one issue.  The second issue is whether or not they, just because they reorganize, should get some special treatment that other districts similarly situated would not.  Now, I have been, over the years, a proponent of changing the system BO that you didn't penalize school districts for reorganizing.  I didn't see how that was consistent with the rest of our policy that, in many instances, encouraged school districts to reorganize and to consolidate.  You can't penalize them and at the same time tell them it's something they ought to do.  We have had several bills in the Legislature that address that particular issue.  Now, I don't think that's what's happening with Senator :anssen's amendment, because as Senator Bohlke was starting to indicate, what Senator Janssen's amendment would do is hold the district harmless not only for the effects of reorganization, if any, but also hold the d13trict harmless for any change in the factors that would otherwise be used to calculate their state aid.  Senator Bohlke identified the valuation of the district as one




of those factors, but there are others.  A change in enrollment could dramatically affect their state aid.  Costs in the grouping that they're associated with could change their state aid.  The number of poverty students in their schools could affect their state aid.  As I understand Senator Janssen's amendment, it seeks to hold them harmless from all of those changes.  Those changes have nothing to do with the reorganization of the district, and I don't believe that any school district should be held harmless from those kinds of underlying changes just because they've reorganized.  if something in the reorganization in itself, in and of itself, would cause them to suffer some penalty under our state aid formula, I will be more than happy to address that.  And if Senator Janssen can somehow convince me that he's not holding them harmless just from changes in the factors, but is somehow holding them harmless from changes due solely to the reorganization, then I might have a different viewpoint on his amendment.  But unless someone, Senator Janssen or others, can explain to me that this proposal does not hold the districts harmless from changes in valuation, from changes In enrollment, from changes in poverty students, from changes in the cost group, the costs and the cost grouping, from changes in limited English proficiency students and the other factors that determine how they're going to receive state aid, I will oppose the amendment.


PRESIDENT ROBAK:  Thank you, Senator Wickersham.  Senator Schimek.


SENATOR SCHIMEK:  Yes, thank you, Madam President, members of the body.  Actually, Senator Wickersham touched on some of the things that I wanted to ask Senator Janssen about.  And Senator Janssen, if I'm understanding this discussion, this ...  at least according to the discussion I heard from Senator Wickersham, this bill would hold-harmless no matter what the change in the factors that actually determine state aid?  And if you would answer that...  I mean, did you hear Senator Wickersham's discussion and could you respond a little bit to that?


PRESIDENT ROBAK:  Senator Janssen.


SENATOR JANSSEN:  Thank you, Senator Schimek.  Yes, I will.  I




wasn't listening to what Senator Wickersham said, but I can imagine what it was because I know his philosophy on this.


SENATOR SCHIMEK:  I think what he wanted to know is, does this holdharmless if other factors change in a district, if there is a difference in the number of students, if there's a difference in the poverty level, if there's a difference in English as a second language, all those kinds of factors that determine state aid?


SENATOR JANSSEN:  Yes.  And in one of the schools that I represent, what happened was their valuation went up.  But when they figured the adjusted valuation, they figured that up to 100 percent.  So what they'll actually get may not be exactly correct.  It could be back down.  That doesn't necessarily mean that that's what they're going to get, so they base those figures on that adjusted valuation.


SENATOR SCHIMEK:  Okay.  But your answer to the question is it 11 ?  yes




SENATOR SCHIMEK:  If...  this would be additional ...  this would be hold-harmless regardless of other factors that change in the state aid formula?


SENATOR JANSSEN:  For that first year.


SENATOR SCHIMEK:  For that first year.




SENATOR SCHIMEK:  In addition, what other kinds of things are we doing for these school districts?  Refresh my memory just a little bit.


SENATOR JANSSEN:  All right.  There are incentives that are set aside for these districts when they reorganize.  That comes out of the one percent of the state aid money that's set aside for school districts.  That's set aside for reorganization.  This first year, it's a little difficult process, but we put




$2 million in there for this upcoming year.


SENATOR SCHIMEK:  And can school districts use that money however they wish...


SENATOR JANSSEN:  When they're the...


SENATOR SCHIMEK:  ...  as an incentive?


SENATOR JANSSEN:  ...  reorganized districts?  Yes, they can.  I mean, there are extra...  a lot of extra added costs and planning that have went into this ...  into the merger.  The district that I've speaking about have been in this process for almost three years.


SENATOR SCHIMEK:  Okay.  Arid do we do anything about teachers when we have a reorganization like this?


SENATOR JANSSEN:  Those teachers go onto the scale- he pay scale that the highest district is.  So which is usually Ay the Class III ...  if they're Class Is coming into that, the Class IIIs are usually higher paid.  They go to the highest pay cale...




SENATOR JANSSEN:  ...  in the merged district.




SENATOR JANSSEN:  So, yes, they are helping those teachers.


SENATOR SCHIMEK:  Okay.  Thank you, Senator Janssen, I think you've answered my question.  And I guess the point of my question was that we already are doing quite a bit for these districts that reorganize, and I'm not certain that this amendment should take into account other factors that have nothing to do with reorganization and reward...




SENATOR SCHIMEK:  ...  school districts because of those factors.  But I will listen to the discussion.  Thank you very much,




Senator Janssen.


PRESIDENT ROBAK:  Thank you, Senator Schimek.  Senator Bromm.


SENATOR BROMM:  Thank you, Madam President.  I would like to ask Senator Bohlke or someone from the Education Committee a couple of questions.


PRESIDENT ROBAK:  Senator Bohlke, will you yield to a question?




SENATOR BROMM:  Senator Bohlke, the incentive payments that are allowable before Senator Janssen's amendment are based generally on what?


SENATOR BOHLKE:  It's moving the number of students from one cost grouping to another; from the old tier structure, really.


SENATOR BROMM:  It's kind...


SENATOR BOHLKE:  And as you move them, if you remember, for moving down into a more cost efficient tier.


SENATOR BROMM:  We retain...


SENATOR BOHLKE:  That then you got per student.


SENATOR BROMM:  We retain those tiers for purposes of calculating the incentive payments, then?




SENATOR BROMM:  Okay.  Okay.  You know...  thank you, Senator Bohlke.  The ...  I can see the change made by the committee for removing the double incentive.  I can certainly understand that and I think it's really helpful to move that incentive payment up to the year, the first year, that the reorganization occurs.  Now, we've allotted $2 million maximum to this reorganizational incentive fund, let's call it.  I guess it's assistance fund is what it's called.  Two million is it.  There is no more.  That is the amount that we are willing to put forward to give schools




some carrot, if you will, to consider reorganization.  And I think we're going to see a lot of progress in that area if we continue to provide carrots.  Senator Janssen's proposal is really pretty modest when you stop and think about it.  We're only saying if there's any of that $2 million left after the incentive payments are made that Senator Bohlke has described, that then to the extent there's any of that 2 million left that that would be used to help hold-harmless the loss of state aid in the first year only of the reorganized school district.  Now, when you're out there and you're trying to sell two or three or five or six districts on a reorganization concept, if they find out or realize or calculate that they're actually going to pay more taxes immediately from that reorganization, I can tell you as a practical matter the odds of getting that reorganization through, which has long-term effects on our financial aid situation in the state, is slim.  Very slim.  What Senator Janssen's proposal simply does is to try to sweeten that carrot a little bit, if there is any extra ...  if there is any money left in that 2 million.  That 2 million is one percent of the funding set aside for this purpose.  If there's any of that one percent left, then he says, let these schools for the first year to defray their extra costs at least not have a decrease in state aid.  Now the second year, they're on their own and forever after that they're on their own.  It's not a major proposal.  It is a modest,...




SENATOR BROMM:  ...common sense suggestion to help schools pass a reorganization proposal.  That's just what it is.  And so I realize the philosophy involved and the fact that you wouldn't want to do this on a long-term basis, you wouldn't want to take money...  you wouldn't want to take new money over and above the one percent or $2 million.  I realize that.  And Senator Wickersham is right, Senator Bohlke is right, Senator Schimek is right, Senator Beutler is right, in that respect.  This is not a change of philosophy or a long-term proposition.  It is a short-term sweetening of the carrot to try to accomplish the objectives that many feel are admirable, and that is substantial reorganization in some of our smaller districts.  So I rise to support the Janssen amendment.






SENATOR BROMM:  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Bromm.  Senator Janssen.


SENATOR JANSSEN:  Thank you, Madam Lieutenant Governor and members of the Legislature.  Senator Schimek asked, you know, is this something new?  No, it isn't.  (LB) 806, last year, took out the hold-harmless provision.  The way it was before, these districts were guaranteed that they would not be held harmless, no matter what.  So then with the passage of (LB) 806, by bill...  I supported (LB) 806.  This was ...  this came in as an amendment late on (LB) 806.  So in the meantime, as I said before, these districts are reorganizing.  Some districts have been at this process for three years.  It takes a long time.  Senator Bromm was exactly correct.  If they know that their taxes are going to go up, they're not going to buy this, and that's exactly what would happen those first two or three years until they level off and start to enjoy some of the benefits that comes from reorganization, which we all say needs to be.  So in the meantime, as they're planning this, here they're always expecting to he held harmless.  Well, that changed.  What I'm trying to do is put that back in a modest form, really, because we actually do not know how many dollars are going to be left in the $2 million for the hold-harmless.  That's why I said if there are a lot of schools, and I hope there are...  I hope there are a lot of schools that are reorganizing.  I think it's the best situation we could have.  So if a lot of schools do accept this, do take hold of the reorganization process, do get the incentive money, maybe there won't be enough dollars left to amount to anything to hold it...  to hold-harmless.  The $2 million is all there's ever going to be in this reorganization pot, even though we hold back one percent every year.  Two million dollars is it.  If it's used up in reorganization and incentive payments, sorry, Charlie, you don't get any.  So that's not going to be an extra cost.  Yes, it does go against what we've always talked about, but would you like to still have 700 schools out there?  We don't want that to happen either.  We don't want all these school districts.  We're reorganizing.  We told them to do this.  It's the right thing to do.  So I think, even though it does go against the philosophy




of what we've ...  not all of us probably, but what we've stated in (LB) 806, that if you have the resources you shouldn't get any state aid, that may be true.  But also if you go back against what we've been telling them and say, well, no, we're not going to give you any hold-harmless.  I'm sorry, you valuation is too high.  Well, it might be.  It's 100 percent adjust on 100 percent.  They don't know how that's going to be.  It could be a lot less than that.  So this first year, I'm asking for the first year to be held harmless whatever funds are available after the reorganization incentives are put out.  It's as simple as that.  I don't believe it's going to be an extra added cost to anyone.  Actually, it's going to help in the long run.  So with that, I'd give the rest of my time back to the Chair.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Janssen.  Senator Bohlke.


SENATOR BOHLKE:  Yes, Madam Speaker and members, this has gotten a bit complicated, but I think we need to bring it back and focus on the issue of the factors that are there and what that means to other schools.  So in this scenario, we would be recognizing holding harmless those factors because they're reorganizing.  How about Sandy Creek this year, that is down 50 students and lost significant state aid?  Should we not hold them harmless?  They wouldn't ...  there's no way for them to access any state aid or being held harmless.  And so now we're holding harmless school districts because they're reorganized when we look at factors that may happen to other schools who aren't in a reorganization.  And so, how is that fair?  How is that fair for a Sandy Creek?  How is that fair for a Superior?  How is that fair for...I could go on down the list...  a number of schools who have either lost state aid because of an increase in valuation, because of the decrease in the number of students, or because of correction in payment from the year before.  I think it has implications.  I would think that they could make that argument, that it's very unfair looking at what their particular situations would be.  So if we start to holdharmless every school district for factors that traditionally have been used to measure what state aid they may or may not receive, I think it has broader implications than just -this situation we're dealing with here.  And as I said, I don't blame Senator Janssen trying to get this done for his district, but it's the job of the




Education Committee to look at the broader picture and the implications that this could have in other areas.  And that's what makes it difficult.  And so I think that's what everyone here has to realize, that we're making a very philosophical decision and one that the Education Committee did not agree with and saw the problems and the implications that it could have overall.  And I'll give any of my remainder time to Senator Wickersham, who I think had some questions on if we were creating a two tier system.


PRESIDENT ROBAK:  Senator Wickersham, there are three minutes remaining.


SENATOR BOHLKE:  Or whatever he....


SENATOR WICKERSHAM:  Thank you, Madam President.  It's always ,good to be given a topic that you're resolved and you don't have anything to say, and three minutes in which to say it.  But I want to, again, address what I see as the underlying philosophical or policy question, and that is whether or not a school should be held harmless for changes that occurred in tile school district that are unassociated with reorganization.  And that is the problem ...  the problematical point for me.  And I can't get past the idea that, if nothing has changed except the reorganization, and if the reorganization affects your state aid, fine.  We need to find a way to adjust that, mitigate those impacts, but if you're going to be held harmless just because your valuation changed, your students changed, other factors changed, then I don't think, to be consistent, we can hold you harmless for those kind of changes.  Simply not consistent as a matter...




SENATOR WICKERSHAM:  ...  of policy.  It doesn't work within the formula.  And I do understand what Senator Janssen is saying, that this doesn't impinge on the incentive payments the schools would receive for reorganization, and you can kind of disregard it if you listen to those arguments.  This is a small amount of money; isn't going to be used very often, those kind of arguments.  But the philosophical arguments, I think, are very important and deserve your full consideration and evaluation.




And as a philosophical matter, I just simply don't agree with the position that Senator Janssen is presenting to you.


PRESIDENT ROBAK:  Thank you, Senator Wickersham.  Senator Jones.


SENATOR JONES:  Madam President and members of the body, as I listen to this, I think that the main thing that we're trying to help here is the people that's trying to reorganize, and I just wondered if I could ask Senator Janssen a couple of questions on that?


PRESIDENT ROBAK:  Senator Janssen, will you yield to a question?




SENATOR JONES:  Yes, Senator Janssen, this here applies to anybody that want to reorganize, whether it's this year or next year or next year?  There's three years they can do it?


SENATOR JANSSEN:  There's a three-year per.-Lod in there, Senator Jones.


SENATOR JONES:  Three-year period.




SENATOR JONES:  But you only get held harmless for one year, and that's the first year.


SENATOR JANSSEN:  That's the first year.


SENATOR JONES:  From the talk here that we've been hearing, everybody kind of agrees that it's a good idea for reorganization without the student loss and the valuation increase.  Would you be willing to change your amendment just to pinpoint on that reorganization part of it?


SENA70R JANSSEN:  Run that by me again, Senator Jones.  Now if you...


SENATOR JONES:  Well, yours covers more than just reorganization, valuation increase, children loss, and




everything when they reorganize.


SENATOR JANSSEN:  Well, that's the way the incentives are adjusted, by those factors.  The students that are moving from one tier to another.


SENATOR JONES:  Right.  Okay.  If they would change your amendment and just deal with just the reorganization and not take into consideration the other factors, could you do something like that?


SENATOR JANSSEN:  Well, I don't think BO, Senator Jones, because you would have to ...  you'll have to have some type of formula with...  if the reorganization ...  all depending on how many students are moving back and forth.  I ...  the whole formula would have to be ...  you'd have to go back to square one again.


SENATOR JONES:  I see, yes.  Well, anyway, I was trying to figure out some way to accommodate what they was talking about.  Senator Wickersham made the comment, well, if we was just dealing with the reorganization and not the other factors involved, it might work.


SENATOR JANSSEN:  Well, I believe what he was talking about would have been the rise in your valuation...




SENATOR JANSSEN:  ...  would decrease your state aid, because if your ability was there, you would ...  you don't need the need of money for state aid.




SENATOR JANSSEN:  And that is the argument.  I mean if, because their resources are higher, they are going to get less state aid.




SENATOR JANSSEN:  I maintain, even though their resources, as adjusted, are this high that they should be held harmless that




first year, because prior to last year that was the way it was.


SENATOR JONES:  Yes, if two districts reorganize and put it together, they would naturally have more valuation under one district than they would separate.


SENATOR JANSSEN:  Well, all depends on how many children or how many students are involved in that also.


SENATOR JONES:  Yes.  Okay.  Thank you.




SENATOR JONES:  Anyway, I was trying to make a...  see how it would work.  And so with that I would yield the rest Of My time back to the Chair.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Stuhr, followed by Senators Janssen, Cudaback, Bromm, and Beutler.


SENATOR STUHR:  Thank you, Madam President and members.  Just a couple comments.  I passed out a handout just telling of the reorganization efforts of my local school district and Henderson School District, which is now the Henderson-Bradshaw School District.  Just pointing out that some of the costs for reorganization, if you'll look, are on that handout, do not..are not covered by the incentive aid that will be received by these schools.  And I would hope that there might be some way that we could address that factor.  There's about $102,000 of additional costs that will be incurred by the district, and that's just an estimate, that you'll find from the attorney fees that will be involved, the cost of changing names on signs and buildings, of new uniforms.  Also, there will be a reduction in force of six teachers and attorney fees for those kinds of hearings.  So I would hope that there might be some way that this additional factor...  I know that there is only $2 million, but I think that we are going to see an additional number of schools that are going to be involved in these organization efforts.  And I do not feel that it is appropriate for these schools to be penalized after they have reorganized and tried to do what is most efficient and effective in their local districts.  I will continue to listen.  I did support the




amendment in the committee.  Thank you.


PRESIDENT ROBAK:  rhank you, Senator Stuhr.  Senator Janssen.


SENATOR JANSSEN:  Thank you, Madam Lieutenant Governor, members of the Legislature.  Senator Bohlke mentioned the fact that there are some schools that are losing state aid, they're losing students, and would this be fair to move this hold-hurmless money to the schools that are reorganizing.  Well, it seems to me that if there are schools that are losing students and losing state aid, then they should look at exactly what we're trying to do here--reorgan12.e with some other schools.  You know, I ...  and I remember as ...  when the district that I am talking about first started reorganizing, they were held harmless for three years.  It went from 100 percent on the first year, 66 percent the next year, and 33 percent on the third year.  So that was the right philosophy then.  You know, why do we change now?  Prior to (LB) 806, that was the way it was.  And it's not only...  and I'm not only looking at the 15th legislative district, I've got two schools that are reorganizing in that district, two Class VI schools.  Another one that's started the process now are going to be voting on that in June.  The right thing to do, we've told them this was the right thing to do.  So it's not only for my district, I'm looking at Vie rest of the state.  If we can make it easier and helpful for those districts that Senator Bohlke talked about, more power to them.  This is what we keep advocating is that we need, if you're having a problem, your property taxes are too high, for heaven sakes, do something about it then.  I can see a lot of districts that, if we keep that so-called carrot on the stick out in front of them, are eventually going to take a bite of that carrot and come into what we've been advocating for at least the six years that I've been here and I think it's been prior to that.  With that, thank you very much, Madam Lieutenant Governor.  I'll give the rest of my time back to the Chair.


PRESIDENT ROBAK:  Thank you, Senator Janssen.  Senator Cudaback.


SENATOR CUDABACK:  Madam President and members, I'd like to ask Senator Bohlke a question, please.


PRESIDENT ROBAK:  Senator Bohlke, will you yield?






SENATOR CUDABACK:  As we all know, Senator Bohlke, usually it boils down to the fact, how is it going to affect my district?  Is it going to impact it any?  And my question goes back to the $2 million.  Does the $2 million come from the equalization aid formula?  Where does the $2 million actually come from?


SENATOR BOHLKE:  It...when we created the incentive money, that does come from equalization.  If we didn't have those incentive payments, that money would be available to go out in equalization.  But vie made that decision, when we passed the incentive bill, to fund that at 1 percent.  And so we set aside 1 percent of what really is money that would be available to go out, in equalization, for incentive payments.


SENATOR CUDABACK:  So it actually isn't new money then?  It actually isn't...


SENATOR BOHLKE:  No, it's not new money.


SENATOR CUDABACK:  It won't come from.  the equalization aid.


SENATOR BOHLKE:  Right, it comes from...  it comes from that, that we took out of equalization.  And what we would end up doing though is "incenting" a school district because they're losing state aid.


SENATOR CUDABACK:  The next question, if we don't...


SENATOR BOHLKE:  And we meant ...  but, let me finish that.  We meant to "incent" school districts who were reorganizing, and that's what, I think, the Education Committee is trying to point out to people on the floor.


SENATOR CUDABACK:  If we don't use these monies for Senator Janssen's program here, where will those $2 million eventually sind up?


SENATOR BOHLKE:  That $2 million will stay there in incentive money that will be used for school districts that merge or




consolidate, or school districts that unify.


SENATOR CUDABACK:  So the money will be used in another form, if we don't use it in this form?


SENATOR BOHLKE:  They...  it will remain as incentive...




SENATOR BOHLKE:  ...  there will be incentive money.  That money is set aside.  If we don't do this, we have 1 percent of the...  legal counsel is looking at me, so let me check.  Yes, the 1 percent is out of the equalization.


SENATOR CUDABACK:  Okay, thank you.  I'd like to ask Senator Janssen a question, please.


PRESIDENT ROBAK:  Senator Janssen, will you yield?




SENATOR CUDABACK:  Senator Janssen, is this meant to be for just a one year thing, or is it ...  is this a carry-on?


SENATOR JANSSEN:  Senator Cudaback, if a school reorganized this year, next year, when they set their budget, that will be the base year.  All right?  That is when they get their first incentive payment, that's different from the hold-harmless.  All right, what I'm asking for is that first year, that first year to be held harmless from the loss of state aid that they may incur or they may not incur.  And you asked about the $2 million.  All right, that $2 million is for incentive money, I'm asking for the first year.  If, if by chance there are enough schools that are reorganizing and they use up this $2 million with the incentive money, there is no money left for hold-harmless, they don't get any.  If there is ...  and, like I said, if there is 3, $400,000 left in there, and there are 10 schools, they'd pro-rate what is left for the holdharmless.  So they may not be getting held harmless 100 percent the first year either, all depends.






SENATOR JANSSEN:  The $2 million is a set amount.  I don't want to take up anymore of your time.  I hope that answers ...


SENATOR CUDABACK:  That's fine.  I guess that's about as clear as mud here.  But, I guess, we'll listen and find out what goes on after the second year, I guess, or after the first year.  I guess that's my...


SENATOR JANSSEN:  No, only the...  Senator Cudaback, just the first year.


SENATOR CUDABACK:  Just the first year, got that.  Thank you, Senator Janssen.


SENATOR JANSSEN:  That first year.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Bromm.


SENATOR BROMM:  Thank you, Madam President.  And I ...  I need a clarification myself, I guess, on this point Senator Cudaback was asking about.  And I wonder if Senator Bohlke could clarify this for me?


PRESIDENT ROBAK:  Senator Bohlke, will you yield?




SENATOR BROMM:  Senator Bohlke, I'm not sure I'm reading this correctly, but I think that, if the $2 million weren't used up, that that's added back to the Tax Equalization Fund and distributed, the following year, as part of the Equalization Funds in that...  in the following year.  Is that correct?


SENATOR BOHLKE:  Actually, legal counsel was pointing out, first it would have to go back to the General Fund.




SENATOR BOHLKE:  And then it would have to be put back into the equalization.




SENATOR BROMM:  Yes.  It seems to say, in the committee amendment, that the money is intended to go back into equalization the following year.  Well, it's on page 15 of the committee amendment, I guess.  "The Legislature shall reappropriate any unexpended balance of the Set Aside Funds to the Tax Equity and Educational Opportunities Fund Zor the certification of state aid following the school fiscal year in which the incentives were paid." So it says, I think, right there that the Legislature shall appropriate.  Is that right?


SENATOR BOHLKE:  Right, but I was just trying to point out that it would have...




SENATOR BOHLKE:  ...  to go to the General Fund first and then come back.


SENATOR BROMM:  Exactly, yeah.  But I just wanted to clear that up, because there seemed to be some confusion.  And I guess IN all fairness we need to understand that.  But my...  I guess my point is no matter what philosophy you attach to the distribution of the $2 million, we have made a policy decision, which is not inconsistent with years past, to allow some incentives for reorganization.  Prior to (LB) 806, that incentive was 100 percent in the first year following reorganization, 100 percent of the state aid that you had before.  So, that policy or philosophy, if you would like to call it that, existed prior to 806.  With 806 we changed that philosophy.  There were so many other major items of discussion that this was maybe one of the lesser items of discussion at the time.  But, in any event, we did change it so that a district is not guaranteed the same amount of state aid, if they reorganize in that first year, as they were before.  That policy change caught some districts off guard who were in the process of reorganization, or were very close to the brink of doing it, or maybe had voted to it, very near the time we passed (LB) 806.  So I think...  I think, if we're willing to devote $2 million maximum to incentives for reorganization, that Senator Janssen's proposal is a fairly modest one and one that we certainly should consider adopting; I'd urge the body to do so.  Thank you.




PRESIDENT ROBAK:  Thank you, Senator Bromm.  Senator Beutler.


SENATOR BEUTLER:  Madam President, members of the Legislature, in supporting the position of the Education Committee on this, let me point out one other thing that the Education Committee has done that doesn't address the central philosophic difference here, but I think which pertains to the issue of reorganization and which is helpful to the reorganization effort, and which represents a sensitivity of the Education Committee to what's going on in this area.  It's not that we have not given a lot of consideration to how best to facilitate mergers and consolidations when individual school districts make that decision.  But there is another bill and another concept that will come before you, before much longer in this session, called the Unified School Districts, which is a completely new and separate means of essentially having a trial marriage.  In other words, several districts can get together and make an agreement.  There's a lot of flexibility in what that agreement provides.  And they can unify for a period of seven years, or less, if they break the unification agreement.  But, if they unify for a period of seven years, then they will qualify for these very same incentive payments that are the subject of this fund that Senator Janssen is talking about.  So, because unification is going to be a more appealing alternative, in many cases, to actual merger or consolidation, it is anticipated that there will be a whole...  a significant number of efforts to unify as opposed to consolidate and merge.  And that, as between all of these means of sharing resources, that there will be a much larger pull on the Incentive Fund.  So, instead of encouraging people to double-dip, I think what the Education Committee has done makes some sense, and that is to try to broaden and encourage the number of people who have access to the Incentive Fund through the means of this unified school district concept.  You'll hear more about that as time passes.  I don't want to get into it, but I want to indicate that there will be another draw on this Incentive Fund, and that the Education Committee is making an effort to accommodate and facilitate merger and consolidation in yet another way.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Hartnett.


SENATOR HARTNETT:  Madam Lieutenant Governor, Senator Janssen,




could I ask you a question?


PRESIDENT ROBAK:  Senator Janssen.


SENATOR HARTNETT:  Maybe you said this already, Senator Janssen.  The 2 million is for one year, or does it go for how long a period of....


SENATOR JANSSEN:  There's $2 million set aside each year for...


SENATOR HARTNETT:  Each year, for how many years?


SENATOR JANSSEN:  Well, see, there...


SENATOR HARTNETT:  Ah, (laugh) on, and on, and on?


SENATOR JANSSEN:  All right, for three years.  No.




SENATOR JANSSEN:  Three years.




SENATOR JANSSEN:  Three years, the first year, second year, third year you will get these incentive payments.


SENATOR HARTNETT:  You don't lose any, is that what you're saying?


SENATOR JANSSEN:  No, these are extra incentive payments for reorganizing, to cover costs ...


SENATOR HARTNETT:  Oh, they're extra ...  okay.


SENATOR JANSSEN:  ...  associated with the reorganization, based upon how many students are moving into different tiers in that system.  If you're moving, of course, you know the K through 6 students have a lesser value on this system,...






SENATOR JANSSEN:  ...  7 through 9 have another one, and then 9 through 12 have ...  that's the way the formula works.




SENATOR JANSSEN:  I'm asking, what this amendment does is out of that $2 million, if there is any money left in there, if there is any money left, be pro-rated to the hold-harmless for those districts on that first year.


SENATOR HARTNETT:  So if they ...  what we have ...  what you're saying is if we have a lot of schools reorganize, maybe not all the schools will get part of this money.  Is that correct?


SENATOR JANSSEN:  They all get incentive money, but they may not get any of the hold-harmless money.


SENATOR HARTNETT:  Kind of first come, first served?


SENATOR JANSSEN:  They'll be pro-rated.  If there's any left, it's pro-rated amongst the schools that are reorganized, the first year, first year only.


SENATOR HARTNETT:  First year, okay, thank you.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Bohlke.


SENATOR BOHLKE:  Yes, Madam President, members.  One other part I think we haven't discussed, and, Senator Janssen, if you would yield to a question, please.


PRESIDENT ROBAK:  Senator Janssen, will you yield?




SENATOR BOHLKE:  This ...  this new reorganized district is receiving how much in incentive payments?


SENATOR JANSSEN:  One hundred and seventy thousand dollars a year.


SENATOR BOHLKE:  So, over three years, a little under








SENATOR BOHLKE:  ...they are receiving?




SENATOR BOHLKE:  And they came in and wanted additional money because they wanted to be held harmless.  Now, were they going to lose state aid, if they reorganized or not?




SENATOR BOHLKE:  I think ...  definitely?


SENATOR JANSSEN:  Yes, yeah, all right, yes.


SENATOR BOHLKE:  So, this really isn't...  I mean, what people have to keep clear, and the discussion we have had before, this is a district that is getting just under $600,000 in incentive money for reorganization.




SENATOR BOHLKE:  They would have lost state aid, whether they reorganized or not.  But they were coming in and saying, we want to, not only get just under $600,000 in incentive money, but we also want to be held harmless for what we lost in state aid, which means they probably ...  would they have come before the Education Committee, if they hadn't been reorganized and, because they had lost state aid, want to be held harmless?  I mean the two are not ...  they were going to lose that, if they were reorganized or not.


SENATOR JANSSEN:  That is true.  That, of course, is what they anticipate on losing, their valuation.  They don't know exactly if that is going to be correct or not.  You understand *--hat.




SENATOR JANSSEN:  You understand that.  But prior to (LB) 806,




incentive money would have still been there, the hold-harmless would have still been there.  Am I correct?


SENATOR BOHLKE:  And the incentive money is still there, 806 did not do away with incentive money?


SENATOR JANSSEN:  No, it didn't.


SENATOR BOHLKE:  And it still held them at 15 percent, it just did it in a different time frame, but still they want to be held harmless for something, my point is, that would have been there if they reorganized or not.  And I think that's what you said, that they would have lost state aid if they had reorganized or not.


SENATOR JANSSEN:  According to the formula, yes, they would have.


SENATOR BOHLKE:  Okay, thank you.  And that ...  and I think, Senator Janssen, thank you.  Oh, I'm sorry, did you want to....  Well, let me make my point, then if you want to respond, I will le,_- you.  But that's the point.  We are giving out, and I know that was a bill that Senator Wickersham and I carried on the incentive money; certainly support that.  We are giving a district just under $600,000 in incentive money.  But then they have come, and they had, like I said, two other issues before the committee.  One, they wanted double incentive;--., because they had a salary issue with bringing the Class Is into the Class VI.  We thought we recognized that by...  in other areas being able to move that money to the first year.  And the committee did not feel that that was a factor that needed to be recognized.  The committee also felt that this is a district, if they...  it really had nothing to do with the reorganization.  They would have lost the state aid, if they would have reorganized or not.  They were coming in and asked...  asking to be held harmless under a reorganization plan that they could have just as well come before the committee, if they hadn't been reorganized, and we'd be having essentially the same argument, should we hold them harmless, because the factors that ...


PRESIDENT ROBAK:  one minute.




SENATOR BOHLKE:  ...happened?  And, if we hold them harmless, I would say that everyone here on the floor who represents school districts, who had factors change, should- also probably be standing up and saying, me too.  And that's, I think, where the committee felt that this could not be justified.  And you'll have your close, so you'll have an opportunity to respond.  Thank you.


PRESIDENT ROBAK:  Seeing no further lights, Senator Janssen, to close.


SENATOR JANSSEN:  Thank you, Madam Lieutenant Governor, members of the Legislature.  Just to reiterate a little bit on what Senator Bohlke's last statement was.  Yes, not all schools, not all schools will get that much incentive money, if they aren't moving that many kids.  But they still may have to bring in staff from those other schools.  They may ...  may not have to RIF any teachers, so on, so forth.  They may not be getting...  they may be getting the drop in state aid but not getting as many students moving into another tier.  So, every situations is going to be a little bit different.  We're using one scenario.  Yes, the $170,000 is a big carrot, but there are also some big expenses in this particular...  in this particular district.  What weirs looking for here is putting back into place, in moderation, what (LB) 806 took out.  In moderation, I mean by ...  you may not get held harmless that first year from what you were before.  It all depends upon how much, how many funds are left in the $2 million.  Hopefully, I might add, that I hope they're all gone.  I hope there are enough district out here that are going to be reorganizing and taking advantage of the...  of the incentive payments so that there isn't any left.  That's the chance we will take, because I think it would be good for education throughout the state of Nebraska, and also the property owners in the state.  I believe that, yes, it does affect my district.  There are several districts that I believe are in the process right now of reorganizing, and I think this would be another boost, another carrot on the stick out there that they could take advantage of.  It's not adding any extra money.  I guess it all depends upon whose philosophy you want to talk about.  I think it's the right thing to do, and I hope that 25 of my colleagues think it is also.  Thank you.




PRESIDENT ROBAK:  Thank you, Senator Janssen.  The question before the body is the adoption of the Janssen amendment to LB 1134.  All those in favor vote aye; all those opposed vote nay.  Have you all voted?  Senator Janssen.


SENATOR JANSSEN:  Ask for a call of the house and a roll call vote, please.


PRESIDENT ROBAK:  There's been a request for a call of the house.  All those in favor vote aye; those opposed vote nay.  Please record.


CLERK:  17 ayes, 0 nays to place the house under call.


PRESIDENT ROBAK:  The house is under call.  Will senators please return to their seats and check in.  Will all unauthorized personnel please leave the floor.  The house is under call.  Senators, please check in.  Senator Wehrbein, will you check in, please.  Senator Brashear, Senator Brown, Senator Chambers, Senator Matzke.  We're waiting for Senator Brown and Senator Brashear.  Waiting for Senator Brown.  Senator Janssen.


SENATOR JANSSEN:  Senator Brown is left?


PRESIDENT ROBAK:  Senator Brown is the only senator remaining.


SENATOR JANSSEN:  Just go ahead.


PRESIDENT ROBAK:  Senator Janssen has requested a roll call vote.  The question before you is the adoption of the Janssen amendment to LB 1134.  Mr. Clerk, please proceed.


CLERK:  (Roll call vote taken.  See page 987 of the Legislative Journal.) 11 ayes, 25 nays on the amendment.


PRESIDENT ROBAK:  The Janssen amendment fails.  I raise the call.


CLERK:  I have nothing further pending to LB 1134, Madam President.


PRESIDENT ROBAK:  Senator Bruning.




SENATOR BRUNING:  Madam President, I move LB 1134 to E & R for engrossing.


PRESIDENT ROBAK:  Seeing no discussion, the question before you is the advancement of LB 1134.  All those in favor say aye.  All those opposed nay.  LB 1134 advances.  LB 1134A.


CLERK:  (LB) 1134A, I have no amendments to 1134A, Senator.


PRESIDENT ROBAK:  Senator Bruning.


SENATOR BRUNING:  Madam President, I move LB 1134A to E & R for engrossing.


PRESIDENT ROBAK:  Is there any discussion?  Seeing none, the question before you is the advancement of LB 1134A.  All those in favor say aye.  All those opposed nay.  LB 1134A advances.  LR 45CA.