Committee on Education LB 149

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in so we can get that done.  That helps move things along just a bit.  With that I will turn the hearing over to the Vice Chair, Deb Suttle.  And I will move to the table to introduce LB 149.


LB 149


SENATOR SUTTLE:  Senator Bohlke, welcome.


SENATOR BOHLKE:  Thank you, Senator Suttle and members of the committee.  I am here today to open on LB 149, which is certainly a bill that is familiar to all the members on the committee.  And I know that we have already spent some time discussing it.  People have read about it at least why we're here in the newspapers..  Let me go over just a ...  briefly some of the things that we are trying to accomplish and I will not go over in detail the information the committee has received from legal counsel going through the bill point by point.  You all have that in front of you.  But I do want to talk about some of the things that we're hoping that we will be able to do with the passage of 149.  Certainly we will hear two words:  predictability and stability.  Schools have asked for it.  We've attempted with this bill to add some factors in that will certainly bring that predictability and stability that- apparently was not there December 1 of this year.  Schools did see wide swings.  That's ...  you know makes it very, very difficult for them to do any kind of planning.  It makes it difficult for all of us to explain to them why they saw those wide swings.  But we do have an explanation.  And I think with LB 149 we can make some of those corrections to prevent that in the future.  However, I always caution people to remember that this is a formula that is supposed to react to some things happening in the district.  When we respin or look back over our shoulders, there will always be some corrections that should be made.  And generally that means that if you have more money coming in at the local level you need less state aid.  With 149 it would look at the fact of enrollment and errors.  We would always be reacting to those two factors and we should.  The other, on December 1 two things happened.  We had a respin, that I've talked about, and that's looking over our shoulders as far what we did in aid for schools in the.  past year and we certify aid for the next year.  In the respin, the problem this year, one was it would show that schools


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would have to repay $22 million.  You notice I say schools would have to repay.  It's not that we would be looking at spending a new $22 million, but actually we would be debiting the account of schools in the future.  And when we do the respin why do we show that schools would have to repay that 22 million?  It has a lot to do with the averaging we were looking at.  And we've talked about the averaging rather than actual data caused some problems.  When we looked at the average of spending, we looked at a three year average.  And then in the respin we plugged in a one year.  But it was an atypical year.  And this is what really caused the problem.  Because it was a year where we were coming under the dollar ten levies and asking schools to make ...  and they were having to make serious cuts in their spending.  It was atypical only because it was in a pressured time when schools were having to react.  They will continue to make cuts.  They will have to as they approach the dollar levy.  But it, it looked like...  or we showed a picture that schools were ...  did not need the 22 million when in fact by pulling that one year out, that atypical year, it did not give a true account of what schools had done, what they had done with their spending, and the proper level of funding they need for, for this year they are currently in and are spending the money.  The other thing it did was to certify aid for next year.  The bill that we're looking at would establish a process and a method for certifying that aid by looking at it being ten percent under the maximum levy.  That is not currently the way we do it.  However, tie will probably point out one more time that the commitment of the state establishing the level of funding for schools is currently stated in law.  We have had a difficult time convincing some people that that is the case.  But when we see the status sheet that.  will be presented from the Appropriations Committee to the Legislature it will.  show an amount, a commitment of the state to that level of spending.  Now some people have said that we only had that in our intent language.  I would point out to you that when you see that on the status sheet a dollar amount cannot appear on a status sheet if it's only intent language.  It is in law.  The commitment is there.  It has been there, it was there, and soon we will have the visual aid with the status sheet finally proving one more time the commitment is there.  It is in law.  I don't know how to say it more plainly.  I don't know how to convince some people who have not been convinced until perhaps they see that status sheet.  But when we get


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it, when we receive it, law requires, law requires that there is a commitment of the state for funding public education.  This bill simply puts in a process and a method for determining what that commitment may be.  As the sheet pointed out, we need to move this through with the emergency clause because we need to establish for schools if we are going to re-certify aid.  We need to get that to them in time that they can make some type of budget decisions.  And, of course, they always have April 15th deadline when they have to make decisions as far as staffing.  We believe with this that we can, for this year, re-certify April 1.  Following years we would do it February 1, therefore eliminating the problem of using estimates rather than real data.  We will be able to use real data.  And by moving that date, by allowing the local effort rate to float as we look over our shoulders and by establishing the process and method of ten percent under the maximum levy as we look to the future, will bring the real stability and predictability that I think everyone in this room, and everyone in this building, and everyone out there in communities across our state are hoping they can depend on from the state aid formula.  And with that, I think we'll hear from other people that will give you an idea why from their perspective in individual districts that they certainly hope that this bill is successful.  And perhaps there may be those who will be testifying to the contrary.  I do not know.  But I'm happy to answer any questions, although I do ...  I should point out to everyone this is a bill ...  a committee bill, meaning that the Education Committee...  everyone has signed on to this bill in support of it.  And so it's not...  I open on it because I serve as Chairwoman, but it is a committee bill.


SENATOR SUTTLE:  Thank you, Senator Bohlke.  Are there any questions for the Senator?


SENATOR BOHLKE:  Senator Suttle, I do know that there are some testifiers, and I don't know if I gave you that list, who have indicated ...  have...


SENATOR SUTTLE:  There are...I have a total of 16 names that have already signed in...  are there any?


SENATOR BOHLKE:  And do you have the sheet that I had had?  I'll come and check to see if you have the sheet.


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SENATOR SUTTLE:  Okay.  Are there more people that want to talk about this bill besides the 16 that have already signed up?  Okay.  I will take them in order unless I am indicated from the Chairman that she wants to change the order.  Dr. Karnes, if you'd like to come up first.




LIZ KARNES:  (Exhibit F) Senator Bohlke and the members of the Education Committee, it is an honor for me to be here today.  My name is Liz Karnes.  I live at 417 South 93rd Street in Omaha.  I would like to speak today in support of LB 149.  I'm speaking today as a parent of four daughters, who have been in the public schools in Nebraska; as a taxpayer; and as a 13 year member of the District 66 school board in Omaha; and also as a person who has had the good fortune to visit public school districts throughout the state of Nebraska.  I am very concerned with the quality of education not only in my own district, but throughout the state.  After reviewing the elements of this bill and discussing its implications, I would like to share with you just four points in hopes that all, members of the Legislature will consider the overall benefits to education and to taxpayers that this bill will provide.  First, and most important, continued property tax relief is a very important element of this bill.  And I hope that the other legislators know this.  Tax levies for schools have declined and many quite substantially.  Two years from now school districts will face continued restrictions in revenues due to further, reduction of the levy lid.  While continuing to provide less reliance on local property taxes to generate the revenues needed, the technical changes in this bill will insure that adequate revenues will be provided to school districts to not only function adequately, but to also maintain appropriate progress toward educational excellence, which is a key for our state.  Second, this bill will allow the Legislature to maintain expenditures for aid to education in the amount that was originally intended.  This bill is not, and emphasize, not about adding new spending to education, or for expending state appropriations that are not really needed by local school districts and communities.  As a long time school board member, I can attest to the fact that financial resources for teachers' salaries, classroom materials, technology, continual teacher training and development, building maintenance, building renovation.,


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transportation, and other increasing operational costs almost always falls short of actual need.  This fact has become even clearer as school districts and school boards have prepared and approved very conservative budgets in each of these past four years of spending and levy lid restrictions.  A third element of this bill will allow the state to use current data in calculating needs and resources for local students ...  school districts.  As a board member, I know the value of actual data and I know this has always been a problem for allocation purposes, especially for growing districts, and certainly for all districts that receive equalization from the state.  I might point out that I am a board member here not because of our school district, but because of all the school districts in the state because our state is only as good as the public education is in all of its districts.  I understand this problem of accurate data will be addressed and corrected with this legislation and will still afford school districts time to adjust to changes in revenue.  Fourth, and most importantly, this will provide, as Senator Bohlke clearly stated, much more stability and predictability to the state revenues that school districts will receive as aid each year.  As a school board member of a district which has had to make significant adjustments due to the major swings in state revenues during the past few years, I can attest to the fact that planning and developing a budget while experiencing major unanticipated revenue changes becomes very, very difficult.  I know Senator Price is nodding her head as a former school board member.  It causes serious disruptions in our educational systems and our communitie's as well.  Stability should be an issue we should all support for public education in our state.  I know that there has been controversy in the past year on various bills.  And I know that our business leaders want our state to have the property tax problem settled.  But I also know, as a business woman myself, that businesses will not come to Nebraska ...  that they will not have their families come here unless we have, quality public education.  That is why Nebraska is a great place to live.  That is why there are so many people here today endorsing this bill.  So I encourage all the members of the committee.  I thank you for allowing me to testify.  I encourage you to share with your other legislators in the State Legislature that they should support LB 149.  Thank you.


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SENATOR SUTTLE:  Thank you, Dr. Karnes.  Are there any questions?  Senator Wickersham.


SENATOR WICKERSHAM:  Dr. Karnes, good to see you.


LIZ KARNES:  Good to see you.


SENATOR WICKERSHAM:  There is a trade off in the bill.  And it involves the change in the certification date from December first to April first.  And the trade off is that schools would know at a later date what state aid they might receive, but will using hard numbers rather than estimated numbers.  I'm...  I take it from your testimony that you endorse that trade off as an appropriate policy choice.


LIZ KARNES:  And that's only for the first year. Is that correct?


SENATOR WICKERSHAM:  No, that would be...  the April first...  I'm sorry the February first certification date would be on going.








SENATOR WICKERSHAM:  So you think that the February first certification date will allow schools adequate time for planning so that they can develop their budgets and make any necessary changes?


LIZ KARNES:  Yes, I do.  And that's much better than having to go into budget years without having any indication of the amount of money we'll have.




LIZ KARNES:  Thank you.


SENATOR SUTTLE:  Thank you, Dr. Karnes.


LIZ KARNES:  Thank you, Senator Suttle.


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.SENATOR SUTTLE:  Next on the list that I have is Kimberly Ma.


KIMBERLY MA:  Thank you. I have copies of my statement.  (Exhibit B)


SENATOR SUTTLE:  Could I have a Page pass that out to the committee, please?  Go ahead.


KIMBERLY MA:  Members of the committee, my name is Kimberly Ma and I am currently a senior at Lincoln Southeast -High School about to finish my last semester.  I am appearing before you today at the request of Lincoln Public Schools, which I have attended for the last 13 years of my education.  My purpose for testifying is not to inform you of the merits of LB 149, but rather to let you know what state ...  but rather to let you know what state funding for education in Nebraska is doing to assist a student like myself to accomplish.  These past 13 years, I have participated...  I have participated in school activities such as orchestra to vocal music groups, student council to debate, and varsity cross country and track to DECA, a marketing club, all thanks to state funding and Nebraska taxpayers.  Without continued state funding, these activities might one by one disappear or students might have to pay to play.  With extracurricular activities, students are given a well-rounded education, not ones just straight from the books.  I spoke out about the impact of Initiative 413 during the Governor's Education Summit to prevent the measure from being placed in the Constitution.  I was concerned for various reasons.  The State Board of Education passed new standards for students across the state in math, English, social studies, and science to ensure that all young Nebraskans receive the same education.  But many students and I found it a little ironic that the state wanted to reduce funding to schools with Initiative 413 but at the same time they wanted raise the level of education one student receives.  Student did not understand how both Initiative 413 and the new standards would be feasible at the same time.  If Nebraskans want better education for their students, why are they not willing to continue funding for it?  I have been told that LB 149 will help stabilize state aid to schools.  My two younger brothers will start registering for classes at the end of the month for their sophomore and senior year at Southeast.  My brother


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and...and other students may be registering for select advanced classes that meet their unique needs but may not have large enrollments such as Differentiated Calculus or Applied Architecture and Design.  Other students are registering for the Lincoln Public Schools Science Focus Program while still others are registering for regular classes in the core subjects to fulfill their new graduation requirements under the education standards.  Without stability in funding, LPS may reduce the number of classes offered so that the district can guarantee that the core courses meet state standards are always available to students.  Or classes may get larger and the teacher will ...  teachers will have a harder time reaching out to every single ...  every single one of their students.  I have been in the large classes with 60 students, a regular class of 34, and a small class of 17.  Student/teacher interaction is vital to the classroom, and the variety of classes helps build the complete high school experience.  I urge the committee to advance LB 149 to the body of the Legislature and hope the entire legislature passes the bill, so students across the state may benefit from a quality education that will enrich the rest of their lives.  Thank you.


SENATOR SUTTLE:  Thank you, Kimberly. Are there any questions?  Senator Price.


SENATOR PRICE:  Thank you so very much for coming and testifying.  It's always nice to have testimony from someone that we are in this job for.  As a school board member and now as a legislator, thank you.  And I would like to track you in about ten years and see where you're going to be.  In ten years you may be ...  may be occupying one of these seats.


KIMBERLY MA:  Thank you.


SENATOR PRICE:  And thank you and consider and ...  and continue to be active as you are.


KIMBERLY MA:  Thank you.


SENATOR SUTTLE:  Thank you, Kimberly.


SENATOR BOHLKE:  thank you, Kimberly.  This isn't directed at you.  Senator Suttle, maybe I need to explain to people when I introduce a bill then I turn it over to the Vice


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Chair so as if there are people coming up in opposition to the bill they would not feel that I was directing questions and making them uncomfortable.  So if you're wondering why I've turned this over to Senator Suttle it's not because of a lack of passion on the bill.  (laughter) It's because of generally how we ...  we operate on this ...  in this committee.


SENATOR SUTTLE:  The next on my list is Bev Peterson.  Congratulations on being the newly elected member of- the State Board of Education, the head of it.


BEVERLY PETERSON:  Thank you very much.


SENATOR SUTTLE:  Welcome to the committee.


BEVERLY PETERSON:  Senator Bohlke, members of the Education Committee, I welcome this opportunity to be here today.  As she has pointed out, I recently was elected state school board president.  This is a huge responsibility for the education of all the students in the state of Nebraska.  And I want you to know that I don't take the job lightly and that I'm here today because I think this is one of the mote important bills that's going to come before this session.  And we need to make sure that we make progress in this direction.  Many of the testifiers today you will hear repeat testimony.  You ...  we are here to reinforce some of the things that we feel with LB 149 we can do and improve our schools.  And it needs to be done.  I have not had an opportunity to meet with all the members of my state school board, but I have tried very hard to communicate with all of them to make sure that my testimony comes as a member of that state board and with their voices behind me.  As YOU all know, we had Martin Luther King Day yesterday and I was informed that I would...  could testify and they would like me to testify on Friday.  So there hasn't been an opportunity to do a lot of communicating.  But I've tried hard and I want you to know that I speak for the state school board.  I have to put these glasses back on now because you know as you reach...  and this beautiful gray hair that I'm developing shows my age a little so I have to...  I'm not looking down at you.  The state board does not pretend to know how the state aid formula works technically, but I'm working on that.  And in terms of state policy, I truly believe that the Legislature takes the lead in setting out the school financial formula.  On the other hand, it's of the


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responsibility of the state school board to see that that education and those funds are used properly and in the correct manner.  We as members of that state school board know that there has been a problem in the stability and predictability of those funds.  The superintendents in my particular district are always concerned because they have no idea and it's constantly changing.  You've put then on a roller coaster.  And it's not fair.  And we can do something about it and you can.  It's very, very important that we have that type of system out there so that we know how to go forward.  All of you have budgets of your own that you work on.  We can't have a reduction-in-force and then the next year have funds and have to hire that person back.  We have to know where we're going.  And I will tell you that the schools out there have worked very hard to tighten the belt.  But all those funds are needed.  I jokingly said that I could take that money and I know I could use it out there very wisely.  And I know you all probably have ways that you could spend it also.  It's needed and it should be there because it's not added to.  It's already out there and is being used by our school districts.  We know that all schools are never going to be happy with the amount that they receive under the formula by LB 149.  But they will be able to predict in advance whatever the amount.  Consistency in that state formula is a must.  This has been lacking for several years.  I want you to know my final point is that our school administrators are spending too much time on school finance.  They need to spend more time on educating those students and getting those standards in place and that accountability.  We need to have them have time to do the job that they're supposed to do and not be worrying how everything is going to get paid for.  We've got to take them off that roller coaster.  I thank you for your time and your interest in education.


SENATOR SUTTLE:  Thank you, Mrs.  Peterson.  Any questions?  Don't see any.  Thank you very much.  Next on my list is Larry Hiatt and then Nelson Dahl.  If you could...


LARRY HIATT:  Rather than take your time by repeating very much what Mrs. Peterson and Dr. Karnes said, I respectfully withdrawal my request to speak to you.


NELSON DAHL:  Rather than take the time, I'd like to request to be able to withdrawal also.


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SENATOR BOHLKE:  Mark this as an exceptional day!


MALE FROM AUDIENCE:  And we thank you.  (laughter)


SENATOR BOHLKE:  For the record, Nelson Dahl asked not to address the committee.


SENATOR SUTTLE:  We will then go to Linda Poole.


LINDA POOLE:  Good afternoon.  I'd like to thank you for the opportunity to come and address our support of LB 149.  1 am coming to you as a parent of three children in the public schools, a former teacher in the public schools, a taxpayer, and currently president of the Millard Board of Education.  The Millard Public Schools supports the concepts outlined in LB 149, which would move the state aid certification date to February first and replace the current use of estimated cost and receipt information with more current actual information.  Since the present...  since the present state aid concept was implemented in 1990 there have been various concerns raised about the formula.  Two of the concerns that had been voiced repeatedly dealt with the timing of the state aid certification and the use of older data as opposed to current data.  One of the ways to address these concerns was to estimate the cost and receipt information for, schools.  The use of estimates allowed the state aid certification to be moved from July first to December first.  It was thought that having this information earlier would allow schools to plan better.  As you are aware, the original 1998-99 state aid calculation was the first time estimates were used and the first time state aid was certified on December first.  when the 1998-99 state aid was recalculated as part of the December 1, 1998 certification, a large number of districts experienced significant changes in their aid because of this recalculation.  we do understand, however, that not all of the changes noted were due to the recalculation.  Given that LB 149 proposes an annual certification date of February first, schools could still receive their state aid certification in a time frame which would allow for staffing change, if necessary, while also eliminating the need to use estimated cost and receipt information.  We understand that a district's state aid could still change as part of the recalculation, which would


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continue to replace fall membership with average daily membership.  However, the size of these changes should not be as dramatic and districts do have this student information available to them so that they may be able to foresee the impact of these changes in their student population.  Given that we know that the present state aid ...  present state aid calculation for the 1999-2000 treats items such as the valuation of motor vehicles differently than it will on the recalculation.  It would appear that it is appropriate to put the provisions of LB 149 in place now instead of have ...  having a similar discussion a year from now after the districts have seen another round of potentially significant changes in state aid due to the recalculation process.  We do realize that the inclusion of such ...  of items such as the certification provided on or before April 1, 1999 may impact the final numbers received for 1999-2000 and that the Department of Education has not been able to model this bill in order to provide any of those results.  There may be technical issues within the bill such as a change it makes in the deadline for audits, which needs to be considered as it moves through the legislative process.  However, the Millard Public Schools is in support of the basic concepts of this bill.  Thank you for listening and hopefully you along with the other senators will support LB 149.


SENATOR SUTTLE:  Thank you.  Are there any questions from the committee.  There are three other people from Millard.  Do all three of you?


STEPHEN KLEINSMITH:  Linda spoke on our behalf.


SENATOR SUTTLE:  Okay.  Julie Johnson?


JULIE JOHNSON:  She spoke on our behalf as well.




LINDA POOLE:  "Alrighty?"


SENATOR SUTTLE:  Thank you very much.


SENATOR SUTTLE:  Okay.  Brad Cabrera.  He waived.  D'Anne Welch.  Barry Ballou?  Okey-doke.  Are there any other testifiers for LB 149?  Okay.  Come on up.  Could we have a


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Page, please?  Yes, sir, go ahead.


JON HABBEN:  Senator Bohlke, members of the committee, Tammy, I have really appreciated the information that your office has provided and the information that Tammy has provided.  I guess I'm here to point out something rather specific...


SENATOR SUTTLE:  Could you identify yourself for the record?  I'm sorry.


JON HABBEN:  Oh, I'm sorry.  My name is Jon Habben.  I'm the superintendent at Newman Grove Public Schools.  I'm here to present something rather specific.  I won't get into the technicalities.  I won't read what I'm handing out to you.  (Exhibit C) But I think it, it bears mention.  I'm real pleased to see this LB 149 moving away from a three year average.  Newman Grove Public Schools, Petersburg Public Schools, and Albion Public Schools lost $1.7 million from what we received in 198-99.  Now I'm sure some of that was due to simply respin.  But a large portion of it was due to the way the special education allowance was calculated.  Three districts, our district, a very small C; Petersburg, D-1/D-2 size; Albion, larger C; obviously a 1.7 loss got our attention.  But I also wanted to point out that we share affiliated districts with Elkhorn Valley, Battle Creek, and Madison.  Those three districts, not including what their Class I's lost, those three districts also lost a million dollars.  Highly concerned, very interested in the Education Committee's response to these issues.  Obviously for us personally and individually, but certainly statewide, we applaud the effort by Senator Bohlke and the Education Committee to get in this quickly and move this quickly toward some resolution to these types of issues whether they be defined as hardship, whether they be defined as calculation issues, but we very much applaud the effort to address them.  To have waited a couple of years would have spelled disaster.  And obviously we don't want that to happen.  I'd like to leave you with, with this thought as we think about reducing the costs of education.  There's been a lot of discussion about cutting property taxes and not shifting any of the burden to income and sales tax.  I have to admit I get frustrated with that.  I really do..  I don't believe that's a shift.  I think that's figuring out a way to better balance the system to get the bill paid


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appropriately.  And I really support all of your efforts to do that.  Secondly, when we talked about reducing education, I have three kids.  One is 24, making a living now.  Real pleased about that.  (laughter) A 16-year-old and an 8-year-old.  You know, when my oldest son graduated from high school the last thing, the last thing that I ever thought we would be talking about was giving my other two kids less education.  I really hope we get on track and we do what's beat for all of the kids of the state of Nebraska.  Thank you.


SENATOR SUTTLE:  Thank you. Any questions?  I see none.  Thank you very much.


JON HABBEN:  Thank you.


SENATOR SUTTLE:  I have two more names up here.  Steve Wiitala and Al Inzerello?  Either one of you all?  Okay.  Come ahead.  Duane Obermier.  Page?  Oh.  They re busy.


DUANE OBERMIER:  Apparently.


SENATOR SUTTLE:  We'll get it.


DUANE OBERMIER:  (Exhibit D) Senator Suttle, Senator Bohlke, and members of the Education Committee, my name is Duane Obermier and I'm president of the Nebraska State Education Association.  The NSEA represents 23,000 Nebraska educators.  I'm here today to express the support of the NSEA for LB 194 (sic).  In fact, and I'm very proud of this, I have been asked to convey to you that a number of organizations join us in this support.  Among these organizations:  the Nebraska Council of School Administrators, the Nebraska Association of School Boards, the Greater Nebraska Association of Schools, Nebraska Rural Community Schools Association, Friends of Rural Education, Class I's United, and Women Involved In Farm Economics.  Now it could be that on future issues these organizations will not turn to the NSEA to speak for them, but...


SENATOR BOHLKE:  (laughter) This may mark a first ...  this may mark a first also.


DUANE OBERMIER:  But I sit here today as president of the NSEA and bringing the support of those organizations  for


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LB 149.  The state aid formula has unintentionally created a few problems for Nebraska schools and LB 149 corrects these problems.  And these have been mentioned in previous testimony, but I'll quickly run through them.  One, it restores the Legislature's intent to provide an additional $22 million in property tax relief.  Without the reauthorization of these funds.- local districts would have to assume that additional $22 million.  Two, it would provide stability and predictability to state aid.  Three, it would base state aid on current data rather than on estimates.  Four, it requires no new funds or additional appropriations.  And then perhaps most significantly, number five, it will continue, and I would emphasize continue to guarantee every student access to a quality education.  If, and these are just some examples, if LB 149 is not passed, Kenesaw schools stand to lose 68 percent of their state aid.  Silver Lake stands to lose 73 percent of its aid.  Bertrand would lose 74 percent.  Clarks would lose 80 percent.  Centennial will lose 83 percent.  Petersburg will lose 86 percent.  At Sutton, the loss is 87 percent.  At Hyannis High School it's 94 percent, and at Davenport its 99 percent loss.  The numbers tell you something is drastically wrong.  And then on top of all this is the one dollar levy cap looming in the not very distant future.  Senators, I join your chorus when you say that our state aid formula needs to be more predictable and LB 149 will accomplish that neutral goal.  If L boy...LB 149 does not pass, our students will suffer.  Less money means less service and less service means larger class sizes and fewer programs for students.  I commend the committee for drafting this solution to a pressing problem and I urge you to send LB 149 to the full Legislature.  Thank you.


SENATOR SUTTLE:  Thank you, Mr. Obermier.  Are there any questions for Mr. Obermier?  I see none.  Thank you very much.


DUANE OBERMIER:  Okay.  Thank you.


BRYCE NEIDIG:  Senator Bohlke and members of the committee, I also have printed copies here.




BRYCE NEIDIG:  I'm Bryce Neidig, a farmer from Madison and


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president of the Nebraska Farm Bureau Federation.  I'm here today to testify on behalf of the members of Farm Bureau in support of the general intent of LB 149 because it is part of an overall discussion on how we best continue to pride ...  provide property tax relief in Nebraska.  Let me begin by saying that we in Farm Bureau continue to have the same goals as we have had for many years concerning the financing of schools in Nebraska.- Farm Bureau supports reducing the burden of financing schools by property owners and a more equitable balance of the burden, seeking efficiencies in spending restraints and providing students with a quality basic education.  Our policy states that spending reduction should be the first and foremost way to provide property tax relief.  However, our policy also recognizing that spending reductions need to be orchestrated with replacement revenues.  With passage of LB 1114 in 1996, the Legislature recognized citizens' concerns about high property taxes and, we believe, correctly pointed the state down the road toward reduced property taxes.  Now is not the time to divert from that road.  Implementation of the levy caps as scheduled is needed to bring about needed efficiencies and alternative revenues to truly reform how we finance schools.  Our support for maintaining the integrity of the levy caps should not be viewed as support for the dismantling of schools.  Farm Bureau policy supports the levy caps as long an adequate alternative revenues are provided to maintain schools.  In rural areas, the burden of financing schools is falling increasingly on fewer and fewer people.  For example, agricultural property- owners account for more than 60 percent of the tax base in 202 K-12 school systems across the state.  Farmers and ranchers continue to pay a disproportionate share of the property tax burden while representing only a small portion of the population.  Because of the heavy burden property taxes place on agricultural property owners, the concepts contained in LB, 149 of providing greater stability in the state aid formula and additional revenues when the levy drops to one dollar are important.  Increasing state aid to schools, however, does not always result in property tax reductions for farmers and ranchers.  We continue, to have major concerns with the state aid formula and how it impacts rural schools, communities, and taxpayers.  Thus, we believe the discussion must go beyond the issues raised in LB 149 and extend to other means of providing direct, real property tax relief to all property owners.  We ask the Education


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Committee and the full Legislature to consider and discuss all means of furthering efforts of reducing property taxes not just LB 149.  Concepts like income tax credits, tax rebates, state take over of functions paid by property taxes and not related to property should all be part of the discussion.  Nebraska Farm Bureau stands willing and ready to be part of these discussions and help where we can.  Hopefully, in the end, we will have legislation that mix ...  maximizes to the fullest extent possible reductions in property taxes and at the same time provides necessary public services.  Thank you.


SENATOR SUTTLE:  Thank you, Mr. Neidig.  Are there any questions from the committee?  Senator Wickersham.


SENATOR WICKERSHAM:  Mr. Neidig, your testimony refers to perhaps other means of reducing property taxes statewide.  I take it your view is that if we didn't pass LB 149 that those other methods, if there are any other methods would just have to work harder?


BRYCE NEIDIG:  I think that's a logical conclusion, yes.


SENATOR WICKERSHAM:  So if we use LB 149 or we use some other system, your objective is still an overall reduction in property taxes?


BRYCE NEIDIG:  While maintaining the quality education, yes.


SENATOR WICKERSHAM:  Okay.  So there's ...  there is a recognition amongst your membership that if it isn't state aid it's going to be local property taxes that are going to provide that quality educational opportunity?


BRYCE NEIDIG:  That's correct.


SENATOR WICKERSHAM.  Even if it comes at the expense of levy override votes or other things that are necessary to fund the school?


BRYCE NEIDIG:  Yes, sir.  Yes, sir.


SENATOR WICKERSHAM:  And you'd rather avoid those levy override votes?


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BRYCE NEIDIG:  Most certainly.




SENATOR SUTTLE:  Any other questions?  Thank you, Mr. Neidig.


BRYCE NEIDIG:  Thank you.


SENATOR SUTTLE:  Are there any other testifiers?  Against?


ERROL WELLS:  No, for.


SENATOR SUTTLE:  For?  Go ahead.  Go ahead.


ERROL WELLS:  (Exhibit E) I see that I am following some really tough acts.  Anyway we will try to continue on here.  I am Errol Wells.  I am from Elba, Nebraska.  I am the president of the Friends of Rural Education as well as president of Elba Public Schools Board of Education.  I am speaking today to express strong support by the Friends of Rural Education for LB 149.  It in our hope that through passage of this bill that the subsequent funding will filter down to the schools most hard hit by the unexpected glitches in the 806 formula.  It is also our hope that passage of this bill will help the unwanted roller coaster ride for many of our school children, their parents, and our school districts.  We feel that many of our fine schools are being penalized for doing their job in containing costs in their -respective districts and hopefully this bill will go a long way to restoring lost funding due to glitches in the formula.  We would also request an end to the unrealistic projections of valuation increases, which are creating havoc in certain school districts by lowering the state aid due to a supposed increase in valuation, when in all reality, there are no, or very little, increase in said valuation.  We feel that it might be appropriate if the Education Committee would invite the state school board presidents to a conference so that lines of communication could be established, and perhaps opened up so that committee members could learn more of the board presidents' concerns and ideas on the school legislation issues.  And again we would certainly appreciate the passage of LB 149.  1 thank you.


SENATOR SUTTLE:  Thank you, Mr. Wells. Are there any


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questions?  I see none.  Thank you.  Are there any other testifiers for LB, 149?  Anyone against LB 149?  Anyone in a neutral capacity?  Senator Bohlke would you like to close?  And as she's going to close, I would like to make for the record that Class I Schools are on record of supporting LB 149.


SENATOR BOHLKE:  Senator Suttle and members, just a brief closing.  One reason you always have legal counsel sitting next to you is to tell you when you've made an error on your opening, of which I did.  You all think you're nervous coming up here before the committee that you're going to make an error, but every once in a while the person who is the committee Chairwoman does the same.  In my opening, I said that we would be setting a local ever rate...effort rate that would be ten percent below the maximum levy when it is really ten cents below.  And so I would like to be corrected for the record.  Also during the opening, although it was brought out in the testimony, did not talk a great deal about the motor vehicles and looking at introducing that into LB 149, an impact of motor vehicle taxes and those resources that are brought to school districts through that.  The committee has discussed it.  We knew that this would cause some changes for schools from what they saw December 1.  But if we did not introduce it in the 149, a year from now we would see some dramatic swings.  So knowing that schools have said to us, "We would like some stability and predictability," We thought it was best to bring those ...  that in to the recertification.  And so we will have to continue to communicate with schools that they understand introducing that into the recertification and the impact that that may have.  Certainly Linda Poole, from the Millard School District, as a president of the Board of Education understood that and we will make our colleagues understand that and hopefully work with all of you in understanding the impact of doing that.  The other that you've heard from people from all schools, all size schools from across the state, I think in support.  And we are not surprised by that.  I think we would be shocked if someone came in in opposition, for the very reasons that we all signed on to the bill.  We recognize that there was too dramatic of a swing December first.  We recognize that superintendents should not have to go with trembling fingers every time they go to their calc ...  to their computers to find out what their state aid is.  Through 149 we eliminate those, those large


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swings.  And certainly that in itself is enough reason for passage.  Also recognizing that there are some dramatic impacts of state funds that need to be restored and that schools not be required to repay the 22 million.  I think that's significant and also putting the method and process in place for the future.  There is an opportunity, because we are coming in to recertify, that we can solve another problem.  And that happens to be every year there are some errors made on the schools' reporting as far as how that may impact their particular school, whether this is in special education funding, whether Senator Coordsen and I worked on a bill last year where the valuation was improperly reported from one school district between another.  What this...  the department has said they will try very hard given the time frame we are operating under to get those changes in, those corrections in, when they are doing the respin.  I know that would be helpful to a number of school districts who, although it's not a large number, but had errors that they would hope could be corrected.  That's not a promise because we're asking them to do a great deal in this recertification.  But they've said that they will be able to do that.  And by doing that, we would get our first indications probably sometime in March as far as that always what we look forward to print out.  But I think backing it up and being able to get those corrections in would be a big benefit to a number of schools.  So with that I would Bay for the final reason, and you may start to hear me say this again and again, that we have asked schools to become more efficient.  They have done that.  If we do not react to the problems raised December 1.  1 believe we move many schools from being efficient into being ineffective.  That is not anything any of us would want to do and so I hope we can prevent that by moving LB 149 to the floor yet today.  Thank you.


SENATOR SUTTLE:  Thank you.  No questions.  This will end the hearing on LB 149.  And I will hand the committee back over to the committee Chair.


SENATOR BOHLKE:  That closes the hearing on LB 149 and we are ready to open on LB 152, Senator Thompson.  Senator Lynch is ...  wait a minute.  Which one are we doing?  Wall the school lunch one is going to two decide.  We're clearing the room here so take a minute and discuss it.


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SENATOR LYNCH:  Madam Chairman, members of the committee...


SENATOR BOHLKE:  Senator Lynch...


SENATOR LYNCH:  I'm sorry.


SENATOR BOHLKE:  I see that you're going.


SENATOR LYNCH:  Yes, ma'am.


SENATOR BOHLKE:  And I see that Senator Thompson recognizes when someone from the Appropriations Committee wants to go ahead we say, "Go right ahead."


SENATOR LYNCH:  (laughter) No.  No.  To be completely frank, it's not that.  It's because I was the only one who was willing to sign on a bill for her that has to do with cigarette tax, so...


SENATOR BOHLKE:  Well, after being perfectly frank go ahead and be perfectly Dan.