Debate Transcripts

LB 149 (1999)

Select File

March 8, 1999

PRESIDENT MAURSTAD: Thank you, Senator. Further discussion on the advancement of LB 574. Senator Jensen, you're recognized to close. Senator Jensen waives closing. The question before us is the advancement of LB 574 to E & R Initial. Those in favor vote aye, those opposed nay. Please record.

CLERK: 26 ayes, 0 nays, Mr. President, on the advancement of LB 574.

PRESIDENT MAURSTAD: The bill is advanced. Mr. Clerk, items for the record.

CLERK: Thank you, Mr. President. Your Committee on Education reports (LB) 182 to General File with amendments, (LB) 646 indefinitely postponed, (LB) 726 indefinitely postponed. Hearing notice from Retirement Systems. Senator Wickersham, an amendment to (LB) 141. Reference report referring the claims bills and a hearing notice from Business and Labor for scheduling of those two bills, Mr. President. That's all that I have. (See pages 855-858 of the Legislative Journal.)

PRESIDENT MAURSTAD: Thank you, Mr. Clerk. Pursuant to today's agenda, LB 149.

CLERK: Mr. President, 149 on Select File. Senator Smith, I have Enrollment and Review amendments, first of all, Senator.

PRESIDENT MAURSTAD: Senator Smith.

SENATOR SMITH: Sir. President, I would move the adoption of the E & R amendments to LB 149.

PRESIDENT MAURSTAD: Thank you. The motion before us is the adoption of the E & R amendments to LB 149. Those in favor say aye. Those in favor say aye. Those opposed nay. The amendments are adopted. Mr. Clerk.

CLERK: Mr. President, I have an amendment to the bill. However, there is a priority motion. Senator Quandahl would move to bracket LB 149 until Monday, March 15, 1999.

PRESIDENT MAURSTAD: Senator Quandahl.

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SENATOR QUANDAHL: Yes, Mr. President. I did make a motion to bracket this for one week because I wanted a chance to digest the information that we received last Thursday, and then also that just was handed to me right now, but I did discuss this matter with Senator Bohlke before this time, and I would grant her and give her the remainder of my time on this so that we can get some more information on this.

PRESIDENT MAURSTAD: Senator Bohlke.

SENATOR BOHLKE: Yes, thank you, Senator Quandahl. Mr. Speaker and members, you, at this point in time, right now are receiving the long-awaited printout. For those of you who followed instructions on e-mail, you should have your notebooks up here, and if you don't, make sure that you get these in your notebooks. Also, you may want to contact your office right now and ask them to bring the notebooks up because what you see here, we're giving the information a little differently than we have before, and once you put these ... this information in your notebook, you can really look at why schools are gaining aid or not gaining aid. In the beginning, let me tell you one very important thing. We are doing two things here, if you remember. One is we're looking at the respin, that's looking back over our shoulders, and, one, we're looking at the certification, which looks forward. On the respin, no school district would have lost money. As we look forward, we have been talking about the fact of motor vehicle taxes coming in. When you see that a school district has lost some aid, there are a couple of things you'd want to turn to in your notebook, and we can go through this a little bit, but you'd want to look at numbers of students, and you would want to look at the cost groups. There was a reduction in the cost grouping. The reason, remember, is we are going from estimates to actual numbers, actual data. We saw those cost groups between very sparse, sparse and standard bounce around previously and it should have been an indication to us when we would see some gain a great deal that the estimating process, that was the first clue, really, that the estimating process was ... did some things that does not, make the formula very predictable. I do believe, and I should also tell you that I know every agency sometimes gets a lot of criticism, and the Department of Education certainly gets their fair share,

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some probably deserved, some not deserved, but I wanted to tell you how hard they've been working on this. They worked on it throughout the weekend. I got the final draft that was handed to you late yesterday afternoon, and the reason being, what I was asking them to do, right behind the blue pages that show the numbers, and I am sure you're all looking at your school districts right now, right behind that is an analysis I asked them to do, and they have never done this before, for each of you to look at, you can go to the white pages right behind the that lost over printout numbers, and it will take any district that $1,000, and it will do an individual analysis for you of why that happened. Let me say that generally why that would happen would be in the cost grouping cost, or if you look at the amount of revenues coming into a district, you should look at other actual receipts, and then under that you will see system motor vehicles tax receipts. I am looking at the first page, Adams Central, and they have $203,000, 228... 203,228 dollar... $203,228.17. That's increased revenue. Those, obviously, we have said when you have increased revenue off of local property tax, you need less state aid. As you reme... as you remember, when we handed the books out, I said you should also look at district valuation. In your books , you had the levy rates prior, in your book, if you go behind that tab District Valuations, you had a few pages that showed the levy of districts. You have to get past that and there should be a yellow breaker that then shows you the difference in valuation. I would look at the front, the first page, and very often we have used Hastings as an example, and you come over and you look in the far right column; if Hastings was at $1.10, from increased valuation in the district, they got an additional $934,255. That means that that's counted as a resource and they need that much less state aid. If you go to the blue sheet and you will see that under this, Hastings is gaining $561,308.32. They originally, before we were discussing 149, were losing about I think 1.8 million. So you have to look at that, that they got about a million more in other resources, here they are getting $561,308.32. With this blue sheet, what we tried to do is keep it focused on 149. That's why if you look at the columns, the first column you see is System State Aid Certified, December 1, 1998, and the LB 149 Model is the next column, and then the difference. And so this printout is looking at the difference of if you do 149 and' if you don't do 149.

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Remembering those that have a negative would have had a negative anyway because... or generally, I should say generally because it is due to those resources that are reported in actual data. It's just that it would have been a year later. And it's important to remember, we made the decision on motor vehicle taxes. we have 8 months here. Eventually, there will be a year of motor vehicle taxes in, and so they may get some additional revenue, but we thought this was actual data, we wanted to stick to that, and if you look at those who have negative numbers, and then you go over and look at the System Motor Vehicle Tax Receipts, and you look at the valuation, the increases in valuation, it will give you a good Indication as to why that happened. And, as I said, it would happen to those districts anyway on motor vehicle taxes. It would only have been... it would have been a year later, and to a greater amount, because a year later you would have one year of motor vehicle tax, not simply 8 months. If you start at the beginning of the book under Student Numbers, there you have what happened to the cost groups, and you see that there was a reduction in the sparse groups, there was a slight reduction in the standard group. Why is that.;' That is because when we plugged In actual data, it shows that schools, indeed, were spending lees than what we were ... than the estimation. You go behind that and you see the Student Enrollments, and if you see a large, a significant number of students lost ... on the first page, I happened... I am going down the column, I happened to look at Alliance. They've lost 84 students. You take that times the cost group and remember that that's going to make an impact, because that is supposed to be what happens. If you lose students, you do not get as much state aid. The very same thing as you go down those columns and look at those schools who may have gained students. The very same thing, then they get increased aid.

PRESIDENT MAURSTAD: One minute.

SENATOR BOHLKE: You then go to the next, District Valuation, which I discussed with you, and remembering, it's important to look at that. The motor vehicle receipts, we've listed that separately behind that tab when you can go down on that, and I think the rest is self-explanatory. Now let me tell you right now across the hall in 2022, we will discuss this as long as necessary. Across the hall in 2022 is the Department of

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Education. You may take your notebook over, and if you have any questions that you want a further analysis than the numbers given you here, or an explanation that you aren't quite understanding, they are there and they are going to be there until seven o'clock tonight. They will also be there tomorrow and the next day. I have talked to the Speaker's Office, and looking at the time line on this, and working backwards from that April 1 date,

PRESIDENT MAURSTAD: Time.

SENATOR BOHLKE: ... we really need to come to a vote probably this week, but as Senator Quandahl says, we will not be doing that today. I want you to have time to absorb this and get the analysis. Thank you.

PRESIDENT MAURSTAD: The Chair recognizes Senator Coordsen for discussion on the bracket motion.

SENATOR. COORDSEN: Did Senator Bohlke wish any more time? I would yield my time to her. Thank you.

PRESIDENT MAURSTAD: Senator Bohlke.

SENATOR BOHLKE: Thank you, Senator Coordsen. It's very rare that I use ten minutes, my full time, and I wasn't aware that I was taking that much time, but I did want you to pay close attention to the fact of those individual district analyses. Many times when we've heard from school districts about how they, did in state aid, and you would have a superintendent call and be upset, you haven't been able to go to this page, and right now go right down the list and say, well, it looks to me like this is something you should be looking at in the district. And so I do think that the extra time that it took getting you this information was well worth it, and I hope that it is assistance to you. And so this is a different way of reporting it. If you want to know the breakdown before... of the analysis before 149, the department has that over in 2022, if you want to look at that rather than just the columns that are on the blue sheet. But in discussing how we should report this, it seemed important to the Education Committee that we keep it focused on 149, what it does, and what it doesn't do. I believe that we've had a

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great deal ... we've also discussed the time line before and the importance of getting this done for schools so that they will know how to make some important decisions in their district. I could go back and review for you why this happened. I think that you all are aware of that. As I said previously, it was our miss. Schools were certified the amount of aid. That aid went out, and when the doors opened this year, they had budgeted, they had hired staff, they began to spend that money. I had asked school districts to let me know the importance of the April I date, and I thought I had an excellent letter. I have tons of them, but one very good one from Crete School District, and they say, the passage of 149 is definitely extremely important to Crete Public Schools and every other school district in the state. Let me share with you what sequence of events is possible if we do not have an answer on the state aid issue by that date. We must notify teachers of any reduction in force by April 15. If we don't, the continuing contract clause guarantees they have a contract with us for the following year. So on April 1, we will have to be making plans on staffing for next year that would allow our budget to come in under the levy lid and a worse case scenario state aid figure. We will have to rif any positions that are questionable. We may rescind that rif later, but the teachers, and this is important, may have started looking for another job, and we may lose good teachers that we really need to keep. If we do not know the official results of the respin by April 1, we also may have to make rif decisions based on that. Rif notices lower morale and cause teachers that aren't in imminent danger of being riffed to look elsewhere, mainly out of Nebraska, for employment. Good teachers in hard to fill areas are the ones that may leave because they can find a job elsewhere. Crete lost a good teacher to Texas last year, partly because of uncertainty about school funding in Nebraska. Would you please share ... would you please also share with your colleagues that the best way to meet Governor Johanna' goal of stability...

PRESIDENT MAURSTAD: One minute.

SENATOR BOHLKE: ... in state aid to schools is by fixing the local effort rate as LB 149 requires. I can figure out ... I can figure our projected state aid well in advance of the certification date if I could predict that one number. That

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would give us a jump on budget planning which results in better decisions. I think that that is extremely important to understand. And so with that, I'm ready to answer any questions. Oh, legal counsel has told me the department will be here at eleven-thirty, not right now, and on the web site at noon, every school district will get the information you have today, and every school district and school board have been alerted to the fact that they can teleconference with the department this evening at seven-thirty. And that's open to the public. It's going to...it's going to be out at the studio,...

PRESIDENT MAURSTAD: Time.

SENATOR BOHLKE: ...and Bo it may not be easy to get there, but certainly we've gone to every length possible to communicate all this information with school districts across the state.

PRESIDENT MAURSTAD: Thank you, Senator Bohlke. For discussion on the bracket motion to LB 149, Senator Brown.

SENATOR BROWN: Mr. President and members of the Legislature, I appreciate how much work both the Education Committee and the Department of Education have done to get us data that hopefully is accurate and ... but I still have concerns that we are at March 8 and I would think that probably we have worked as hard as we possibly can this year, under the circumstances, with a bill pending to put the data together in a timely manner. And it still has, not left us with enough time to digest the information. I dutifully brought my notebook, read through the notebook over the weekend, and I think pretty much understand, as best I can, the information that was included in the notebook, and then I receive an e-mail that says, maybe there are some aspects in the notebook that aren't quite accurate and so maybe you need to ignore some of the aspects of it. And then we get this data at what I would consider certainly the eleventh hour and are expected to digest it. And so I am very sympathetic to Senator Quandahl's motion because I understand the seriousness that I think that he's taking this decision with and certainly the seriousness that I'm taking this decision with, that this is a bill that is going to make enormous changes; that the... fixing the problem that ... that we've been' referring to is just one piece of it. There are some other very

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substantive changes that are a part of this bill and we are being asked to make a decision on a very... on data that we received at the eleventh hour. And 1 still have some real concerns about that, and I think that we are going to need to focus a little bit on the time line, depending on what Senator Quandahl decides to do with this bracket motion, one way or the other. Because ... because I think that the fact that we are just now receiving data on March 8 in a year that I am sure that every resource was put to bear because this bill was pending, indicates to me that we are going to have some concerns for the future in having accurate data in the time line that's set forth in LB 149. Thank you.

PRESIDENT MAURSTAD: Thank you, Senator. For discussion on bracket motion of LB 149, Senator Wickersham.

SENATOR WICKERSHAM: Thank you, Mr. President. I'm sorry. I thought I was probably down the list a little bit. I'm handing out a calculation that I hope is not too complicated, but I wanted to illustrate something, and that is if you have, as the bill calls for and actually as current law provides, if you set the local effort yield rate at a level that is below the maximum levy, what effect does that have on a school district and then, what isn't illustrated here, of course, is what effect does that have on state aid? So what you see in four different examples is the calculation of a yield from the local effort rate and you will note, as you look at your printouts, that that can affect the amount of state-aid. The December 1 certification had a local effort rate of $1.08, and you'll see a calculation on this sheet at $1.08, so you'll see in that calculation the amount of tax that the aid formula thought a school district could access, that the aid formula thought the school district could access. Now you normally think that's okay. You've got a local effort rate of $1.08, you know the maximum levy is $1.10, so everything's okay, right? Wrong. That's not right, because the school district isn't able to access all of the valuation that is in the calculation of the local effort yield. That's at 100 percent of market for everything that isn't ag, and it's 80 percent for everything that is ag. But assessed valuations are typically about 94 percent for "nonag"...or 92 percent for "nonag" and 74 percent for everything that's ag. So you see the result down below when you apply the 74 percent factor to market

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value and the 92 percent factor to market value, and then multiply that times $1.10. The differences you get illustrate what happens, because of the interaction between the local rate, local effort rate, and adjusted valuations. An important component of 149 is a clarification of existing law concerning the point at which we set and how we set the amount of state aid that's necessary to produce a local effort yield rate of a dollar. Using the local effort yield rate of a dollar, in general, makes it possible for school districts to access the amount of dollars that we say they'll be able to access in the formula. Now, what does it mean in terms of state aid? And I just flipped through here and Senator Bohlke referenced the first school district that is in your white sheets that show a school district that's impacted. Down at the bottom there's a negative number of $370,211.49. Did the school district really lose that? No, they didn't really lose those dollars. That's simply the difference in the calculation of a local effort rate at $1.08 as opposed to a dollar. You can see that calculation on the little sheet that I've handed out for you. That's the effect there. But, again, does it mean the school district lost money? No, it just means the aid...

PRESIDENT MAURSTAD: One minute.

SENATOR WICKERSHAM: ... formula recognized they weren't going to be able to access all of those dollars, so the difference comes back to them as state aid if they're an equalization district. If they're an equalization district, the state aid formula will fill that negative number. All other things being equal, and Senator Bohlke cautioned you that everything else isn't equal, but all other things being equal, the state aid formula would fill that number. And the only reason the local effort rate was $1.08 in the last certification was because of the respin, and that was a $22 million issue that is also addressed in LB 149. The number that went over from the Fiscal Analyst to the Department of Education was slightly in excess of the number that you now see as the amount of state aid, because it didn't take into account that $22 million worth of respin. It's an important point, an important consideration in the debate, I think....

PRESIDENT MAURSTAD: Time.

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SENATOR WICKERSHAM: ... of 149.

PRESIDENT MAURSTAD: Thank you, Senator. For discussion on the bracket motion, Senator Beutler.

SENATOR BEUTLER: Mr. Lieutenant Governor, if Senator Coordsen would like to use my time to begin with, I would pass it along to him, since he gave up his time. You're okay? All right. I also passed out a sheet to you and probably by now you're completely inundated with sheets. This is a budget sheet that was passed out to you a little while ago, but as I understand the process to be to pull the motion eventually and to give you a chance to digest all of the information relevant to the decision, I wanted to pass out to you again the preliminary budget sheet that had been passed out to you earlier and point how...how I think the $22 million fits into our budget. It doesn't have an A bill, you might note, just for process purposes. That's because we have to pass this before the Appropriations Committee bills are passed. So this $22 million then just gets built into the mainline appropriations bill when that comes along to be passed. Therefore, it doesn't require and A bill like all the other ones that are passed after the mainline appropriations bills are passed. So you're not dealing with something that's an A bill. You're dealing with something that's a reduction ... what you'd call a reduction in revenue or a continuing appropriation, depending I suppose on how you wanted to characterize it. But you may recall that when we talked about Senator Brown's 3 percent resolution, we were talking about how much we wanted to spend overall in a budget, and we talked about 3 percent on the low side and what that would mean; whether we could have any A bills; we couldn't have any A bills given what the Appropriations Committee had spent already. And then you heard Senator Kristensen argue that perhaps we should do essentially what we've always been doing, kind of following personal income. If you look at the bottom of the sheet I passed out, you can see, what, one, two, three, four, five, six, seven, eight, or nine different scenarios. Looking over on the right-hand side, you can see all the way from 3.2 percent, total spending growth over this year and what that means in terms of A bills and in terms of monies available to reduce revenues if you didn't have A bills. In other words, there's money there

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that can be spent, but it can't be spent if you want to keep to, for example, 3.2 percent overall spending growth. Well, what I ... I had set out there for you one of the...one of the scenarios. I had... I'd kind of pencilled in a bracket there on the 3.5 percent. What if we focused eventually on 3.5 percent, which is kind of halfway between Senator Brown's suggestion and the maximum amount of money we could spend, which is all the way down here at 4 percent, if you wanted to take a middle ground? Well, what would happen then, you could still, at 3.5 percent, spend 15 million for A bills, you could still do that, but what will happen is that the amount of money in reserves or what you could use if you wanted to reduce revenues which, of course, affects your balance, you could use it for either purpose, that would be reduced by this $20 million. It's estimated to be closer to 20 million now, as I understand it, and not 22, so let's call it 20 million. That 20 million would reduce the amount available for revenue bills and reserves. So you'd still have the same amount in A bills, but you would have a smaller pot of money left over to assist you in future years or to deal with revenue reduction bills. Hopefully, we won't have many of those this year. So it would reduce from 50 million to 30 million that amount of money available as an additional cushion which you would not spend. So if you took...

PRESIDENT MAURSTAD: One minute.

SENATOR BEUTLER: ... 3.5 percent, you could choose to not spend $30 million that's there to be spent, discipline yourself to a 3.5 percent increase, and still have $15 million for A bills. So that's kind of how the 20 million in 149 fits in. it reduces ... it reduces the pot of money, but you can still get the 3.5 percent or so and have 15 million for A bills. I just wanted to point that out. Thank you.

PRESIDENT MAURSTAD: Thank you, Senator Beutler. For discussion on the bracket motion, Senator Bohlke.

SENATOR BOHLKE: Yes, Mr. President and members, listening to some of the discussion, I thought it was important to point out a couple of things. I was listening to Senator Brown say that she thought that this was too much to absorb. I want to reemphasize; in a short time, that we will obviously not be

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doing a vote today. If you remember, I pulled the bill off on General File in order to allow more time and at that point in time I said when we get to Select you'll be getting the numbers and we're going to try and give you all the analysis we can and have the department do the individual analysis, all the information that is possible, because there is a point then on Select File when we need to make a decision. Because, if you just follow through on how long it takes a bill to lay over after you get it to Final Reading, taking it to the Governor, the five days there, you work backwards on that time line and we need to take a vote, and I had said that on General File. Now, Senator Brown, if you would yield to a question, please.

PRESIDENT MAURSTAD: Senator Brown.

SENATOR BROWN: Yes.

SENATOR BOHLKE: Senator Brown, you said you had received an e-mail that said the data in the books may not be accurate. I wanted to be clear on the record you did not receive that e-mail from anyone in my office or anyone from the Department of Education.

SENATOR BROWN: No, I'll have to check who it was from.

SENATOR BOHLKE: Well, I'm not even asking you who it was from, but I think it's very important, that's a serious statement to be making, and everything that we have had from... this is information that schools turned in to the Department of Education right off of their AFR forms. That... I am not aware of anything that is not correct. So you may...

SENATOR BROWN: Okay.

SENATOR BOHLKE: ... check and we'd be happy to get back to whoever sent you that e-mail, but that certainly didn't come from our office or from the Department of Education. What we handed out in the notebooks last week is straight off the forms that schools fill out and turn in to the Department of Ed, and so I thought it was important to point that out. The other point that I had neglected to point out earlier is we have been talking about 22 million all along. When we plugged in the

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motor vehicle tax, that 22 million actually became about 19.5. So when we're looking at what we need to do, it's really about 19.5 million rather than 22, because, remember, we're putting in more resources off of motor vehicle. And so I had not pointed that out before and that would also be an important fact to realize. As I've said, at eleven-thirty, when you take your notebooks and look at it and if you have any questions going over across the hall, they will be here until seven tonight, all day tomorrow to answer any of your questions, and for the remainder of the week. I do not think at that point in time, if people have looked at their notebooks, familiarized themself with the information there, it's really pretty...in my... I hope that you find it easier the way we presented the information this time than other years. I think you can simply go to those tabs and then you only have two columns with the end result to look at. I'm not so sure that is too much to ask us all to absorb in coming to a decision if this is the right decision or not. That has been our goal, to make this as simple as possible for all of you and to keep the information before you in an organizational form that allows you to be able to look at those columns and real...and then flip through to those other tabs and see what may or may not have happened. And so, certainly, I think that...

PRESIDENT MAURSTAD: One minute.

SENATOR BOHLKE: ... the Education Committee has tried very hard not to rush things, have worked with you to make sure that you' have plenty of time to do the analysis. I'm sorry, did you say time?

PRESIDENT MAURSTAD: I said one minute.

SENATOR BOHLKE: Oh, okay. To do the analysis necessary as you make your final determination. And, once again, I think that your school districts have all received a letter telling them that they can do the teleconferencing tonight with the Department of Ed, that they can phone in all of their questions. They are there. it's all up on the web site for school districts. I don't know that we can do much more in getting the information out to you or to school districts and so... there will be a point in time, though, that we need to make a decision

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and we need to make a decision in order to allow schools to do the proper budgeting process that we expect of them. Thank you.

PRESIDENT MAURSTAD: Thank you, Senator. For discussion on the bracket motion, Senator Brown.

SENATOR BROWN: Mr. President, members of the Legislature, as I remember it, when we were on General File we were promised that we would have the information before the vote on Select File. I just assumed that that meant that we would have it more than just a few minutes before the vote on Select File. And I think that if we are looking at 149 and we are looking at a date of February 1 as the time in the future that we are going to certify and that we assume we are going to have accurate data as of that date, we are now at March 8 and we ... and we would assume that most of the resources of both the Education Committee and the Department of Education have been focused on assembling this information for us, that we should have been able to have it before today. And it troubles me as to what that means for the February 1 date that we... that is contained in LB 149 and whether we're ... whether we're going to have accurate data with which to certify at that time. And I think that we are, because we have the printouts now, we are focusing on the printouts and we are maybe not focusing as much as we need to on the underlying policy of LB 149. And so I appreciate that Senator Wickersham passed out some information and I wondered if he would yield to a couple questions about the information that he passed out.

PRESIDENT MAURSTAD: Senator Wickersham.

SENATOR WICKERSHAM: Yes.

SENATOR BROWN: Senator Wickersham, can you explain to me in the top portion, which talks about the yield from the local effort rate, the 80 percent and 100 percent figures, and then under the actual taxation you have 74 and 92 percent numbers?

SENATOR WICKERSHAM: Okay. Under the local effort rate, ag land is at 80 percent of market value and "nonag" property is at 100 percent of market value. That's a policy that we adopted in LB 1290 in 1995. That is, 149 doesn't change that at all. That

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was ... that's a ... kind of an old and stale policy decision now. Okay. That's at 100 per... that's as a comparison to 100 percent of market value. Actual taxes, however, are... they're based on assessed valuations and the range you see there, 74 and 92 percent, is the range that has been used by the Property Tax Administrator's Office and the TERC, in their processes., recognizing that it is actually impossible or impractical or other adjectives that you might want to use to have assessed values at 100 percent of market value, primarily because if you had assessed values at 100 percent of market value, you would have a large majority of your properties over 100 percent of market value in order to have the whole array of valuations come out at 100 percent. So they've set ...

SENATOR BROWN: Okay, under your ...

SENATOR WICKERSHAM: ... so they've set...so they, for assessed valuation purposes, they set 92 percent and 74 percent as the objectives. Both of those are 8 percent below the 100 percent objective.

SENATOR BROWN: Okay. Under your scenario, what about ... how does it play out for schools that are above or below the valuations that you have?

SENATOR WICKERSHAM: If ...

SENATOR BROWN: Schools which are located in counties ...

SENATOR WICKERSHAM: Okay.

SENATOR BROWN: ... that are above or below the averages.

SENATOR WICKERSHAM: If you have a school district with valuations that are less than the stan...

PRESIDENT MAURSTAD: One minute.

SENATOR WICKERSHAM: If you have a school district with valuations that are less than the standard, in other words, you have ag lands values that are 68 percent rather than 74 percent, their levy won't generate as much money.'

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SENATOR BROWN: And so is there anything about the formula that is going to reward?

SENATOR WICKERSHAM: No, the state aid formula does not make up for that "underassessment" at the local level and, in fact, that's the reason for the calculation of the local effort yield rate. That's calculated at the full values and that's done by the Department of Revenue separately. It's not dependent on local practices. The incentive is to have your local assessment practices come up to the state's objective of 72...or 74 and 92 percent. If you don't come up at least to that objective, you're not accessing the revenues that the formula would call for.

PRESIDENT MAURSTAD: Time. Senator Wickersham, you're recognized.

SENATOR WICKERSHAM: Well, Senator Brown, I don't know if I answered your questions, and maybe in a moment I'll give you the opportunity to ask a follow-up question if you wish. if you...do you wish to ask an additional question or... ? No. Okay. I think that it is important to, as Senator Brown I think suggested, to talk about the policy choices that are being made in 149, and I agree with her that that's what we should do. I don't agree with her when she asserts that you're going to have the information that Senator Bohlke passed out and then... and somehow in the next few minutes be required to vote. Well, first, there are a couple of things wrong with that statement. One, you can't be required to vote. If you don't want to vote, you'll put up amendments; you'll do as Senator Quandahl did, you'll put up another bracket motion. Anybody that knows how to use the rules and doesn't want to vote doesn't have to. And Senator Bohlke has said you're not going to have to anyway; that she doesn't want to take a vote until Wednesday or even a later date, I'm not sure what date she said, but you're clearly not going to be asked to vote today. I don't think that would be fair to you either. Wouldn't even be fair to me because I haven't had a chance to digest all of this. You're not going to be asked to vote today. I don't know where Senator Brown got that idea. And if you don't ... and, again, I would say that if you don't want to vote today, start filing amendments. Do as

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Senator Quandahl did and you won't have to vote today. Now the broader policy question, and at least one of them, and I think Senator Bohlke addressed it briefly, but I think it's as important as anything else. In the 149, while it won't bring absolute stability to the state aid formula, should, should enable school districts, maybe with a little bit more information, I know they would want more information, to predict what they will be able to receive under future calculations of state aid based on the principles that are in 149. Now, what are the principles in 149 that are important to that objective? One, moving the certification date to February 1, because that allows us to use actual numbers for the calculation of state aid. We won't have to use estimated numbers anymore. So a school district will be able to go back to their numbers, their numbers only, and begin to make an ... begin to make a calculation about the effect of changes in their district on the state aid formula. Estimated numbers are out; actual numbers are in. That should produce stability. In addition, 149 clarifies the way in which we are to calculate the amount of aid that goes into the formula, and that should help, because right now we have two separate calculations that are designed to produce roughly the same result but don't necessarily produce the same result. one of them is a calculation made by the Fiscal Analyst, and he calculates, or he or she, excuse me, calculates an amount of money -that would be necessary to fund the formula and produce local levies, local levies. Remember this difference between actual taxes, local levies and the local effort rate. He or she makes a calculation that puts amount of state aid into the formula necessary to push local levies ten cents under the maximum. That's the amount they give to the Department of Education by November 1. By December 1, the Department of Education takes that number plus the other data that they have and makes another calculation, and that's the actual amount of state aid to be distributed. And in that calculation the local effort rate can float between $1 and $1.10. That's the reason you saw it fluctuate up to $1.08 in the December 1 certification. That number went up...

PRESIDENT MAURSTAD: One minute.

SENATOR WICKERSHAM: ... solely because of the $22 million in the respin, and that's also eliminated so that we're not going to be

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respinning based on changes in local resources. We're only going to be respinning based on changes in numbers of students, other factors that should have been known. So I think that it will, 149 will, over time, produce greater stability and the Department of Education I think is working on a process to provide base information to school districts that they will then be able to use and analyze and be much ... have a ... be ... have a much greater capacity to estimate future state aid that their school district will be receiving, some things important to them, something I think that's important to you.

PRESIDENT MAURSTAD: Thank you, Senator Wickersham. Senator Jones, on the bracket motion.

SENATOR JONES: Mr. President and members of the body, this has been an interesting discussion this morning and I'm glad we have a little more time on it because this does take a little bit of time to decipher. But, again, we know that we're not going to vote on it this morning and ... but we do need to probably vote on it before this week's over with. I don't know when it's going to come back on the agenda. I just ... hopefully, it don't come back until at least Thursday, but we'll just have to see how that goes. But it's been real interesting to see how this blue sheet has been put together. I've been concerned that we probably might got ... they do this off of estimates again. I know that that's been the big concern because they have the ups and downs, and I was still concerned about the February 1, but I've been informed that now, after we get by this, this year, we will have ... they'll have a year to be working on this and hopefully that they will be working off of accurate figures from now on for sure. And if you look at the back side of your blue sheet that you have, in place of the 22 million it's 19,335,000. So it's a little less than we figured, and hopefully it will work. But what I do like about the way the situation is now, is that we are looking at actual figures now and any one that's got a minus on the blue sheet that you can turn over to the analysis and find your save school there and look, see why that was, and hopefully we can...if you got any more questions, we can go across the hall and get them answered. But this is coming more clear to me all the time how it's going to work, because right now, with the ups and down that we've had in past years, it's been pretty upsetting. And I've got 19 school systems in my

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district and I see that I've only got 3 of them with minuses and I think that's pretty good if they've got that leveled out that much. So, with all that being said, I want to support the bill and hopefully move it on forward, but I do think we need some more time and I ... I would not have voted this morning. I would have supported the bracket motion if they hadn't a wanted to try to vote this morning. Thank you for the information and this has been real helpful.

PRESIDENT MAURSTAD: Thank you, Senator Jones. Senator Brown.

SENATOR BROWN: Mr. President, members of the Legislature, I have one very simple question that I'm just going to sort of throw out because I don't want to pose it necessarily because I don't know that anyone is going to answer it. But if...if this is critical, if having this data is critical, if we are supposed to, in the future, have the data by February 1, why couldn't we have had the data this year some time last week and had the weekend to talk to people and process it? I appreciate that we have it in a different form. I'm not certain that that different form necessitates being a month and several days later than the date that in the future we are supposed to have accurate data that is based on actual expenses, actual costs, actual needs, and actual other revenues. I am more concerned about the part of LB 149 that sets up the process for the future that automatically has a calculation that is going to set the amount for state aid, because the reason that got us here, even though there were ... there were certain circumstances that may have been unique, the reason that got us here is that we had unique problems in the way that we calculated the amount. That was the genesis of the $22 million aspect of LB 149 and...but the other aspect of LB 149 is that we are going to give up our setting of the amount for state aid, our role in appropriating that amount, to a process that apparently is going to allow a computer to make that determination. And I'm not certain, based on what we've seen so far and the problems that we've seen and that we've had to respin everything, that I'm entirely comfortable with that process. Even if we... if we weren't talking about the... you know, we're talking all about stability for the school districts, and I think that that's important, but we also have to be responsible for the stability of the impact on our... our finances and how explicitly we are involved in that. And so I,

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think that we also need to be very explicit about what kind of ... if we are going to do this, this part of 149, which is to cede our appropriating responsibility to a process, then we also better have in place some auditing mechanism so that we can feel comfortable that in the future these kinds of problems are not going to continue and...and that we don't ever have a situation where we are ... where $600 million of our budget is just being automatically parcelled out and that we don't know that we are not having any of the problems that have led us to LB 149. if we are going to go on to this sort of autopilot system, then at least... and where we are not involved in the... the appropriation in an affirmative way, then we better make sure that we have a ...

PRESIDENT MAURSTAD: One minute.

SENATOR BROWN: ... process in...in response that allows us to examine it and make sure that we are not having the same kinds of problems that led us to ... need to respin this year. So I will be looking at and would love to have any kind of input that you might have in how we go about auditing this process if we choose to adopt the part of LB 149 that is the autopilot part which sets... sets the amount without a direct oversight by the Legislature. Thank you.

PRESIDENT MAURSTAD: Chair recognizes Senator Bohlke.

SENATOR BOHLKE: Yes, Mr. President, members, I was not going to turn my light on until I just heard some of the comments and thought I ... I ... it really is necessary to point out a correction. If those of you who heard Senator Brown say that this puts us on autopilot, we are on autopilot. Let me tell you and go ... walk through this carefully so you understand this, and if you will listen as to why we are on autopilot one more time, I will tell you. In November, currently, Tom Bergquist looks at the numbers and gives the number to the Department of Ed, the amount of money that will be certified to schools. If vie do LB 149, actually, by setting that local effort rate, that is more of an exact number. But he gives that to the Department of ,Ed in November and, Senator Brown, he gives that to them in November; December schools are certified their aid. It's done. It's over. They are certified their aid. Then the Governor is

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informed and the Appropriations Committee informed. That's the process that is currently in place and so, unless you come in and have a bill to change that, which no one has, that is the process that is in place today. And I don't know if I could say that... if I could say that three or four different ways to help you understand that, I'd be willing to do it, but we are on autopilot. Being on the Appropriations Committee, you are on autopilot. It is very... it's a very important point for you to understand. Schools are certified in December. That's over. It's done. And from that time forward, we are on autopilot. And so I think that it's critical for everyone here to understand that process. In November, the Department of Ed is told the number. In December, currently, with this bill that will move to February, but currently what has happened, in December that number is certified to schools. Following that, the Governor is given the number and the Appropriations Committee is given the number. Is that correct, Senator Wehrbein? You could just shake your head. Senator Wehrbein shakes his head "yes." That is the process that's in place. It's very important to understand that. The only change this bill would do is, rather than Tom Bergquist coming up with that number, is looking that that local effort rate is set in the formula. It is the same time frame and the same autopilot that Senator Brown was talking about. Other than that, Senator Brown, the other thing, there is an auditing process. it happens every year on the respin. That's what the respin is. That's the auditing process. And so, yes, schools are certified the amount of aid that they are going to get; a year-later there's an auditing process. Why could we not have this earlier? Normally, and I think others have said this, this takes a great deal of time. Next year, if we pass 149, Senator Brown, they will have an entire year to work on getting to the February 1 date. When they ... when the numbers come in from the school districts, when they file their reports, they then... and they get the information from the Revenue Department, they then will be able to begin the process, and I'm not sure actually if it's a full year, but they have a great deal of time to, and that's the amount of time they normally take. By asking them to do this in a short...that's why asking them to do this in the short time frame took some time in order for them to get that done. So I hope I've clarified those points for you and I ... I think it's important, when we hear information that may or may

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not be true, to do that. Thank you.

PRESIDENT MAURSTAD: Thank you, Senator. Senator Wickersham. Senator Wickersham waives off. To close on the bracket motion, Senator Quandahl.

SENATOR QUANDAHL: Yes, if I could, I don't know if Senator Bohlke or Senator Wickersham has anything further to say on the bill, it was my intention at this point to withdraw the bracket motion. I guess I would just ask one further question before I do withdraw the motion and that, when is...when is the information or when did the information that we received here today, when was that available? Would Senator Bohlke yield to a question?

PRESIDENT MAURSTAD: Senator Bohlke.

SENATOR BOHLKE: Yes.

SENATOR QUANDAHL: Just one question. The only question that I have is when was the ... when was the information or the sheets that we have here today, when was that available? Did that just get to you just yesterday?

SENATOR BOHLKE: Yesterday. We had a preliminary draft, Senator Quandahl, that I looked at and, actually, members of the Education Committee looked at on Friday, but it had "draft" all over it because they were doing the analysis that you have here to see, if anyone lost over $1,000, why. I mean we still ... I said I want this absolutely positively sure; I don't want any chance of putting out numbers that would be incorrect numbers; this is too important. And so they worked through till yesterday afternoon doing the pages that you got on the analysis of the school districts. If, going through that analysis, they would have found something that wasn't explained on those sheets, that would have been the indication, that was kind of like their audit on the system. That would have indicated that there was something wrong. Until that was complete, I didn't feel at all comfortable and then, since yesterday afternoon till today, no one else has seen that till all ... well, I did... I did have a meeting with the Governor this morning and presented him with the information.

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SENATOR QUANDAHL: Okay. Okay, that's fair. I would ... I would withdraw my bracket motion at this time.

PRESIDENT MAURSTAD: The motion is withdrawn. Mr. Clerk. Items for the record.

CLERK: Mr. President, new or reports. Revenue Committee reports LB 179 to General File with amendments; (LB) 706, General File with amendments; (LB) 132 indefinitely postponed, likewise with (LB) 145, (LB) 294, (LB) 301, (LB) 330, (LB) 429, (LB) 492, (LB) 5200 (LB) 645, (LB) 745, (LB) 766, (LB) 826. Judiciary Committee reports (LB) 151 to General File; (LB) 509, General File; (LB) 55, General File with amendments; (LB) 120, General File with amendments; and (LB) 175, General File with amendments.

I have hearing notice from Transportation Committee. Transportation Committee also reports (LB) 292 to General File; (LB) 504, General File; (LB) 864, General File; (LB) 310, General File with amendments. Senator Wickersham, amendments to (LB) 141 to be printed. Have a motion from Senator Schimek. (Re LB 455.)

And, finally, Mr. President, a new A bill, (LB) 298A, by Senator Schellpeper, (LB) 289A, excuse me. (Read by title for the first time.) (See pages 858-866 of the Legislative Journal.)

Mr. President, the next motion I have with respect to 149, Senator Brown would move to amend. Senator, AM0597. (See page 866 of the Legislative Journal.)

PRESIDENT MAURSTAD: Senator Brown, you're recognized to open on Amendment 597.

SENATOR BROWN: Mr. President, members of the Legislature, AM0597, very simply, changes the date from February 1 to March 1. Since we are at March 8 and just now receiving the data, and I am checking to make sure when ... when we receive from the school districts the actual data that is processed, but I believe that it's much shorter time period than a full year. But I do believe that under the circumstances with this bill

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pending there was every reason that this year we should have received the information ... been able to put the information together as quickly as possible. It would seem that under the circumstances there would be...that ... that every effort would be made to get it together as soon as possible, and we are past, well past the February 1 date. And I understand very clearly our reason for changing the date. It is something that we must do for the school districts so that they can plan for what they need to do in terms of contracts with teachers, as Senator Bohlke read the letter into the record this morning.. But I think that ... that it's clear from... from what's happened for this year that even February 1, moving from December to February, is not... is not sufficient. And so I believe that March 1, at least it gives a little bit more time for the information to be processed, but it still gives some time for the school districts to... to be able to calculate everything that they need to be able to analyze their situation before they have to get into the contract process. And I just believe that it's a small change but it's a change that under the circumstances, with what we've been able...what we've found out from not being able to have the information this year when I would think that there would have been every effort possible expended to get the information in as timely a manner as possible, we are still well-past the February 1 deadline, that I think that...that we ... we need to look at March 1 and make sure that we have a reasonable date that's reasonable both for our purposes, for the accuracy of the data, for the time line of how long it will take the Department of Education to do-their calculations, but also give sufficient time to the school districts for them to be able to use that data, use the information to make appropriate decisions on the local level. And, with that, I would close on the amendment... I would yield the rest of my time. Thank you.

PRESIDENT MAURSTAD: Thank you, Senator Brown. Senator Kristensen, on the Brown amendment.

SPEAKER KRISTENSEN: Thank you, Mr. President, members of the Legislature, and, Senator Brown, I'm not going to speak to your amendment, although I, at first glance, I'm not sure that works well. But I do want to take the opportunity because I know this morning we're going to have some short time here and Senator

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Brown's amendment is fairly straightforward and is not a complicated amendment. But, Senator Bohlke, I'd like to take this opportunity and just have you listen, and Senator Wehrbein as well. As I speak to members off the floor, I think that there's some feeling that this is a $22 million bill and that if you pass this you're going to spend $22 million more in state aid, and that's not the case and I want to try to put it in "non-Education Committee" language and somebody who, if I can understand it, anybody else can, I hope. But what we've got with 149 is last year, '98-99, we have $591 million that we're going to spend of state aid to schools in the form of state aid. We started issuing checks on $591 million. What happens is that in December, when we did the calculation, panic hits because it shows up on the printout that they're only going to get $574 million, and so all of a sudden everybody's going, I'm losing all this money. (LB) 149 comes in and says, well, we're going to get rid of this respin and we're going to change the date back a little bit. And what 149 really does is, once you do all this formula change and your printout shows that we're really spending... this is a $3 million change from what we spent last year; that the number now is going to be $594 million and not a $22 million change. And so, when people sit here and look at their printouts, I think there's a lot of confusion as to what actually the increase amount of money is. You're not talking about $22 million of expenditures; you're, in effect, talking about 3. Now, the changes in the printout, Senator Bohlke, I assume there's a lot of other reasons for change. Could be ... motor vehicles could be part of it, and a few occasions it's ... you've not going to take in a whole year of change of valuation because that's already been done. But the motor vehicles have been put back in, particularly into their ... their resources that you've roughly put in, well, I don't know what, $48 million of motor vehicles are going back into the resource side, and that's the reason the pie's being cut a little bit different. I assume what this amendment does, if you had to explain it to somebody what does 149 do, it eliminates redoing and coming up with last year's low number of $574 million, and that that's what caused all the panic. That would ... that would be eliminated through 149. The other part is, and I think Senator Brown talked about that a little bit, that I want to throw out there and I'm going to try to put it in my terms and I would hope that either Senator Wehrbein or.

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Senator Bohlke would correct me, when you talk about being on autopilot, that if you're going to have $591 million or $594 million or whatever that figure that gets certified out that we're actually going to send and what gets certified to people, we're going to cut checks. Those checks get paid over, what, a ten-month period of time. So there's ten checks that get sent out to the school districts. If the Appropriations Committee comes in and says, well, look, we don't want to spend $596 million, all we want to spend is ...

PRESIDENT MAURSTAD: One minute.

SPEAKER KRISTENSEN: ... $576 million, you'll still start spending... you'll send those checks out for $596 million on equal installments, except you're going to get to the end and all of a sudden there's not going to be any money in the bank to send that check out. Those checks don't get sent out, those last checks. And so what happens, the school district said, well, look, you told me you were going to give me $596 million and I didn't get my last check. That's where... that's where the real problem's going to happen here. And so if people want to talk about getting off of autopilot that was done with, oh, the number's 806, but 1175 did some of that as well that we did the other year, if I remember correctly. If you want to make changes in that, that's another issue. That... that... and I suppose you can do it on 149, but that's another entire issue. The ... what happens here is that they're either going to not get their money and go away, which I don't think...

PRESIDENT MAURSTAD: Time.

SPEAKER KRISTENSEN: ... will happen. They're going to sue us or go to the State Claims Board and say, that's what you should have given us.

PRESIDENT MAURSTAD: Thank you, Senator. For discussion on the Brown amendment, Senator Bohlke.

SENATOR BOHLKE: Yes, Mr. President and members, speaking to the amendment and, as Senator Kristensen said, it's a fairly straightforward one, may I remind you of this, two things. With this bill, you are going to certify aid February 1. If you

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change that to March 1, that's one month less that schools know about how to budget. Good budgeting is about having numbers as early as possible and being able to plug those in, you have now just taken away a month. Not only that, you now bump up against that rif date of April 1. And if you have schools not getting that amount of money till March 1, they may have already had their board meetings. As you know, they have to get those notices out by April 1, and so you really couldn't do this ... I mean April 15. You really couldn't do this unless you changed that rif date. It just ... it wouldn't work. And I don't know how serious Senator Brown is about this amendment, but that... those would be two things that would be negative and I don't know if she's going to vote on it, but that's why I would be voting red, is, one, you delay the amount of time that schools get the budgeting information that they need; and, two, you really bump them up against that April 15 rif date and, you know, that... that would have to be changed. I don't think either one of those would be positive. Thank you.

PRESIDENT MAURSTAD: Thank you, Senator. Senator Stuhr, you're recognized on the Brown amendment.

SENATOR STUHR: Thank you, Mr. President and members of the Legislature. I rise in opposition to Senator Brown's amendment for many of the same reasons that Senator Bohlke stated. We are, in LB 149, changing the date to February 1, which would give more time for school administrators, school boards, and teachers then to recognize and plan for budgeting process. -I did just also want to make a couple comments on LB 149 and the fact that we are looking at investing in the future of our state. We keep talking about funding. The students are our future. I believe Nebraskans are very proud of the quality education that they provide for our students. And if we look at some overall reasons on why does spending continually increase, I think that sometimes we forget that Nebraska is a very large state, it's very diversified. Our demograph...our demographics and the fact that some... some areas are requiring new schools, additional schools because of student increases, others are having to cut, and it's not that easy when you are losing students to immediately cut those funding and resources in one year. I think also there's been a lot of talk on the national level about student/teacher ratios. In Nebraska, we are proud

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of our student/teacher ratios and in some of our larger schools I know we're looking at even reducing the number of students per teacher. Also, as we look at our economy, our economy has been expanding and education and other service workers are looking at receiving their fair share of that growth, and it's particularly difficult and we've been alerted to the needs that might continually arise in education as far as teachers; that competition force of what they could start out a beginning salary In teaching compared to industry makes this whole area very, very difficult. So, again, getting back to the amendment, I oppose the amendment particularly for the budgeting concerns that it would create. Thank you.

PRESIDENT MAURSTAD: Think you, Senator. Senator Brown.

SENATOR BROWN: Mr. President, members of the Legislature, Senator Stuhr talked about the budgeting concerns and Senator Bohlke talked about school districts having one less month to plan, but let's remember what got us to the position that we're in of needing to have LB, 149. The AFRs, the annual financial reports, that come from the schools, come in at the end of November, and so by have ... by when we set the certification date till December 1, there was no time to process that information so we were using estimated Information. And so, therefore, we had to do the respin in order to incorporate the actual data from the school districts. I believe that for the purposes of budgeting, having accurate information is just as important as having enough time, possibly more important, and we would not be in the position that we're in with LB 149, at least with one aspect of LB 149, had it not ... had we not set the date, the certification date, to December 1 when we did not have enough time to process the actual financial data. I believe that it is in the best interest of school boards and school administrators that the information that we give them is accurate and I think that rather than looking at this amendment as one less month for them to use in their contract negotiations, in their planning, it's one more month for us to be more assured that we are ... what we are saying is going to actually be accurate. And it is ... it is going to be cutting it a little close for the school districts, but we will not, hopefully, in the future, if we adopt this amendment, have a situation like we have right now where we're having to go back and fix a problem that we

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have...we have admitted that was a problem in our system, a problem of not being able to, within the time periods that we had set for ourselves, be ... process the annual financial reports that came in. When Senator Bohlke said next year we will have a full year to process those, we will not have the actual data from the school districts any... at any different time next year than we did this year, which is at the end of November. So that nothing is going to change from this year to next In terms of the... of them having any more time to process, unless we adopt my amendment, and then we will have an extra month to work this data through. It will not be any bit different than the data that we are dealing with right now that we just received in our hands. We will have from November until either the 1st of February, which we've already missed the date, or, under my amendment, until the lot of March, which is the date that I think that we actually could aspire to, to have the data that we received this morning. Thank you.

PRESIDENT MAURSTAD: Thank you, Senator. Senator Kristensen, on the Brown amendment.

SPEAKER KRISTENSEN: Thank you, Mr. President, members of the Legislature. Senator Wehrbein, I don't know whether you have your light on or not, but I just wanted to visit with you a little bit about the last exchange or time I had of speaking.

PRESIDENT MAURSTAD: Senator Wehrbein.

SENATOR WEHRBEIN: Yes.

SPEAKER KRISTENSEN: Senator, I ... were you following my ... my trail through there a little bit about what actually, in terms of what we're increasing expenditures here, this bill doesn't have an A bill because we're talking about actually changing a figure in the mainline budget as to what we pay out in state aid, so at some point in time we're going to have to suspend the rules here...

SENATOR WEHRBEIN: Yes.

SPEAKER KRISTENSEN: ... to consider this prior to running the mainline budget across.

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SENATOR WEHRBEIN: Right. Yes.

SPEAKER KRISTENSEN: But ... and I suppose if we don't do that, we could put an A bill in and it will go that way. But the actual increase of expenditures from last year's budget to this year's, if we pass 149, is roughly $3 million. Is that a fair figure?

SENATOR WEHRBEIN: I think that's a fair figure. What you said earlier I considered fairly accurate, yes, within ... within the millions, where... it's give or take a couple hundred thousand, yes.

SPEAKER KRISTENSEN: Okay. And... and the other point that I want to visit with you and I'd like your opinion on is if at some point in time in this whole state aid debate, because we can get lost in the numbers very easily, I mean I know I can, maybe the rest of them could follow, but I can get lost in those numbers. But if you have the ultimate fight that comes down and says here's the amount that gets certified to the schools, let's assume 149 passes, but the Appropriations Committee feels that, look, we're in a ... we need to cut money, we're in a tight budget year. I'm talking maybe not this year but next year. A mechanism to do that is, if the Appropriations Committee or the floor adopts an Appropriations budget that would have, let's say, 10 million, 20 million less in state aid, there's no mechanism to recertify those numbers back to the school districts, is there, that I'm aware of? You're still going to have to write them checks based on what the certified numbers were in the fall.

SENATOR WEHRBEIN: That's right.

SPEAKER KRISTENSEN: And so...

SENATOR WEHRBEIN: The certified numbers, right.

SPEAKER KRISTENSEN: ...if we do anything less, you sort of have an Armageddon because you're forcing the school districts to either come and file a claim against us or a deficit appropriation, take us to court. At some point in time, and I guess I'm looking from a process point of view, don't you need a

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fail-safe that says that you would actually recalculate those numbers, recertify that, if we don't appropriate enough money to fill that in?

SENATOR WEHRBEIN: I'm not...

SPEAKER KRISTENSEN: Do you understand? Let's say that... let's say that we think there's ... we're short of money and we...

SENATOR WEHRBEIN: Right.

SPEAKER KRISTENSEN: ... we choose not to appropriate as much as what's certified. I mean that...Senator Bohlke talks about autopilot. Let's say that we try to flick the autopilot off and say we're just not going to put as much money in there. I don't ... we can't do that right now, as I read the current law.

SENATOR WEHRBEIN: If I'm following what you're saying, no, I...I don't see ... we...we... that's the reason for the certification process. Certification process means nothing if we don't meet those obligations.

SPEAKER KRISTENSEN: Right, and so if we want to do what some of the... I mean a lot of this is discussion off the microphone as well, is what ... what do we do if we don't want to spend that much money for state aid to schools and there, short of a statute change, there's nothing that we're going to do.

SENATOR WEHRBEIN: I would agree.

SPEAKER KRISTENSEN: Okay. And I think that's important for people to understand here as well, is that, you know, let's say at the bottom line and whenever this bill moves and gets on to Final Reading today, if it gets there, and we say, look, we're more concern...we think that this is the right thing to do; we like the idea of changing the respin; we like the idea ...

PRESIDENT MAURSTAD: One minute.

SPEAKER KRISTENSEN: ... of changing the date that we certify; but what we really don't like is we don't want to spend any more money. That's not available, short of a statute change, to do.

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And I want to make sure people are real clear now and I don't want to bog the bill down but, at the same time, I don't want people walking out of here with the misunderstanding that we can, at some point in time when we do these changes, that we can't reduce the amount of appropriations, and that's ... I mean I think that's...

SENATOR WEHRBEIN: I see.

SPEAKER KRISTENSEN: ... what you and I are trying to visit about here, is if you want to make that change we need to do that in the statute, whether it's on 149, whether that's on another bill, but you can't flick off the autopilot without it even today. I'm...

SENATOR WEHRBEIN: Yes.

SPEAKER KRISTENSEN: And I know my time is short and I would yield it back to the Chair.

PRESIDENT MAURSTAD: Thank you, Senator. Senator Wehrbein, you're recognized on the Brown amendment.

SENATOR WEHRBEIN: Yes, I would say, first of all, Mr. President, members of the body, that's been my understanding for a long time. We have the statute. If you're going to make a change in this, we have to change the statute. There has to be a bill introduced; wording has to be changed. Appropriations is simply... takes the certified number and that is what we appropriate. And so what has been stated up to now by Senator Kristensen I would consider accurate. I simply want to also comment on the amendment, getting back to Senator Brown's amendment. I believe February 1 is more realistic than March 1. I...my sense is that we can always wait longer for more accurate figures, and that is true in what ... a lot of things that we do. But sooner or later you have to make a decision. You have to have a number and it has to be something that those that follow, when we're setting policy, those that follows ... following our policy have to be ... have reliable numbers, at least as reliable as that vie can get them so that they can react. And I have not been on a, school board for many, many years, but I am in sympathy with the fact that they have to start making these

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planning decisions as early as practical. Actually, we set it back in December. We found out that wasn't as practical as it should be in terms of accuracy. So my understanding is February I is a realistic way to perhaps have a compromise, if you will, that the accuracy should be fairly assured, but it still gives those school districts a chance to react. It would appear to me that March 1 starts to get that lead time very close, and so, based on that, I think it's ... that February I is probably a more realistic number.

PRESIDENT MAURSTAD: Thank you, Senator. Senator Wickersham.

SENATOR WICKERSHAM: Thank you, Mr. President, members of the body. I rise in opposition to Senator Brown's amendment. I do not believe that moving the certification date to March I is a direction that we want to go. I also disagree that the February 1 date is not attainable with good accurate data. I think it is, even if it forces the Department of Education and some of the school districts to change their processes a little bit. And one of the changes that it might eventually force is the use of electronic filing for some of the information that currently comes into the Department of Education by paper. And then that has to be keyboarded in or punched in, whatever they do with it, and then it's finally data that they can use in their computers. If we made a change to an electronic filing system, and I think that's entirely possible, then you'd save that step. There are other steps that the department takes to verify data, check with school districts when things don't look right. You can't avoid those kind of things, but they should be able to do that on a reasonable basis by February 1 even, as I'm suggesting, if they have to make a few changes in their existing process. Those changes might be for the best anyway. But aside from whether or not the Department of Education can actually accomplish the February 1 certification, I would hope that members of the Appropriation Committee and I think other members of the Legislature would appreciate knowing what the state aid amount should be for a given year as early as possible in our legislative process, and I think that school districts across the state, as they're trying to make decisions about how to adjust to the total resources that are available to them, whether they're more or less than they were the prior year, need as much advance notice as they can get, because they've got to

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send out notices, if they're going to have to rif teachers, by April 15. And it is...those aren't easy decisions to make. You can't... and you can't plan in the abstract for them. Not only are they difficult human decisions to make, none of us like to tell people that they have to be discharged, but they're also difficult choices to make in terms of the program for the school and the overall educational opportunities that are going to be offered and how that fits into a generalized budget. I think we owe it to the people who work very hard on those school district boards, and the administrators who assist them, to give them as much time and opportunity as we possibly can within our process to allow them to make decisions that are going to be impacted by what we decide. I think that's only fair to them. And, if we can ... and February I allows the department to have its work done, allows us to obtain a number as early as possible in our legislative process, and gives as much notice as possible to the school boards and the school administrators about what the potential resources are going to be for their district for the next year. For those reasons, I would oppose Senator Brown's amendment and hope that you will also oppose it.

PRESIDENT MAURSTAD: Thank you, Senator Wickersham. Further discussion on the Brown amendment? Further discussion on the Brown amendment? Senator Brown, you're recognized to close.

SENATOR BROWN: Mr. President, I am very interested in the concept of some changes in the filing system as a way to possibly speed up the process, and if we could look at receiving the data before the end of November, then I might be a little bit more comfortable with February 1 as the date. But I would still say that there is one question that ... that looms for me as very serious, and that is, why was the February I date not attainable this year, this year, when there would be all the reason in the world with 149 there to have it be attainable? But under the circumstances and because we're not going to take a vote on this bill today, I would pull my amendment and reserve the right to refile it when we take the bill up again, because I want to explore a little bit more some of the ideas for changing how early the AFRs may come in. Thank you.

PRESIDENT MAURSTAD: The amendment is withdrawn. Mr. Clerk.

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CLERK: Mr. President, the next, motion I have with respect to LB 149 is by Senator Wickersham. Senator Wickersham would move to indefinitely postpone. Senator Bohlke, you have the option to lay the bill over, Senator.

SENATOR BOHLKE: Yes, Mister...

PRESIDENT MAURSTAD: Senator Bohlke.

SENATOR BOHLKE: Yes, I wish to lay it over.

PRESIDENT MAURSTAD: Thank you, Senator. The bill is laid over. Mr. Clerk.

CLERK: Mr. President, LB 86. Senator Smith, I have Enrollment and Review amendments on LB 86, Senator.

PRESIDENT MAURSTAD: Senator Smith.

SENATOR SMITH: Mr. President, I would move the adoption of the E & R amendments to LB 86.

PRESIDENT MAURSTAD: Question before us is the adoption of the E & R amendments to LB 86. Those in favor say aye. Opposed nay. The amendments are adopted.

CLERK: Senator Beutler, I have AM0662, Senator, in front of me. (See page 849 of the Legislative Journal.)

PRESIDENT MAURSTAD: Senator Beutler, to open on Amendment 662.

SENATOR BEUTLER: Mr. Lieutenant Governor, members of the Legislature, this is an amendment that Senator Wickersham and I have discussed and I think he's comfortable with, and it's also been discussed with the Auditor, and 1 wouldn't say that the Auditor is entirely comfortable but understanding what we're doing. The general thrust of 86 had to do with the Auditor's obligation to conduct certain kinds of audits, and the language of the bill stated or could be interpreted to state that the Auditor would no longer be required to do these audits. In other words, that under certain conditions described by the Auditor, the option could be chosen of not doing the audits.

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