2000-2004: Introduction

Nebraska's post "9-11" economy in 2002 found the Legislature scrambling to address one of the worst revenue shortfalls in the history of the state.  The question was less if but howstate aid would be reduced to help balance the state's biennium budget.

One year later, in 2003, the economic situation in Nebraska had not improved.  The Legislature was once again searching for alternatives to address the state's revenue shortfall.  It was then the unthinkable became a legitimate item of discussion:  increase the maximum school levy limitation, at least for temporary purposes.  The result would be a decrease in state appropriations to fund the state aid formula, a reduction in the state's budget deficit, and a shift of funding responsibility to local school districts.

The Legislature had proposed and passed legislation within two consecutive sessions to implement a mechanism for across-the-board reductions in formula need calculations, provide a relief valve through a levy exclusion, increase the levy for schools, and reduce the schools' spending authority.  The efforts were met with vetoes and subsequent veto overrides.  All this would change in the 2004 Session.

By 2004 there were some positive signs of economic recovery, but there were still pressing state budget issues to address.  The Legislature once again set out to reduce costs to the state through a variety of means.  But the general feeling was that public schools had already contributed sufficiently to the cause so as to avoid any new reductions and funding shifts.  That is not to say, however, that existing reductions and shifts could not be extended.  And, in fact, this is what the Legislature chose to do.