2005: Adjusted State Aid

LB 198 (2005) provided for adjusted state aid payments to schools to reflect transfers of property due to annexation, dissolutions of Class I districts, and reorganizations of one or more Class I district. ;nbsp;In order to receive additional state aid under the bill, a school district from which property is being transferred must apply to NDE on or before August 20th preceding the first fiscal year for which the property will not be available for taxation. ;nbsp;"The provisions would apply whenever you have a Class I school district that dissolves or reorganizes and parcels of property do not become part of the school district in which the parcels were affiliated," said Senator Raikes during first-round consideration.¹

LB 198 requires the Department of Education, with the assistance of the Property Tax Administrator, to calculate the adjustment in state aid due to the property transfer and increase the state aid payment to such school system. ;nbsp;State aid payments are also reduced by an equal amount for local systems receiving valuation. ;nbsp;In order to insure the bill is revenue neutral, a portion of the state aid adjustments may be delayed for the applicant school systems to future years if receiving systems will not receive enough state aid in the initial year to offset the increases for the applicant districts.²

The measure allows school districts that lose valuation to receive state aid in the year in which the valuation is lost, rather than one year later. ;nbsp;Systems that gain taxable property will have a reduction in state aid in the year the school system has an increase in valuation pursuant to the acquisition of property, rather than a year later.