NINETY-FIRST LEGISLATURE, SECOND SESSION

INTRODUCER'S STATEMENT OF INTENT

LB 1059

SENATOR WITHEM, Chairperson

Committee on EDUCATION

The following constitute the reasons for this bill and the purposes which are sought to be accomplished thereby:

Legislative Bill 1059 is a school finance reform bill which was developed from the work of the Nebraska School Finance Review Commission. The Commission was created by the Legislature and impaneled by the Governor in 1988. It studied school finance for over eighteen months with a focus on reducing the burden on property tax for the support of schools and establishment of a distribution formula which would assure more equity for both students and taxpayers. The Commission examined how income could be made part of school finance in order to broaden the tax base for school support and to broaden the definition of school district "wealth" beyond property tax values. The provisions of this bill closely reflects the recommendations of the Commission and includes:

1. Dedication of 20% of state income receipts for support of the public schools with 20% of all individual income receipts returned to the school district where such tax payments originated.

2. Increase in the level of state support for schools to 45% of the aggregate operational costs of the schools in order to effectuate a 15% reduction in aggregate property taxes which will be levied (or a 20% reduction in aggregate property taxes which will be levied for schools).

3. Establishment of a new equalization formula for distribution of state aid in order to assure that all schools have the fiscal ability to provide for the needs of students taking into consideration the income wealth of school districts in addition to property wealth and other accessible resources.

4. Implementation of effective, yet flexible limitations on school district budget growth.

5. Funding of the new school finance plan on an ongoing and sustainable basis from appropriate increases in the

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state sales, and income tax as determined necessary by the Legislature.

Legislative Bill 1059 would implement these recommendations and accomplish a comprehensive reform of school finance for Nebraska.

Date: January 23, 1990

SENATOR RON WITHEM, Chair

For the Committee on Education