Superintendent Press Release March 26, 2024
Dear Cedar Bluffs Families,
If you saw the Omaha World Herald last Friday, the legislation was patting themselves on their back regarding the passage of LB 388. The plan raises sales tax by 1 cent which would be directed to Nebraska schools although not evenly, to help reduce property taxes. The legislation in all their wisdom decided to use this new money to increase the student foundation aid from $1500 per student to $3000 per student. The problem with this is that foundation aid is counted as a resource which means schools that are equalized would receive an increase in foundation aid and decrease in equalization aid. All schools receive State Aid, but only some schools receive “equalization aid”. Equalization aid is created by the TEOSSA formula and although complex, the heart of it is Needs minus Resources equals Equalization Aid. So, in other words schools with more students but no way to create revenue receive more State Aid than other schools. For instances, Cedar Bluffs Public School has around 500 students (this drives the Needs side of the formula) and Cedar Bluffs has roughly $300 million in valuation to tax our local landowners (this drives the Resources side of the formula). So, the State determines that it costs roughly XX to educate 500 students (this is our need, although complex because there are many variables), and the Resource is calculated by multiplying the district’s valuation times $1.00 (again there are other variables, but valuation is the largest driver of the resource side of the TEOSSA formula). If you have more need than resources, you get more “equalization aid” as Cedar Bluffs does. A school like North Bend who has around 600 students has $1.2 billion in property valuation. They don’t need “equalization aid” to run their school. For every penny of their levy, they can produce roughly $120,000 where Cedar Bluffs for every penny can only produce $30,000.
I have seen that they want to amend LB388 so 40% of the foundation aid isn’t counted as a resource. If this is the case, then equalized districts will get some relief. Although with this new influx of money the State also passed more revenue caps. Right now, the revenue cap allows schools to increase expenditures by 3% each year when in 2023-2024 Blue Cross and Blue Shield raised their health insurance premiums by 7%. Because the State of Nebraska is in a COOP for insurance, every school in Nebraska (except a few who opt out through negotiating with their teacher union) must use Blue Cross and Blue Shield. So, keeping to 3% while insurance jumps 7% with most school allocating 85% of their budget to personnel is impossible. Not to mention there is a teacher shortage in the United States. South Dakota passed a law last year setting the “base” (minimum) pay for teacher at $45,000 and Iowa is considering a bill this year to set it at $50,000. Yet most schools in Nebraska are under $40,000 for teacher base pay. Understanding that teachers are on a salary schedule, where every year they can move down at 4% for years of service and/or horizontally at 4% for adding additional college credits some teachers are more greatly affected when the base salary is changed. For a teacher in their 20th year of teaching, with a master’s degree plus 27 credits the base pay is multiplied by 1.80 at Cedar Bluffs. Other schools have different salary schedules and structures, and all schools must negotiate this with their teacher union. So, if like Iowa, Nebraska legislation was to increase the base pay to $50,000 the teacher at 1.80 index at Cedar Bluffs school would be paid $90,000 as their base salary. And yet, schools are limited to 3% increase in expenditures. The State legislation just approved their State Budget for 2024 at an increase 3.1%, so they can’t even stay under 3%! The Nebraska legislation is never boring. Have a great weekend! Wildcat Pride!