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Another round on state aid for public schools

Over the course of the last three weeks, the Nebraska Legislature has engaged in more than 20 hours of floor debate on a legislative bill that deals in a significant way with distributing state financial aid to public school districts.

It isn't like this subject hasn't captured time and attention in past legislative sessions, because it has, on virtually an annual basis. Nonetheless, this year's primary focus, LB 545, has a high level of importance because it is tightly linked to the new state budget this Legislature must establish.

It's expected that when all is said and done LB 545, as amended, will be enacted. That's notwithstanding the fact that the bill has experienced a rough ride, especially on General File, the first stage of floor debate. Opponents of the Education Committee's proposal, mostly legislators representing the interests of the Omaha Public Schools, carried on a modest filibuster; enough so that after nearly 15 hours of debate, Sen. Greg Adams of York, who is chairman of the committee, attempted to invoke cloture to require a vote on advancing the bill. His motion needed 33 votes to prevail. It received just 30.

The failed cloture vote could have spelled doom for LB 545. Instead, in acknowledgment of the bill's importance in the bigger picture, it prompted more negotiation off the floor and eventually enough of a compromise to cause the bill to be returned to the agenda and then advanced to the second round of floor debate. That began May 11, the 76th day of the 90-day session. There was a push-back from legislators representing school districts that viewed themselves as losing under the initial compromise. It's mostly about the numbers. More state aid is better.

State financing for public elementary and secondary education is dollar-wise the largest component of the state budget. For the current fiscal year, which will end June 30, the state's expenditure is just about $840 million. As the financing formula now exists, that is, prior to any revision via LB 545, the number would grow by $295 million for the upcoming biennium. That's a budget buster, especially at this time when receipts are seriously lagging and the two most recent economic forecasts are alarming.

The foremost purpose of LB 545 is to revise the state-aid formula in a way that reduces the extent of growth; in other words, to decrease the amount of the increase.

The rather unique proposal from the Education Committee is to make a revision that results in an increase of only $234 million, because that amount matches up with what Nebraska is to receive from the Federal stimulus for discretionary spending on public K-12 education. The result would be an increase of about 11 percent for FY 2009-10, followed by an increase of about six percent for FY 2010-11, using Federal funds (and other narrowly dedicated revenue), but no additional General Funds.

Is this a great system, or what? Tough times call for unique responses.

The impact this approach might cause in the out years, FY 2011-12 and beyond, is already being referred to as the "cliff effect," apparently referring to the idea of facing a cliff, or perhaps falling off a cliff, when the federal stimulus expires and the state is faced with having to replace it. Future sustainability is definitely an issue.

From our perspective, the hero of the floor debate on LB 545 was Sen. Arnie Stuthman of Platte Center. While the state-aid formula is essentially a public school phenomenon, the level of spending - combining state and local taxes - affects all taxpayers. To his credit, Stuthman pointed to the cost savings that non-governmental schools and their patrons bring about for the overall system. The numbers are incredibly significant, but too much ignored.

There are approximately 38,500 Nebraska youngsters enrolled in these schools, nearly all of which are religiously affiliated with the obvious majority being Catholic schools. Using a modest figure of $7,500 as the average per-pupil cost for public schools statewide the existence of private-sector schools accounts for a tax savings of nearly $289 million per year. Using separate per-pupil cost averages for elementary and secondary levels would make the number higher yet. Even applying some fixed-cost theory would not reduce the number to something less than truly significant.

Stuthman pointed out how much more serious the fiscal shock would be if private-sector schools did not exist, and if a significant number of families did not enroll their children in these schools. Good for him! His point was relevant and quite on the mark. There is neither doubt nor question that taxpayers whose children attend other-than-public schools are among the best friends that all taxpayers have.

Lamentably, in the debate over education financing, most legislators seem to take for granted, or prefer to ignore, the existence of private-sector schools and the families who sacrifice to pay twice for education, both taxes and tuition. Moreover, not providing even a modest measure of either tax relief or enabling assistance for these families is a short-sighted view. Encouraging educational choice - such as this year's LB 67, which proposes modest tax credits for individuals and businesses that contribute to private-sector scholarship programs - constitutes an investment in an overall educational system.

Jim Cunningham is executive director of the Nebraska Catholic Conference, with headquarters in Lincoln.

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