ALL MEMBERS-CALL TO ACTION! LB 1106 

ACTION ALERT: Earlier in the legislative session LB974 was introduced as a property relief tax bill. The statement of intent can be found on the Nebraska Legislature’s website under bill search. LB 974 was a proposal developed by the Revenue Committee chaired by Senator Lou Ann Linehan. It was not supported by any of the state education lobby and did not receive unanimous support for advancement to General File. 

The bill was debated on general file for three hours without a vote taken. Under the rules for debate a bill that has been debated for three hours and not voted on cannot be placed back on the agenda unless the sponsoring Senator can guarantee to the speaker that they have 33 votes to break cloture. 

This week the Revenue Committee advanced LB1106 which was originally written as a bill to clean up language in the state sales tax statutes. LB 974 was amended into LB1106 with some minor changes. Again, the committee did not unanimously agree on advancing LB 1106. 

Some minor changes were made to the bill, but it still will be problematic for Nebraska’s public-school funding if it is passed. 

• LB 1106 provides $520 million for state aid for public K-12 schools over the next three years. There are concerns regarding whether the state can sustain that level of funding given the ups and downs of state tax revenue and the potential Covid 19 pandemic. Historically, state funding has been reduced when revenues decrease or there is an emergency. This happened during the last economic recession. 
• The plan reduces option enrollment aid which is sent to a school district when a student enrolls in that district as an option to the district in which the student resides. Currently $10,000 per student is sent to the option district. LB 1106 drops it to $8000 per year in the second year of enrollment and $6730 in year three. This is a burden for school districts with a high number of option students. 
• The proposed budget lid on school spending drops from 2.5% to 2% under 1106. 
• LB 1106 cuts in half the special building fund levy over a four-year period, from 12 cents to 6 cents. 
• Foundation state aid would be sent to each district on a per-pupil basis beginning with $703 per student in year one and increasing to $2341 in year three. Remember that the state has historically cut state aid (foundation aid in 1106). 
• The bill would reduce property tax rates as follows: Ag land would be reduced from 75% of actual value to 55%. Residential and commercial property rates would be reduced from 100% of actual value to 87%. 
• Some transition aid is provided for one year based for school districts impacted by the proposed changes. 

Please contact your state senator ASAP and respectfully urge them to oppose LB 1106. The education community has concerns that this plan is not financially sustainable for the state and the hands of local boards of education are tied when state aid is reduced by the proposed lids.