Tax Equity and Educational Opportunities Support Act (TEEOSA) aid to Nebraska’s 244 school districts will equal $1.08 billion in school year 2023-24, $9 million more than the aid distributed this school year according to figures released by the Nebraska Department of Education earlier this month. TEEOSA aid includes equalization aid, allocated income tax rebate, option funding, and other forms of aid, but does not include dollars distributed for special education or the property tax credit program. Omaha Public Schools and Lincoln Public Schools are the largest beneficiaries of TEEOSA aid receiving $290 million and $110 million, respectively. Together, the two schools will account for 37 percent of total aid received. McPherson County and Loup County Schools will receive the least amount of aid, $6,567 and $9,117, respectively. In total, 166 school districts are calculated to receive more TEEOSA aid in 2023-24 compared to this school year. Verdigre (323 percent), Hyannis (278 percent), and Ashland-Greenwood (245 percent) will see the largest percentage gains. Leyton (-89 percent), Harvard (-62 percent), and Raymond Central (-58 percent) will see the largest losses next year compared to this year.
Equalization aid comprises the largest portion of TEEOSA aid—81 percent. It is calculated by subtracting a district’s estimated needs from its local resources, primarily property taxes. Of the state’s 244 districts, 84 will receive equalization aid and 160 will not. “Equalized” schools account for 34 percent of the state’s districts, educate approximately 78 percent of the state’s students, and receive 93 percent of TEEOSA aid. For more information on the amount of TEEOSA aid individual school districts will receive in 2023-24 compared to 2022-23, click here: https://www.education.ne.gov/wp-content/uploads/2023/02/2324SA_SystemPaidToPaid.pdf
Of course, property taxes are the other major component to funding K-12 schools in Nebraska. For the current school year (2022-23), property taxes levied for general fund operating expenses equal $2.53 billion, an increase of 5.4 percent over the prior school year. General fund levies averaged $0.81 per $100 value across all school districts with a range in levies from $0.34 to $1.17. The bulk of school levies fall between $0.60 and $1.00 (Figure 1). Humphrey Schools had the lowest general fund levy and Arcadia had the highest.
Given that TEEOSA aid calculated for next school year is largely unchanged, and that taxable values are growing, property taxes paid to support schools are poised to increase in 2023-2024. However, this does not account for funding increases in the property tax credit program, or the income tax credits for taxes paid to schools or budgets set by local schools. Several bills are currently before the Nebraska Legislature to modify and distribute additional state aid and limit the growth in taxes levied by schools. The ultimate level of property taxes will be determined by decisions made by both state and local elected officials over the next few months.
Figure 1. School District General Fund Levies, 2022-23
Source: Nebraska Department of Education