Economic Tidbits

More State Dollars Heading to Schools

State aid to Nebraska school systems distributed through the Tax Equity and Educational Opportunities Support Act (TEEOSA) will equal $1.16 billion for school year 2024-25, up $83 million from this school year according to the Nebraska Department of Education. 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. Beginning with school year 2024-25, it also includes per student foundation aid of $1,500. The foundation aid was part of the school funding and property tax relief package passed by the Legislature in 2023.

Equalization aid in the past has comprised the largest portion of TEEOSA aid. For example, in this school year, equalization aid amounted to $876 million and accounted for 81 percent of total TEEOSA aid. Equalization aid is determined by subtracting a school system’s estimated needs from its local resources, primarily property taxes. As a result, many school systems did not receive equalization aid. Of the state’s 244 districts, 84 received equalization aid and 160 did not this school year. The inclusion of foundation aid changes the calculation. Foundation aid is considered a resource in TEEOSA, in effect, reducing equalization aid. Thus, equalization aid’s share of total aid distributed in 2024-25 will drop. For the coming year, it amounts to $501 million, or 43 percent of the total. Foundation aid, on the other hand, amounts to $468 million and accounts for 40 percent of the total. Rural schools, who in the past did not receive equalization aid, will receive additional aid because of the foundation aid.

Omaha Public Schools and Lincoln Public Schools will remain the largest beneficiaries of state aid receiving $317 million and $73 million, respectively. Together, the two schools will receive 33 percent of total aid, down from 37 percent this school year. McPherson County and Loup County Schools will receive the least amount of aid, $104,000 and $132,000, respectively. But because of foundation aid, TEEOSA aid will be up well over 1,000 percent next year compared to this school year. Aid will be less in 2024-25 for 38 school systems likely due to a slow or lack of growth in needs or a rapid growth in property valuation.

An increase in the state reimbursement of special education costs was also included in the school funding and property tax relief package. The change, though, was made outside the TEEOSA formula and isn’t reflected in the TEEOSA aid figures. For more information on TEEOSA aid school systems will receive in 2024-25, click here.

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