Nancy Hicks, Lincoln Journal Star
March 19, 2009

There’s a fight brewing over state aid to public schools — particularly over how to use about $234 million for education from the stimulus funding.

The Appropriation Committee’s preliminary budget now earmarks about $100 million in general fund tax dollars for additional state aid to schools the next two budget years.

That’s about a 4.5 percent increase each year, far less than schools were expecting under the state aid formula.

One group of senators wants to use the $234 million in federal funds for state aid. This would increase state aid about 9.9 percent the first year and 7.5 percent the second year.

The stimulus money would replace the $100 million in tax dollars, giving schools more state aid and allowing senators to use the $100 million for other state services.

But it would mean the state would have to continue this funding into the future, because of federal stimulus requirements. Senators who seem to be leaning this way include the chairmen of the Education and Appropriations committees, Sens. Greg Adams and Lavon Heidemann.

Another group of senators wants to keep state aid low — using the $100 million in state tax dollars. Then they would send the $234 million as grants to schools, to be used for one-time spending, like capital construction, computers or vehicles.

That would assure the federal money is used for “stimulus,” not to replace traditional state funding. It would also keep the state’s future obligation for state aid low. Appropriate Committee members Sens. Jeremy Nordquist and Heath Mello, both Democrats, appear to be leaning this way.

Nebraska gets to decide how to use the federal stimulus money because the state did not have to cut state aid to schools in the past few years.

States are required to first make up for previous cuts to schools before they can use the money for any grant-type funding, under the federal stimulus law.