Legislators advance school aid changes, but LB 1331 will not happen unless funds can be found

State Sen. Lou Ann Linehan, along with members of the Pillen administration, gave a recent briefing to state legislators on Gov. Jim Pillen’s property tax relief plan. The graphic shows how it is expected to reduce property tax levies in the state’s school districts. (Paul Hammel/Nebraska Examiner)

LINCOLN — State lawmakers advanced the second part of Gov. Jim Pillen’s property tax reduction plan on Wednesday, but its massive increase in state aid won’t happen unless funding can be found for the hoped-for $1 billion shift.

Legislative Bill 1331 would increase per-pupil “foundation aid” from the current $1,500 to $3,000, funding the hike by a combination of existing state tax credits, increases in sales taxes and elimination of some tax exemptions.

The goal is to significantly increase state funding of K-12 education. Because of caps on school districts’ revenues, that would force down property taxes by an estimated 27.5%.

Funding took a hit Tuesday

But the bill funding the increased state aid, LB 388, took a hit Tuesday when sponsors agreed to pull out the major funding mechanism for the property tax plan — a 1 cent increase in the state sales tax. Doing that takes away about $206 million in funding.

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