LIBA Remarks on LPS Proposed Budget for 2014 – 23 July 2013

Lincoln Public Schools (LPS) will receive a little over $97 million dollars from Nebraska State Aid which is an increase of approximately $13.8 million dollars over last year.  In addition, property valuations in Lincoln should result in an approximate increase of $3,566,592 in property tax receipts over last year.[i]

These increases will allow LPS to accommodate the District’s growth by adding teachers and supplies.  In addition, LPS will have the opportunity to fund expenses that have been deferred due to the difficult budget cycles experienced in 2009 to 2011.

The Lincoln Independent Business Association (LIBA) would like to thank the Board of Education and LPS staff for increasing transparency in accounting for expenses like printing costs and security radio maintenance contracts by assigning them a line item in the budget.  These are recurring expenses and by identifying them with a line item LPS clearly represents the expense and any future increases.

LIBA does, however, feel compelled to address two budget items.  First, the $250,000 allocated for Strategic Planning on top of the $250,000 budgeted last year for the same purpose.  We question the need to apportion an additional $250,000 toward reestablishing priorities previously identified through an extensive strategic planning process.

The second budget item that should be eliminated is $500,000 funding for Community Learning Centers.  Lea Ann Johnson, Director of the Community Learning Centers, met with the LIBA School Liaison Committee and indicated that they have enough cash reserve to cover all CLC costs for the 2013/2014 school year.  Thus, the CLCs do not need funds this year and Lincoln families may benefit more from reduction in property taxes.

According to the LCF/CLC Data Snapshot dated 06/17/13, 66% of students who participated in Lincoln’s CLCs for more than 30 days during the 2012/2013 school year were on free and reduced lunch.  Property taxes significantly impact the cost of housing therefore a decrease in property taxes could have a greater overall impact on the families of this 66%.

Finally, LIBA ask the Board to exercise caution. Personnel costs are LPS’ largest expense and one that increases most years. In 2012 these costs increased 2.5% and in 2013 1.89%; the LPS budget increased by $7.1 million and $5.5 million respectively. Though small percentages, these increases represent large dollar amounts. LPS is at its maximum levy lid of $1.05 and is therefore dependent on the notoriously fickle state aid formula to fund any necessary budget increases. Recently the Education Committee of the Nebraska Legislature met to reexamine the school aid system and indicated a potential overhaul. The Chairperson of the committee, Senator Sullivan, went so far as to state that the committee was, to the extent possible, looking at a “clean slate.”[ii] With these changes on the horizon LIBA urges LPS to exercise caution and not depend exclusively on state aid; ensuring that current expenditures remain sustainable in the coming years.  We believe the top funding priority must focus on educating children in the classroom.

 

In furtherance of maintaining district flexibility, LIBA would encourage this Board to reexamine the proposed budget in order to lower the property tax levy.  At a minimum removing the identified $1 million from the proposed budget will maintain budget flexibility in future years in order to continue focusing on the education of children in the classroom.



[i] LPS Budget Presentation to LIBA, Liz Standish, July 2, 2013

[ii] “Lawmakers eye clean slate for overhaul of school aid;” Kevin O’Hanlon; Lincoln Journal Star; 19 June 2013; http://journalstar.com/legislature/lawmakers-eye-clean-slate-for-overhaul-of-school-aid/article_b2feb08d-3f6d-52a0-8d4a-fa577179be20.html