LINCOLN- A proposal that would have funneled millions in additional state funds to rural schools was shot down Tuesday by the Legislature. The bill fell two votes short of what is needed to advance. Sen. Curt Friesen, the introducer of the bill, said the measure would provide extra state aid that would escalate to $130 million after three years to dozens of rural school districts that currently receive little to no "equalization" aid.

Under current statute, school districts receive "equalization" aid from the state when financial needs exceed resources in a district. Prices for farm and ranch property have risen sharply, which forces school districts to no longer qualify for equalization aid because their resources (land) are sufficient via property taxes. Friesen said the current formula only allows for 84 out of the 244 districts to receive any aid-- most of which are urban.

LB454 would adopt the School Property Tax Stabilization Act and change the valuation of agricultural land, or "unequalized" school districts that do not receive aid would split $65 million in year one, $95 million in year two, and $130 million in year three. This would also give rural taxpayers a property tax decrease due to increased funding.

Senators questioned how the state would afford this, saying its distribution of state funds would be challenged in court. Sen. Lou Ann Linehan, Revenue Committee chairwoman said that all areas of the state deserve property tax relief and that the answer to the issue is more complicated than increasing funding for rural schools.

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