All right, Senator Adams, a longtime York educator and chair of the unicameral Education Committee, did not so much speak today as he gesticulated emphatically, hammering his point home about how those of us in the schooling business need to be especially mindful of the fact that 'The Cliff Effect' is coming. He spoke to Superintendents today at ESU 6 in Milford.
For the uninitiated, the Cliff Effect is the appropriately ominous phrase for what happens in state aid to education in Nebraska (and elsewhere) when the federal stimulus dollars have disappeared and the state lacks the revenue to replace those lost dollars back to schools. It's coming - in fact, it's just around the corner.
It's not actually true that all the stimulus money is gone next year. The feds passed another multi-million dollar package on the EduJobs bill that was designed to save teacher jobs. That money will come to NE in the form of another $58 million. Sadly, 58 million sounds like a lot of dinero but in the scope of a 660 mill to one billion dollar shortfall in state tax revenues, it's really more like a band-aid on a massive hemorrhage. On top of that, the state has already made it clear to us that whatever we see in this will just be considered part of our state aid for 2011-12. EduJobs money is not 'extra' dollars for districts.
Adams told us that the Education Committee has three aims in this session: continue to make state aid work within the equalization formula, get to the target # of dollars available for state aid (he declined to say what he thought that would be), and "do it fairly." In this case, "fairly" is a relative term - it has nasty connotations because it is not going to be "fair" as in "everybody gets their share" but as in "everybody gets to taste the pain."
At Norris, we have $990,000 or over 14% of our current state aid through ARRA stimulus dollars this year. That is gone next year. On top of that, you factor in ARRA SPED dollars (IDEA) outside of that, and you are talking about 20% of our state aid that is tied up in federal stimulus money. Taking that away with no replacement revenue and you are talking about the "cliff" because it's going to be steep, and it's going to be hard.
Senator Adams' point was hard to argue. You can't make something out of nothing. NE will not be able to fund state aid at the full levels for the next biennium due to the negative impact of the recession on state tax proceeds. He told superintendents gathered today, "There is going to be a reduction in state aid." He said it twice, then three times for emphasis.
I commend Senator Adams for his candor. As he said, "I want to be a friend to k-12 education," but other areas like Corrections, State Patrol, Department of Roads, courts - all must be paid for through state tax dollars. It's slim times we're facing.
At Norris, we will try to conserve costs this year in order to enhance cash reserve status for next year and better weather the shortfall. Unfortunately, that may not be enough. There may be drastic cuts looming in our future, but if we are facing that scenario, many other districts in our state will also be facing that grim possibility. Let me help you through a little simple math to understand. With 856 million in valuation, we kick about 85K into our General Fund for each penny we move up on the levy. Running all the way from 95 to 99 improves our position relative to next year while allowing us to absorb the costs that predictably increase each year (insurance, salary schedule movement, additional $ to the teacher base). But you can take 85K X 10 and still not make up what we are going to lose in state aid next year. So, we need to hold onto whatever resources we can this year to carry more reserves into next year and then. . . well, we need to brace ourselves. If you thought the Big Shot free-fall ride at the Lancaster County Superfair was a wild ride, you'll definitely want to strap in for this one.
The good Senator said that there will be more to talk about come October or November. Then the State revenue forecasting board will have its latest round of tax receipts to review and can make some projections (they've been pretty accurate in the past).
I thank the Norris District patrons for their unyielding support of maintaining top quality programs and your trust in our Board. We will work together to continue to provide the resources in programs and personnel necessary to ensure Norris remains one of the top districts in the state. In case you didn't notice - we ranked in the Top 15 out of 250+ districts on the state reading test.