Facts About the Future Financial Situation for the PLSD!
As many of you may have heard through the news media, the financial situation of school districts in the state of Nebraska is not glowing.  Unfortunately, the PLSD is no exception.  Under the Learning Community (LC) law, the state aid and property tax are pooled together and redistributed to the 11 school districts in the LC.  This new distribution of money along with a poor economy, limit the amount of revenue available to school districts. 

Where do school districts get money to fund their budget?
There are two primary sources for revenue for school districts: state aid and property tax.  For the 11 LC school districts these revenue sources are pooled into one pot and redistributed.

Does the LC save money for the state?  
With the state aid being pooled for all of the 11 districts in the LC, the state saves just under $1 million in state aid.

Due to the LC, does the PLSD receive more money or less?
Less. With the LC, the PLSD is estimated to be receiving approximately $700,000 less this year than we would have if there was not a LC.  The exact amount will not be known until the assessed value is certified in mid August.

What is the “cliff effect” that is reported in the newspaper?
ARRA, otherwise known as the stimulus money, is currently being used by the state of Nebraska to supplant state aid.   As the state knew when they decided to fund state aid to schools by using the stimulus money, this money is going away for the 2011-2012 school year.  This will mean that to fund the state aid formula for 2011-2012 at the same level as 2010-2011, the state will have to come up with an additional $140 million.  Potentially, if the state does nothing to increase funding of state aid after the stimulus money is gone, the PLSD will lose $5 million. With no ability to raise local taxes sufficiently to cover this loss, what results is the “cliff effect!”

What impact does all of this have on the 2010-2011 PLSD budget?
For the 2010-11 school year, the budget will need to remain relatively flat.  The PLSD will not receive any more revenue for next year than we are currently receiving for the 2009-10 year. Any increase in a budgeted area will result in a cut from somewhere else in the budget.

What impact does all of this have on the 2011-2012 PLSD budget?
This will depend on what the state does to fund state aid.  If the state finds another revenue source to replace the federal money that is being used to fund state aid, the budget will probably remain flat.  If the state does not replace the money and decides to cut from state aid, the PLSD could lose as much as $5 million in state aid.

What does this mean for future budgets in the PLSD?
Money is going to be tight for the PLSD for the next few years.  Next year, we are planning for a flat budget.  The following year will depend on what the state decides to do to fund state aid to schools without the stimulus money.