Representing You
TEEOSA is an acronym which stands for the Tax Equity and Educational Opportunities Support Act. The legislative bill that created TEEOSA was LB 1059 passed back in 1990. It was a controversial measure at the time and became law only because the state legislature acquired enough votes to override Gov. Kay Orr’s veto of it.
Although LB 1059 contained several stated objectives, three of those objectives stand out today as particularly noteworthy. First, TEEOSA was created to reduce the reliance on property taxes for school funding. Second, each school district was supposed to receive equalization money. Third, TEEOSA was supposed to create a greater level of equity or fairness among school districts. Because only a handful of school districts today receive equalization support, none of these three objectives is being met today.
On Nov. 20 Gov. Jim Pillen released a statement, calling the legislature to end TEEOSA altogether. Gov. Pillen’s statement was made following the disclosure of an error that was made in calculating the TEEOSA formula which resulted in the Omaha Public School District (OPS) receiving an additional $30 million in equalization aid this year, which will necessarily result in reduced aid for next year. The governor said in his statement, “Time and time again, I have said that we must do away with this complex formula that nobody understands and have the state fund schools while providing property tax relief.”
His comments came on the same day the legislature’s Education Committee held a public hearing on LR 189 which is an interim study on the TEEOSA formula. Sen. Myron Dorn of Adams, who introduced the legislative resolution for the interim study, reported in his opening remarks that only 60 school districts qualified to receive equalization aid last year compared to 150 school districts 20 years ago.
Statistics show that equalization aid for rural school districts has steadily declined since its peak in 2008. Jack Moles, the executive director of the Nebraska Rural Community Schools Association, pointed out in his testimony at the hearing how equalization aid has decreased over the years as agricultural land valuations have increased, which is an inherent problem built into the TEEOSA formula.
Moles used the Ainsworth School District as a prime example of the problem. That district received $2,420,000 in equalization aid in 2008, however, it lost $433,000 in aid the next year, which had to be made up in property taxes. The very next year, the school district lost another $256,000 in aid, which also had to be made up through property taxes. This pattern continued until 2015 when the district stopped receiving equalization aid altogether.
Coincidentally, on the same day Gov. Pillen released his statement and the legislature held its public hearing, the White House weighed in on educational outcomes. During the White House press briefing that day, Press Secretary Caroline Leavitt said math scores for American 13-year-olds are now the worst they’ve been in decades and U.S. Secretary of Education Linda McMahon reported how only three out of every 10 K-12 students in America can read proficiently at grade level. McMahon also pointed out that public education in America continued despite the recent shutdown of the federal government.
Educational outcomes for the Omaha Public School District are especially disturbing considering that the urban district has received more than $200 million in equalization aid each year for the past 10 years and this year received more than $320 million in aid. Despite steady increases in equalization aid, OPS has seen student performance steadily decline. For example, compared to the national average, math performance for OPS students in grades 3-8 steadily declined from 1 percent below the national average in 2015 to 3 percent below the national average in 2024. Similarly, reading proficiency fell from .5 percent below the national average in 2015 to 3 percent below the national average in 2024. What these statistics show is that equalization aid does not equate to the academic success of students.
Meanwhile, rural Nebraskans do a fine job of educating their children often at a lower cost. I agree with Gov. Pillen’s call to replace TEEOSA with something that is truly equal to all the districts in the state.
Loren Lippincott represents Legislative District 34 in the Nebraska State Senate. Read his column in the Nance County Journal.