Revenue caps cause struggle with MPS budget


New legislation is causing trouble for Milford Public Schools.

The district board of education will vote on its proposed budget later this month, but Superintendent Kevin Wingard said state caps on spending are making it difficult for the school to meet its basic needs.

Wingard will present the budget at a countywide joint public tax hearing at 7 p.m. Sept. 20 at the Seward Civic Center, 616 Bradford St. in Seward.

The joint hearing is a requirement for any taxing entity looking to raise its tax asking more than 2% from last year.

“Our levy’s going down, but our tax asking is increasing over the limit for that process,” Wingard said, because of increased property valuations.

The Board of Education will hold its own budget and tax hearings beginning at 6 p.m. on Wednesday, Sept. 27, at Milford Elementary.

The public is invited to attend both hearings to speak or ask questions related to the budget.


Proposed budget

MPS’ proposed budget includes a 95-cent levy across its General, Bond and Special Building funds. The levy is about 3 cents less than last year’s.

That means a property owner will pay about $950 per $100,000 in valuation, about $31 less than last year.

However, the district’s valuation increased 10.36%, with a total valuation of $792,030,552 for 2023-24. That’s about $74 million higher than last year.

Because of the valuation increase, MPS’ tax request will increase $482,225 to just over $7.5 million.

The district projects about $12.1 million in total spending this school year, an increase of $1.1 million over last year.

That includes about $2.5 million in state aid.


Equalization Aid

Unlike other school districts in Seward County, Milford’s budget will not see a major influx of foundation aid funding granted by Legislative Bill 583.

The bill passed in the 2023 legislative session after strong encouragement from Gov. Jim Pillen in an attempt to reform property taxes.

It awards school districts $1,500 in foundation aid per student.

Milford is one of 84 equalized districts in Nebraska, meaning it receives state equalization aid to help make up for its substantially low district valuation.

Milford is the largest district in its conference, but it’s second to last in valuation.

Wingard compared MPS, which educates 815 students, to Centennial Public Schools in Utica, another rural school with an enrollment of about 470 students.

“Our valuation in our district is around $700 million. Theirs is just over $1.6 billion. They’re double our valuation,” Wingard said.

The difference is largely because of irrigated farm land in the Centennial district. Centennial can generate much more property tax revenue with a much lower levy – theirs currently sits just above 50 cents.

“We’d have to double our levy so we’d both have the same amount coming in from our patrons,” Wingard said. “That’s where the equalization aid comes in.”

Because Milford is an equalized school district, it already receives state aid under the Tax Equity and Educational Opportunities Support Act, better known as the TEEOSA formula.

The foundation aid counts as revenue for MPS, so when plugged into the TEEOSA formula, it actually counts against the district’s state aid amount.

“For us, it’s a wash,” Wingard said.

For comparison, Seward Public Schools will receive $2.4 million in state aid this year because of the foundation aid. Last year, it received just $288,134 in state aid – a significant increase of just over $2.1 million.

Milford will receive only a $411,546 increase.

“You’re going to see the benefits for this for nonequalized vs equalized is very different,” Wingard said. “For some schools it’s a great infall of cash, but for us, it just didn’t compute that way. We did get an increase, but it isn’t enough to offset our expenses.”


At the Capitol

Milford Board of Education President Dave Welsch said LB 583 wasn’t a good fit for equalized districts like Milford.

He worked with Sen. Tom Brandt to introduce a bill what would restore equalization aid to all Nebraska school districts.

“Most urban schools are already equalized, so it would make some adjustments in the formula so they would get more aid,” Welsch said.

Foundation aid, he said, creates more equitable funding per student.

“With equalization aid, you’re equalizing property tax. Foundation aid does the opposite. It creates more disparity across the state,” Welsch said.

He pointed out that the first two words of the TEEOSA formula are “Tax Equity.”

“It’s property tax equity. That’s why that bill was created 33 years ago,” Welsch said.

Their proposed bill would bring levies in high-levy districts down more than those in low-levy districts.

“It would bring the levies closer across the state. Now the levies are going to be farther apart,” he said, pointing again to the differences between districts like Milford and Centennial, which have roughly a 40-cent difference in their levies.

“Foundation aid basically helped schools with low levies already. It didn’t help the schools with higher levies,” Welsch said.


Revenue caps

Legislators also passed a 3% cap on the amount a school district is allowed to increase its budget. This year, the school board could vote to override the 3% and ask for an additional 6%.

“We did do that, and we’re asking for the majority of that to balance our budget,” Wingard said.

He said the revenue caps are preventing MPS from having enough cash on hand to pay its bills.

The district postponed payment on some of its August bills for supplies and insurance, Wingard said, because it needed to ensure funding was available through September.

“In September, we get a large amount of our revenue from the county,” he said.

That’s if everything goes as planned. Wingard said there’s a fine line between making it work and a budget breakdown.

“If we didn’t receive our tax ask from the county or state aid doesn’t come in, we’ll have trouble paying