Omaha Public Schools Grapple with State Aid Shortfall and Budget Adjustments
Omaha Public Schools are facing a significant financial challenge due to a $50.6 million reduction in state aid, prompting school leaders and staff to make difficult budgetary decisions. This shortfall is a result of a previous overpayment error identified by the Nebraska Department of Education, affecting three school districts, including Omaha.
Omaha Public Schools (OPS) received the largest overpayment, amounting to $30.5 million. As a corrective measure, the Nebraska Department of Education will reduce the state aid to Omaha and the other affected districts this year. Consequently, OPS will operate with $50.6 million less in state aid for this school year. Initially, the district had estimated a larger budget impact of approximately $61 million for the following school year.
Despite the financial setback, OPS is introducing a proposed budget that includes a modest overall increase of $10 million, representing a 1.18% rise. Shane Rhian, the district’s chief financial officer, explained during a community meeting that the majority of this increase is allocated for staff salary raises.
“We feel it’s important to continue to invest in our staff as they work with our students to help them all achieve academically and socially,” Rhian stated.
In a show of solidarity, OPS staff, including teachers, agreed to accept smaller pay raises to help mitigate the impact of the state aid shortfall. Jane Erdenberger, OPS school board president, expressed her appreciation for this gesture, stating, “I’m a former teacher, and I know how seriously our teachers take their mission. It is a job of love.”
Additionally, the district plans to zero out the levy request on the building fund for the year and utilize $27.5 million from reserves. Previously, the district had considered raising the tax levy to the maximum $1.05 per $100 valuation, an increase of about eight cents, to counter the financial gap. However, the final tax levy will be determined after the certified property valuations are received on August 20.
“We know this will be a burden on our property owners within the district, but we have to ask them to help continue and increase their support for our district, and recognize that a levy that’s consistent with what we’ve generally had over the last 30 years is an appropriate way to continue with a modest increase in the budget,” Rhian noted.
The proposed budget increase will also cover transportation costs due to rising fuel and maintenance expenses, enhanced special education services, and utilities. Furthermore, OPS is seeking to provide bus passes for students to use the city system, following the discontinuation of private funding for the program.
Community members will have further opportunities to engage with district leaders on the proposed budget during presentations scheduled for July 23 and July 25. More details about these events can be found on the OPS website.
