Rural-Urban Funding Gap Grows in Nebraska

Last Updated: May 27, 2009

This article appeared in the May 2009 Rural Policy Matters.

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State funding formula changes in Nebraska will reduce state aid to rural districts while urban districts will see increases in the coming year.
Most rural districts have already experienced a reduction in state funding as a result of changes to the formula made last year. Those losses are compounded in many small rural districts by decreases in state aid linked to declining enrollment.
Now state lawmakers have limited overall state funding increases in response to receiving federal stimulus money. Legislators justify the move as necessary given the current financial climate. But urban districts lobbied to keep intact the “averaging adjustment,” a mechanism in the state formula that increases funding for the 26 largest districts in the state. As a result, those districts will get more state funding while rural districts will receive less.
Many rural legislators expressed opposition to the two-year plan, but they lacked the votes to break an urban-led filibuster. In the end, many rural legislators agreed to the changes with an understanding that the plan will be reworked when the two years are completed.
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