Grants, Taxes, and School Funding

My Views Are My Own

By Lisa Schonhoff, Ed.S.

10/6/2026

Nearly two years into my four-year term on the State Board of Education, I often hear that the board lacks taxing authority. While that is true in a broad sense, our bylaws require members to vote on any expenditure exceeding $50,000. As a fiscal conservative, I view this oversight responsibility as vital to protecting taxpayer dollars.

The justification for spending more money will always exist. Nebraska currently invests over $5 billion in education from federal, state, and local tax sources, pushing per-pupil spending past $19,000 per year. Yet, despite these rising costs, literacy and math proficiency rates have reached historic lows. Today, fewer than 60 percent of Nebraska students meet reading and math standards on the NSCAS (Nebraska Student Centered Assessment System), and fewer than 50 percent reach proficiency on the ACT. We must be strategic in how we spend tax dollars.

The state budget is provided via a complicated formula called TEEOSA (Tax Equity and Educational Opportunities Support Act).  The formula “determines how more than $1 billion in state support is divided each year, and it sits at the center of one of the Legislature’s most persistent policy debates: how to pay for public schools while easing the burden on property taxpayers.”  

Schools also receive approximately 60% of your property tax bill, which is calculated through a specific formula involving both your property valuation and the mill levy rate. It’s important to notice how your property valuations and mill levy rate work together to provide schools with funding.  While you may see the individual mill levy rate decrease on your tax statement during reassessment years, they typically don't drop enough to offset a massive double-digit percentage increase in your home's market value. As a result, the total tax collection still rises.

Local Tax Rate = Total Tax Levy ​/ Total Assessed Value of the Community

One of the responsibilities of the state board of education is to determine which federal grants to accept.  Currently, schools in Nebraska receive an average of $2,000 per pupil in federal tax dollars.  As a board member, I often hear that turning down federal grants is leaving money on the table for other states.  This thought process fails to acknowledge the dependency that is created when expensive programs are created.  In short, accepting federal dollars often creates additional costs that aren’t covered by the grant.

During our October meeting, the board discussed the 5-year Rural Health Transformation Grant for nearly $60 million, pitched as a way to provide rural school districts with healthy food. Historically, we've seen school food change dramatically; scratch kitchens began disappearing in the 1950s and were largely replaced with processed foods by the 1990s. As a parent, I know my kids love getting sugary cereal and donuts at school whenever they can.  My initial reaction to the grant was overwhelmingly positive; every child across the state deserves access to healthy food. However, the catch is that out of an $11.5 million annual investment over five years, a significant portion goes to outside organizations for their administrative costs, including social media advertising, websites, and staff training. While these aren’t entirely without merit, it would be negligent not to ask, is this sustainable? What happens to the local tax burden when the federal dollars run out?  To address this, the board compromised on an amendment shortening the grant review to one year instead of five. We also added a stipulation that next year, the list of outside organizations must be streamlined so that the majority of those dollars go directly to the schools and the food itself.

The State Board of Education also had an opportunity to visit Scottsbluff Public Schools.  During our second-grade literacy observations, educators presented some excellent teaching strategies.  It was wonderful to see students with physical books and pencils instead of screens and keyboards.  The school district recently purchased Magnetic Literacy for K-5th grade at $102,678.98 with the CLSD grant allocation.  When walking through classrooms, I noticed that the materials included grammar, word work, writing, and reading.  I was informed that comprehension is being supplemented.  I was glad to hear their curriculum expert stress the importance of instruction over program.  Scottsbluff appears to be using its grant dollars effectively. I look forward to watching its literacy proficiency rates grow.

Photo Credit: Current Fiscal Year Budget