Nebraska could boost K-12 school aid to lower property taxes

Nebraska News

LINCOLN, Neb. (AP) — Nebraska lawmakers who pledged to lower property taxes are getting ready to try again with a proposal that would boost state aid for K-12 public schools while restricting the districts’ taxing power.

The tentative proposal, which has generated strong opposition from educators, would closely resemble one that lawmakers considered earlier this year. Its sponsors said they’re still working to address school officials’ biggest concerns.

“There’s a lot that could trip us up, but I think we’re headed in the right direction,” said Sen. Lou Ann Linehan, chairwoman of the Legislature’s Revenue Committee.

Linehan said committee members have met almost weekly since June and consulted with Gov. Pete Ricketts. She said she hopes to have a new bill ready for legislative debate by Dec. 15, several weeks before the 2020 session begins.

Nebraska public schools consume the largest share of local property taxes that have risen sharply over the last decade, drawing complaints from farmers, ranchers and some homeowners throughout the state.

The proposal would guarantee funding for all public schools, including rural districts that currently don’t qualify for state equalization aid because they have so few students and are surrounded by valuable farmland that isn’t taxed at the highest possible rate. Agricultural groups say it’s unfair for farmers to shoulder the burden because farm incomes are down and many operations are struggling.

School officials said they’re most concerned that state officials won’t keep their promise to provide a long-term funding boost for schools in exchange for restricting their taxing authority.

Some larger districts say the increases they would get under the proposal would still be a net loss in revenue per student because their enrollments are growing so fast. Those schools also tend to be more diverse, with many low-income, special needs and non-English-speaking students.

“We’ve got to make sure those kids have the same opportunity as any other student in the state,” said Kyle Fairbairn, executive director of the Greater Nebraska Schools Association, a coalition of 24 of the state’s largest districts.

Fairbairn said it’s unclear how lawmakers will find the money to pay for additional school aid. Earlier this year, lawmakers talked about eliminating sales tax exemptions and increasing Nebraska’s sales tax to raise money, but the idea faced strong opposition from the governor.

Linehan said she understands school officials’ concerns about whether the state aid will be sustainable, and legislators are working to address them. But she said it would be “really a bad idea” to do nothing about property taxes this coming year because farmers and homeowners are feeling the pinch.

Supporters say the measure would ease the burden on homeowners and farmers while fulfilling the state’s constitutional obligation to pay for K-12 public education.

“It’s good policy, and in the long term, it’s the way we should be doing things,” said Sen. Mike Groene, a key architect of the plan.

Groene said Nebraska relies far too heavily on property taxes to pay for schools, and providing more state money is “the most equitable and fair way to fix the problem.”

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