Sides weigh in on plan to fight high property taxes by limiting school spending


February 10th, 2016

Nebraska Legislature's Education Committee hears property tax views (Photo by Fred Knapp, NET News)

Nebraska Legislature’s Education Committee hears property tax views (Photo by Fred Knapp, NET News)

Supporters applauded Gov. Pete Ricketts’ proposal to combat property taxes by holding down school spending, while opponents warned it could force damaging cuts to education.

Ricketts’ plan was introduced for him by Education Committee Chairwoman Kate Sullivan.

It would limit school spending increases to 2.5 percent per year plus student growth, include retirement expenses within levy limits, limit cash reserves and carryover budget authority to 5 percent of annual spending, and require capital spending projects be approved by school district voters.

Sen. Adam Morfeld of Lincoln asked Ricketts whether local school board members shouldn’t make those decisions, since they are accountable to local voters. Ricketts replied “While we don’t collect the property taxes, we do set the rules. And our constituents, which are the same constituents as all these school board members as well, are clearly asking for property tax relief.”

The governor was followed by a series of supporters of his plan like Mary Lou Block, who farms near Gothenburg. “Reining in spending is incredibly important,” Block said, adding that her taxes increased 20 percent last year and 36.5 percent this year.

Glade Smith, a farmer from Cozad, also supported the bill. However, he added that simply trying to reduce the growth of property taxes, as the bill attempts to do, “may only slow the imminent demise of Nebraska farm families.”

Sen. David Schnoor of Scribner said there would not be a simple solution. “There’s a balance that we have to make here and it’s not that simple. It’s not just saying ‘We’re going to cut property taxes by 50 percent. ‘Cause there’re still bills that have to be paid,” Schnoor said.

Smith predicted dire results if current trends continue, including the absorption of family farms into corporations that farm 50,000 acres, depopulation of the countryside and local businesses, and a lack of students to fill “these costly schools.”

But people involved in running those schools said the belt-tightening Ricketts is calling for could hurt education. Linda Richards of Ralston, speaking for the Nebraska Association of School Boards, said including retirement contributions within levy limits would cost almost $500,000, the cost of paying 10 teachers.

York schools Superintendent Mike Lucas objected to the idea of requiring a vote of the people for certain capital expenses, like mold abatement. “it’s a problem of timeliness,” Lucas said, adding that if mold were discovered today, children could remain exposed to it for three months while voter approval was sought.

After listening to supporters and opponents of the plan for several hours, Schnoor asked one testifier “What’s your suggestion? ’Cause really, I haven’t heard any suggestions from anybody. It’s just ‘They’re (property taxes) are too high,’ and It’s not our fault.’”

The person who happened to be testifying at the time, Tiffany Joekel of the Open Sky Policy Institute, said overall school spending has increased only 3.5 percent on average over the last 10 years. “Trying to tighten down school spending is not going to be the answer, Joekel said. Instead, she suggested the problem was the small share of school funding that comes from the state, compared to the share that comes from local property taxes. To get at that, that will probably require new revenues,” she added.

Joekel went on to mention proposals to increase income taxes, expand sales taxes on services, and raise cigarette taxes to substitute for school property taxes.

The Education Committee will now decide what to do with the property tax proposal.

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