Big schools oppose property tax plan

Beginning of LB974, the property tax replacement plan
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January 17, 2020 - 5:26pm

A plan to cut local school property taxes by increasing state aid is running into resistance from some schools who question if the promised replacement money will be there.


The idea, proposed by members of the Legislature’s Revenue Committee and endorsed in principle by Gov. Pete Ricketts, is to use about half a billion state tax dollars – largely from sales and income taxes – to replace local property tax dollars over the next three years. That’s projected to cut the amount of property taxes needed for schools – the largest single user of property taxes – by up to 15 percent.

The plan is made possible because state tax revenues are coming in above projections. Revenues have fallen short of projections about half the time in recent decades. But Sen. Lou Ann Linehan, chair of the Revenue Committee, has said officials are confident there will continue to be enough revenue to sustain the plan.

 Kyle Fairbairn of the Greater Nebraska Schools Association, which represents 24 of the state’s largest districts, said Friday that group opposes the plan. “You’re one recession away from blowing this thing up. And the only place they’ve got to get it back is to say ‘We’re going to take it from equalized school districts,’” he said. “Equalized”  districts tend to be urban districts that receive state aid to make up for a lack of property they can tax.

Many rural districts have lots of valuable property. But that largely belongs to farmers, who’ve been caught between increased property values on the one hand and lower crop prices on the other in the last decade.

Jack Moles, executive director of the Nebraska Rural Community Schools Association, which represents about 184 of those mostly smaller rural districts, says that group hasn’t yet decided whether to support the plan.

A public hearing on the proposal will be held Wednesday starting at 1:30 in room 1524 of the Capitol. It will be livestreamed on netnebraska.org

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