State lawmakers have introduced a proposal (LB 497) to ensure the state of Nebraska provides resources to cover basic education costs for all of Nebraska’s K-12 public school students. Today, only 69 of Nebraska’s 244 school districts receive state equalization aid. The limited assistance has led to significant disparities in how Nebraska funds education for some students compared to others across the state.
“Good schools and quality education are important to our kids, our families, and our businesses. Because of its importance, the state has an obligation to support our children’s education, regardless of where they live or the school they attend. However, we have situations today where the state is paying for 100 percent of basic education funding for students in one school district, while covering less than one percent of the basic education costs in another. That level of disparity shouldn’t exist,” said Sen. Curt Friesen of Henderson, the bill’s sponsor.
Nebraska’s current K-12 funding system has not only led to inequity in education funding among students, but also in sources used to fund schools. While all K-12 schools draw on property taxes for funding, schools receiving little or no state equalization rely much more heavily on local property taxes for funding. The proposal would broaden the sources used to fund Nebraska’s K-12 schools to alleviate pressure on local property taxes.
“The way we’ve been funding schools has put tremendous pressure on property taxes. Roughly 60 percent of all property taxes collected in the state go to K-12 school funding. As a result, Nebraskans now pay some of the highest property tax bills in the country,” said Friesen.
The bill contains several provisions to address both the inequity in school funding and over reliance on property taxes, including:
- Guaranteeing every public school in Nebraska receives state support equal to 50 percent of basic education funding needs.
- Adjusting the local resources component of the state aid formula to provide more state equalization aid to individual school districts to replace property taxes.
- Modifying the aid formula so schools with large amounts of agricultural land would have a better chance of receiving equalization aid.
- Ensuring additional state aid to schools are used to replace local property taxes.
- Broadening the sources of state aid funding for use in replacing local property taxes, including elimination of some sales tax exemptions, capturing internet sales tax revenues, increases in cigarette and alcohol taxes, and elimination of the personal property tax exemption.
In addition to replacing property taxes with broadened revenues, the bill also contains a provision making a one-time allocation to help replenish the state’s cash reserve fund.
“This bill provides an overall framework from which we can replace parts of our school funding system that aren’t working for our students and taxpayers. To do that we’re broadening the sources we use to fund education and reducing our over reliance on property taxes. There is a better a way to fund K-12 public education than how we’re doing it today. This bill moves Nebraska in a better direction,” said Friesen, Nebraska Legislature District 34.
Several senators have co-sponsored the bill.
“Property tax relief is on the mind of nearly all of my constituents. It is my number one concern as a legislator, and it will continue to be until we have real relief. This mess was created over many years and there is no ‘easy fix’ for something this big. LB 497 provides a revenue stream that will help alleviate the immense burden placed upon our homeowners, business owners, and farmers and ranchers.”
Sen. Tom Brandt, Dist. 32
“I am proud to co-sponsor Sen. Friesen’s bill, LB 497. Obviously, the devil is in the details and we will all have to work together to get something that will attract the votes we need to pass property tax relief. I am glad Sen. Friesen is leading on this issue. I think his contribution to this effort is crucial.”
Sen. Tom Brewer, Dist. 43
“LB 497 is the result of a great collaborative effort by my colleagues and other interests who want to better balance the way we fund schools and provide property tax relief. I’m very excited about the possibilities of significant property tax reduction becoming a reality for Nebraskans.”
Sen. Dan Hughes, Dist. 44
“The Nebraska State Constitution says, ‘The Legislature shall provide for the free instruction in the common schools of this state of all persons between the ages of five and twenty-one years.’ When some school districts get less than one percent of their funding from the state, it is safe to say that the Legislature has been negligent in their duty to provide for free instruction in the common schools. Because only 69 of Nebraska’s 244 school districts receive state equalization aid, the time has come to restore a sense of equity and balance to the way we fund our schools. I co-signed LB 497 because the bill will restore this sense of fairness and balance to our public schools, and it will provide our farmers and ranchers with some much-needed property tax relief.”
Sen. Steve Erdman, Dist. 47
Other bill co-sponsors include Sen. Bruce Bostelman, Dist. 23, Sen. Mark Kolterman, Dist. 24, Sen. Myron Dorn, Dist. 30, and Sen. Steve Halloran, Dist. 33.