Legislature advances school finance reforms

April 4, 2023, midnight ·

Nebraska Capitol (Photo by Fred Knapp, Nebraska Public Media News)
Nebraska Capitol (Photo by Fred Knapp, Nebraska Public Media News)

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Governor Jim Pillen’s package of tax and school finance changes moved ahead in the Legislature Tuesday, despite rumblings that it might have to change.

Tuesday’s debate concerned the school finance portion of Pillen’s package. The bill would use record state revenues to increase state school aid, especially to rural schools, to hold down property taxes.

The increase would be just over $300 million, about a 30 percent increase. Tuesday, Sen. Tom Brandt of Plymouth proposed going even further, with a plan he said would cost another $70 million.

Sen. Wendy DeBoer of Bennington supported the plan, which she said could reduce differences in property taxes between districts.

“We now find ourselves in a situation where there are some school districts where your property tax levy for schools is in the 40 cent range -- 46 cents something like that -- and in other places it's $1.05 and up,” DeBoer said.

Sen. Tom Briese of Albion opposed the amendment, saying it could force senators to reject other parts of the package, such as child care tax credits.

“We have a negotiated package here, and it's time to respect that package,” Briese said.

DeBoer said just because there’s a package of bills, that didn’t mean they can’t be changed.

“I think we ought to be able to talk about what makes these packages a little better. Maybe somebody has a good idea,” she said.

Sen. Lou Ann Linehan of Elkhorn opposed the amendment. Linehand objected to the difference between how the amendment would treat rural and urban property. It would lower ag land assessments from 75 to 42 percent of market value, Meanwhile, urban assessments would only be lowered from 96 percent to 86 percent of market. Linehan said that disadvantaged urban areas.

“We’re only going to drop them down 10 percent? We’re going to drop ag down 33 percent? I don’t think that’s fair,” Linehan said.

Sen. Mike Jacobson of North Platte said that additional school aid for rural Nebraska was why he supported the amendment. Jacobson said Nebraska schools rely too heavily on property taxes.

“Nebraska is ranked 49th in terms of state aid to public schools. But that doesn't mean that we spend at 49th. We're in the 20s when it comes to amount of spending. So the difference between what the state provides, and the spending, is coming from our property taxes,” Jacobson said.

Sen. Brian Hardin of Gering opposed the amendment, saying the Legislature needs to stick with bills in the package in order to deal with property taxes. Hardin said people in his area pay property taxes that are four times higher than in neighboring Wyoming.

“It too often results in decisions that friends and neighbors of mine are making right now. They're moving away from Nebraska to Wyoming because they cannot afford to continue to live in the home whose mortgage they paid off years ago. They point out that they still put aside as much monthly for their property taxes as they once put aside for the mortgage payments. It has a net effect of feeling like you never own it. And it has a net effect of moving away,” Hardin said.

Sen. Steve Halloran of Hastings expressed frustration the proposed amendment would make the already-complicated school aid formula even more complicated.

“Here we are trying to make it more complicated, while we should be burning it up. We should be starting over. It shouldn’t be that complicated. Whatever happened to the KISS method: ‘Keep it simple,

Stupid’? Right? Or to be more politically correct or nicer, ‘Keep it straight and simple.’ We don’t do that here. Why? Because we don’t want people to understand what the hell we’re doing,” Halloran said.

Senators voted 29-17 against the amendment. They also rejected an amendment that would have provided free school meals to every student in the state. They then advanced the bill on a vote of 39-3

Sen. Justin Wayne said the school finance package still needs to be changed to give more aid to school districts like Omaha that have a high percentage of students in poverty.

“Nothing against the negotiated package, but I wasn't at the table,” Wayne said.

Sen. Lou Ann Linehan said she agrees that more aid should be given to impoverished districts. Those changes could be proposed between now and when the bill comes up for second-round debate.