Nebraska education maintains reliance on local property taxes

Tuesday, August 26, 2014

There were few surprises in a study released Monday about Nebraska's educational funding system, but that doesn't make them any less remarkable.

In 1990, Nebraska ranked 49th nationally in state aid to K-12 education.

Now, many years and many legislative efforts later, Nebraska ranks ... 49th nationally in Fiscal 2012, the latest year for which figures are available.

According to the OpenSky Policy Institute report, "Investing in Our Future: An Overview of Nebraska's Education Funding System," the heavy reliance on property taxes and relatively low state support creates taxing inequities between property-rich and property-poor districts, which still range from 43 cents per $100 valuation to $1.20, nearly triple the rate.

That means some school districts with the lowest property wealth have the highest tax rates in order to improve per-pupil spending. Because the state aid formula relies heavily on local property values, urban school districts need more state aid even though they tend to have higher property tax rates.

Of more concern in rural Nebraska is the loss of state aid because of increasing agricultural land values.

However, the high prices for corn and other commodities that drove those land valuations higher have since evaporated, meaning agricultural producers are seeing more of their income being taken up by increasing property taxes.

The OpenSky study poses some questions:

* How can Nebraska create an education finance system that fosters quality, fairness and equity when some schools have four times as much property value per student as other schools?

* Should the state assume a larger role in K-12 finance and, in effect, reduce property tax reliance?

* Or is a more fundamental revision of the school funding system needed?

* For example, is property value an appropriate measure of community resources in today's economy, or is it time to look at determining the wealth of a school district based on the income of its residents or some other measures?

The problem is, what are the alternatives to using property taxes. Sales and income taxes? Some other sort of tax? Each is accompanied by its own set of problems as well as advantages.

Regardless the source of funding, education, like all other services we have turned over to government, must be made as efficient and effective as possible.

Read the OpenSky report here:


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