School Districts And Property Taxes

By Gordon HopkinsNebraska Governor Jim Pillen held a press conference on Monday, December 4, 2023, to tout recent changes to school funding, which is an important element of his overall goal of lowering property taxes, but was also of those school districts that opted to override a three percent ‘soft cap.’According to Pillen, 162 of Nebraska’s 244 school districts overrode the three percent ‘soft cap.’The governor said, “We have countless, countless Nebraskans who have worked their whole life to pay for their homes and have them paid for living on a fixed income and property taxes. So, we have to fix that. We have to have some transformative, bold, courageous moves to be able to take that on and still do a great job of educating our children.”To that end, the governor signed a bill in May of this year that increased the amount of relief granted under the Property Tax Credit Act. The bill also established an annual cap on how much school districts can increase property tax requests. Governor Pillen said, “We’ve called it a ‘soft cap,’ that the school districts, 70 to 75 percent, depending on the number of school board members, could vote to override that.”Pillen said, “We have to do better. The hardcore reality is in the great, big picture, we’re bringing $324 million of state aid and, yet, overall our property taxes went up $85 million.”“Overriding the three percent cap would be the exception to the rule. We didn’t dream that number up. We got that number from superintendents that represented all school districts in our working group,” said the governor. “If we can’t get that corrected, I’ll be an advocate for a hard cap.”FJN reached out to local school districts to get their reaction to the governor’s statements.Fairbury Public SchoolsSean Molloy, Superintendent of Fairbury Public Schools, told FJN, “Fairbury Public Schools was able to lower their property tax asking for the 2023-24 budget year by $250,125.00, which is in line with Governor Pillen’s priority of reducing property taxes.” 2022-23 Total Tax asking: $11,843,434.00 (1.007576 total levy) 2023-24 Total Tax asking: $11,593,309.00 (0.916592 total levy)“The ‘soft’ cap still allows for local control. Per a super-majority vote, boards of education can vote to exceed the base growth percentage. A ‘hard’ cap would lessen local control and no longer give boards of education the ability to exceed the base growth percentage if deemed necessary.”Molloy added, “I’m thankful that the community of Fairbury understands the importance of providing a great education for students. Going forward, Fairbury Public Schools is committed to staying fiscally responsible.”Meridian Public SchoolsSuperintendents are supportive of the governor’s goals of reducing property tax while still providing to education. Randy Kort, Superintendent of Merdian Public Schools, said, “I appreciate Governor Pillen’s interest and support for education. In my 10 years as a superintendent I feel he is truly invested and supports education in Nebraska. I took away the message of working together, meaning the state senators, school districts and Governor’s office to help relieve property tax in Nebraska. I also agree with Governor Pillen that the sustainability of the foundation aid is important for reshaping the state’s investment in K - 12 education.”Southern District SchoolsHowever, most superintendents that spoke to FJN agreed that switching to a hard cap allows no flexibility when in funding.“School districts and different economic sectors of our economy are facing unprecedented worker shortages across Nebraska. We are all competing for the same workforce and the starting salary matters to every individual that is applying for an open position. I truly believe that the elected officials understand what they need to spend to hire and retain a quality workforce across Nebraska. By switching to a hard cap, it would limit the amount of funds that are available to provided salary and benefit increases to educators across the state,” wrote Dr. Chris Prososki, superintendent of Southern District Schools, in an email to FJN. “I feel that the governor and the state legislature do not fully understand the dire repercussions that will result if a hard cap is imposed on school districts. The same holds true if a hard cap is imposed on a local business or a family farm. The students in the great state of Nebraska deserve better than this, and we need to do all that we can to increase the salaries of teachers and classified staff members.”Tri County SchoolsSome school districts are concerned that the new “one-size-fits-all” approach to funding doesn’t address the significant differences between metropolitan and small, rural schools districts.While agreeing with the governor’s goal of lowering property taxes, Tri County Superintendent Tiffanie Welte noted, “Moving from a ‘soft’ cap to a ‘hard’ cap when school districts are already facing three lids, would make it increasingly difficult for locally elected officials to make financial decisions in the best interest of the students within their communities, however. Our state is so varied in district size, needs, and resources. School leaders and locally elected board members are paying the property taxes in their respective districts as well, so decisions regarding levies and funding opportunities are always taken seriously, with taxpayers in the forefront of people’s minds.”Diller-OdellMike Meyerle, superintendent of Diller-Odell, agreed, “So, I can only speak to Diller-Odell. What the situation is in Fairbury or Southern could look a lot different, so it is frustrating when all schools kind of get lumped together on spending etc.”“Despite increases in staff costs and other items that everyone is paying more for, we were able to decrease our tax request by $120,163, and decrease our levy by 7 cents.,” wrote Meyerle. “Our Board and I recognized that the expectation of the state was to decrease our tax request if possible. Fortunately, we were able to do so, and keep operations as we needed.”Meyerle added, “From my seat, the state is in favor of local control, as long as the local Boards do what the state thinks is right. If they don’t, the state wants to create ways to control the local Boards. Government at its best.”Thayer CentralThayer Central Superintendent Eric Miller said, “What concerns me the most is that some senators in the legislature and the governor, in this situation, are taking local control away from the elected school boards in our respective districts. There are multiple differences in each and every district across the state, as you know, and spending needs in one district don’t always match the spending needs in another district, even if they are geographically close. Citizens elect the School Board to approve a budget based on the needs of that district. In this scenario you are trying to do the same things for Omaha, Thayer Central, Fairbury, and Scottsbluff, but we all have multiple differences.”Miller added, “The real issue is that until there is an alternative revenue source for public education this will continue to be an issue.”

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