Omaha area school districts are taking no chances that a judge's ruling that struck down the Learning Community's shared property tax system will punch a hole in their budgets for next year.
School boards for the Millard, Westside, Elkhorn, Papillion-La Vista, Bellevue and five other districts are hastily setting hearings to adopt alternative tax requests for 2011-12 in case the Nebraska Supreme Court does not grant a pending request to stay the judge's order.
If the court issues a stay before those hearings are held — most are set for Oct. 10 — then districts could cancel the changes and stick to the original budgets that were based on the Learning Community's common property tax levies.
Districts are all "searching in the dark" for the right way to proceed, said South Sarpy Superintendent Chuck Chevalier.
Sarpy County District Judge William Zastera on Sept. 23 struck down the common general fund and special building fund levies. Zastera said the levies violate a Nebraska constitutional prohibition on levying property tax for a state purpose.
The ruling puts in jeopardy about $450 million distributed to the 11 Learning Community districts through the common property tax levies.
Money raised by the levies is distributed to districts according to their needs identified through a state formula that accounts for poverty, limited-English speakers and other factors.
This year, the Learning Community Council set the general fund levy at 95 cents per $100 of valuation. The special building fund levy was set at zero.
Districts are working under a tight deadline. Under state law, they have until Oct. 13 to certify and forward their tax requests to the county clerks. The county boards of equalization have until Oct.15 to lock in levies.
Officials with Omaha Public Schools, a leading supporter of the common-levy system, had not decided whether to follow other districts in adopting an alternative tax request, according to Dennis Pool, OPS fiscal administrator.
He said administrators and OPS legal counsel will brief the school board Monday on its options.
"We are unsure whether we have any legal authority to do this," he said.
Because state aid distribution for next year is already set, and linked to the common general fund levy, reverting to the old system of each district levying its own property tax and keeping the money would create problems, Pool said. The distribution of state aid, meant to equalize resources for districts, would not account for the return to the former way of levying school district property taxes, he said.
Some districts, Pool said, would likely see a financial windfall, "and there will be other districts, if in fact the 95-cent levy is not levied, who will face significant shortfall, Omaha Public Schools being one of those."
Lawyers for the Learning Community and the Omaha and Bellevue districts requested the stay and asked the court to rule by Oct. 10.
They also have appealed Zastera's ruling and asked for a speedy review of the case.
Officials from several districts said the alternative tax requests would not mean a change in tax rates, only the way the taxes are levied.
Elkhorn Superintendent Steve Baker said his district's revised budget will be the same size as the original one adopted Sept. 12.
Without money from the common levy, the district would run out of money at some point and have to close its doors, he said.
"The taxpayer in the Elkhorn school district isn't spending one penny more," Baker said. "But we're protecting the long-term interests of the students in our school district. We don't have a choice."
World-Herald staff writer Julie Anderson contributed to this report.
Contact the writer: 402-444-1077, joe.dejka@owh.com
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