This editorial appeared in the Scottsbluff Star Herald.
Property taxes can't be the only way we finance our schools.
In the spring of 2012, some Chadron citizens, most of them opposed to a proposal for a $12 million bond issue, were standing shoulder-to-shoulder in a packed Chadron high school room discussing property taxes and school improvements. The school was having major infrastructure issues with heating and cooling, windows and more, and a number of repairs had been delayed because the administration wanted to focus on serving students.
About 5 minutes into the meeting the group heard a loud noise. Superintendent Caroline Winchester went to check on it and found that the roof had blown off the gym next door. The group had to move to a smaller room downstairs because it wasn't clear how much of the building was compromised.
Yet even witnessing an infrastructure problem firsthand wasn't enough to move the voters, and the bond issue failed. The taxpayers told the Chadron school district that they understood the issues but they couldn't pay any more.
Winchester said that in sparsely populated Dawes County some 10 percent of the population pays 40 percent of the property taxes. The Chadron public school district is 19th from the bottom in valuation per student because nearly half of the land in Dawes County is state or federally owned and Chadron public schools is 11th from the bottom for money per student.
Winchester pinpoints the problem to the way schools are funded in Nebraska, which is a legislative issue, and she went about creating a legislative committee. She's also been encouraging other area superintendents to field their own legislative committees, be active with them and establish relationships with state senators.
"There's no simple answer," Winchester said.
As agriculture land valuations continue to rise, too few people are paying for the privilege of funding public schools, Winchester said. Farmers and ranchers are sometimes paying 75 percent of their gross income in property taxes, whether or not they made much money that year.
Pastures don't raise many more cattle than they did in the 1800s, but taxes and inflation continue to rise. Property taxes are fixed for farmers and ranchers and they don't have any room to negotiate.
The three-legged stool of income, sales and property taxes is "out of whack," according to Winchester. It comes down to whether or not our state has the political will to fund education equitably. People complain that school spending is out of control, but in reality school spending has been on a downward trend.
Nebraska is the second-most reliant on property tax for school funding and most reliant on local revenue of any other state.
The problem lies in there being a very low amount of state funding. School funding by the state government is also the 49th lowest in the nation.
Members of the OpenSky Policy Institute were touring the area in recent days talking school funding and property taxes. They pointed out that nearly 48 percent of school funding comes from property taxes in Nebraska, compared with a U.S. average of nearly 30 percent.
Nebraska is considered neither a high-tax nor a low-tax state. According to the latest U.S. Census Bureau data, released in 2012, Nebraska ranks 26th in combined local and state taxes as a share of personal income.
By the same measure, our state's personal income taxes rank 29th, sales taxes 26th and property taxes rank 15th.
We have some of the lowest taxes for new businesses in the country. We rank at the top for hiring climates, economic climates and business friendliness.
Potential solutions to the school funding issue, according to OpenSky, would be raising sales taxes, expanding the sales tax base and modernizing the tax structure to expand to more services.
One example, under the current tax code: In Nebraska, if you rent a limousine it's taxed; but if you rent a limousine with a driver it's not taxed because it's a service.
Another idea to generate funds could be to limit itemized deductions and tax exemptions and expenditures in the state of Nebraska. Part of the problem is that there's no easy solution and no one wants their taxes to go up.
OpenSky representatives see a possible solution in not increasing taxes but in shifting how the total funding numbers are reached.
Some of our neighboring states aren't faring much better. South Dakota hasn't put much effort into increasing its education funding, and Kansas, which served as a model for our funding structure, is also struggling.
Education is crucial to the success of our state. People with bachelor's degrees earn 65 percent more than those with only a high school diploma, according to the Bureau of Labor Statistics. Education directly correlates to employability and earning potential.
Nebraska rightly has a focus on education, but in rural areas it can't continue to be funded on the backs of farmers and ranchers who are fighting to keep their own heads above water.