The writer, of Milford, is board president for Milford Public Schools.
Property taxes are high because state support of K-12 education is low. Nebraska ranks 49th in the country in state support of K-12 education.
Recently Gov. Pete Ricketts said, “We need local spending restraint because, over the last 10 years, local governments have raised local property taxes 54% while inflation only grew at 17%.”
Local spending is not the same as requesting local property taxes. Take, for example, Milford Public Schools (MPS), a rural equalized district. An equalized school district is one in which the “needs” of the school exceed the local “resources” of the school. Equalization aid is the foundation of state aid to schools.
In fiscal year 2010 to fiscal 2017, our school district’s general fund operating expenses grew from $6.9 million to $7.7 million, an increase of $800,000, which averages 1.7% per year.
But the property taxes requested by MPS over those same seven years increased by $1.8 million, which is a 51% increase. The increase in local property taxes is due to the fact that state aid decreased by $1.7 million. This same scenario is true for many rural equalized districts across the state as well as many schools who are now non-equalized due to the loss of state aid.
Over the last 10 years, as a whole, for all 244 school districts across the state, spending has increased by an average of 3.2% per year while the state budget has grown by 3.3%.
But Legislative Bill 974, a bill to help lower property taxes by increasing state aid to schools, was written with the false assumption that school spending is out of control and therefore, additional restraints need to be included in the bill. Schools already operate under levy lids as well as restrictions on increased spending.
The governor and some senators want to add even more restraints and try to limit school spending to the Consumer Price Index each year. So, in years in which the CPI is zero percent or negative, schools could not spend any more than what they did the previous year. This would result in no salary increases for any staff member and possibly the reduction in the number of teachers. Is it the intent of the governor and some senators that the quality of education for our most valuable resource, our children, be reduced? I would hope not!
The governor has a self-proclaimed limit on the state budget of 3%. Yet he supports controlling locally elected school boards by restricting school budget growth to the CPI, or from zero percent to 2.5% per year. It is interesting to note that the governor’s budget came in at 4.4% this year. When he was questioned about that, he simply said that if the extra funds for property tax relief are removed, his budget growth was now at 2.9%. How convenient!
The most effective way to stimulate the economy of our state is to increase funding to all 244 school districts across the entire state. A different proposal this session, Legislative Bill 1073, does just that. It provides increased funding to rural and urban equalized districts by lowering the local effort rate within the state aid formula (TEEOSA), which increases equalization aid to those schools. It also lowers the ag valuation within TEEOSA so that increased equalization aid will go to rural equalized districts. The bill provides basic funding to both urban and rural non-equalized districts while protecting the funding for the equalization formula. The bill does not contain any additional restraints, which allows locally elected school boards to provide a quality education for our children.
So the moral of the story is this: You can’t legislate fiscal responsibility; you can only elect fiscal responsibility. And that is exactly what voters have done all across Nebraska when they have elected their fiscally responsible local school boards!