Let’s accurately frame Nebraska’s property tax challenge

Property tax relief and adequate funding for schools and local governments was the topic of a recent community conversation in Nebraska City, hosted by the Center for Rural Affairs. Community leaders and Otoe County residents gathered to discuss property tax challenges facing agricultural land and residential property owners and the radiating impact on schools and local governments.

Dr. Jeff Edwards, of Nebraska Public Schools, reiterated the message shared by superintendents and school boards across the state: the reliance upon agricultural land property taxes is not a challenge created by school spending, but one that has been shifted from the state.

“Our budget is increasing by only 1.02 percent this year, with all of the new money going to general budget increases,” Edwards said. “Despite the rhetoric, public schools are not overspending.”

Like most Nebraska schools, more than 80 percent of Nebraska City Public Schools’ budget is consumed by staffing costs like salaries and health insurance; costs that are often beyond a district’s control. Yet Nebraska ranks 49th in state funding for education, so schools are forced to turn to property taxpayers to shoulder the burden.

This weighs heavily upon farmers, like Gene Hobbie of rural Dunbar.

“Going to the courthouse twice a year to pay property taxes on my farm land really hurts,” said Hobbie. “But, there is nothing that can be done about it. Even the banker has started to talk about how we can cut costs even further so that the property taxes can be paid.”

Attendees also mused on possible solutions to help bring better balance and equity in funding for schools and other local entities. Options such as sales tax on luxury services like dry cleaning or limo services were also offered as revenue generators.

“I am in favor of an income tax increase to help fund schools,” said Hobbie.

Consensus was found in the need to roll back tax incentive programs like the Nebraska Advantage Act and return the dollars to the revenue stream. Nebraska City resident Stephanie Schrader shared that the Nebraska Advantage Act no longer benefits small and local businesses as it was originally designed.

“Instead of using the funds to incentivize on a per job basis, the act has evolved to give multimillion dollar tax breaks to big businesses without consideration of the cost per job,” said Schrader.

As solutions to Nebraska’s tax imbalance are explored, it is imperative that we highlight those who would be most affected by these policies. Tax cuts and revenues which push back rhetoric and instead bring fairness and equity to Nebraska’s tax system are required in order to fund schools, services, and communities – and protect the good life.

Pictured: The Nemaha County Courthouse in Auburn. Nemaha County is just south of Otoe County on the eastern edge of Nebraska.