2017 Brings Tough Budget Choices in Nebraska

By Mary Kuhlman, reposted from Public News Service

LINCOLN,  Neb. – Nebraska rings in the New Year faced with a looming revenue shortfall – nearly $900 million heading into the next budget cycle for 2019. 

And while it's a touchy subject, some analysts say school-funding reform should be part of any budget discussions. 

Nebraska's school financing formula relies heavily on local property taxes, and Brian Hanson, senior policy associate with the Center for Rural Affairs, says local officials are stressed to ensure schools can provide Nebraska children a good education.

"But at the same time, that affects farmers and landowners who are facing really high property taxes, and that's something we're concerned about as well,” he stresses. “We want to see property tax reform, but we need responsible leadership that's going to consider changing the way we fund education to make that happen."

Some support reducing the property tax burden by increasing the sales tax, but Hanson argues that would hurt lower and middle-income families. 

He contends greater state investment in education would help lower property taxes without sacrificing the quality of education. 

Nebraska is ranked 49th nationally in state school funding per student.

Solutions suggested by lawmakers include lowering both income taxes and property taxes, which would then have to be offset by cuts in state services. 

But Hanson notes tax cuts over the past decade have already taken more than $750 million out of the budget annually. 

"Some tough decisions are going to be made, but we can't simply cut our way out of this budget shortfall,” he states. “And making further tax cuts would be a bit foolish."

Gov. Pete Ricketts supports budget reductions without tax increases, and is expected to outline his budget plan in the upcoming State of the State address.