The path ahead in the Legislature for the Revenue Committee's newest property tax reduction and school funding reform package began to look familiar Wednesday: It's going to be uphill.
Urban schools lined up in opposition to the proposal (LB974) at a committee hearing, as expected, citing the potential loss of millions of dollars in school funding, and they were joined by a number of suburban and small-city schools who also argued against the bill.
Meanwhile, some of the state's heavy hitters, including the Nebraska Farm Bureau and the Nebraska Chamber of Commerce and Industry, expressed their support for the measure.
The proposal would extend state aid to all schools, rather than the minority of school districts that now receive state assistance under the current school aid formula, while reducing property tax valuations across the state.
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The committee has scheduled an executive session Thursday at which senators could discuss whether to send the bill to the floor of the Legislature for early consideration. Six of the eight committee members signed onto the legislation.
Sen. Lou Ann Linehan of Elkhorn, chairwoman of the committee, has estimated a 13% to 15% average reduction in property taxes would occur as the proposal became fully effective.Â
"Every student would be supported by state funding," she said.
In Nebraska, nearly 60% of property taxes paid go to fund K-12 education. Currently, state aid only fills the gap between a district's educational needs and the funding available from property taxes and other resources.
While proponents of the tax reform proposal praised reduction in property taxes, opponents warned about the danger of diminished school funding support.
The proposal would hit "large urban schools serving a diverse population" the hardest, resulting in a potential loss of millions of dollars in school funding, Liz Standish, assistant superintendent for business affairs at Lincoln Public Schools, told the committee.
Marque Snow, president of the Omaha Public Schools Board of Education, said OPS could lose $26.7 million in funding support over a three-year period.
The bill would have "a significant negative impact on our students," he said.
Opposition from Lincoln and Omaha schools could have a significant impact on the future of the bill in a Legislature in which the votes of 33 of the 49 senators are needed to free legislation ensnared by a filibuster. Nineteen senators have Omaha or Lincoln addresses.
Linehan said the bill has built-in mechanisms for schools to recover lost funding.
Steve Nelson, president of the Farm Bureau, said 163 school districts — nearly two-thirds — do not receive any state aid now and LB974 would remedy that by providing state funding support for basic education for all students.
Bryan Slone, president of the Nebraska Chamber of Commerce and Industry, told the committee he supports the bill "with some reservations," but believes that enactment of property tax relief along with a new business expansion tax incentives program are vital requirements, "not optional," this session.
Opponents told the committee that the proposal takes away local control of schools and endangers their ability to adequately fund their operation.
"This jeopardizes funding for Nebraska schools," Norris School District Superintendent John Schwartz said, while leading to future budget cuts and reduced local control.
A number of opponents said a better course would be to raise additional state revenue to fund property tax relief and school aid reform, a path the committee attempted to follow last year. That proposal was trapped on the floor of the Legislature by a filibuster.