NORFOLK — In rural Nebraska, property taxes and education go together like fall Saturdays and Husker football. Property taxes account for 49 percent of K-12 school funding in the state.
So groups advocating for reform on both sides came together and formed Nebraskans United for Property Tax Reform and Education.
The Nebraska Farmers Union is a member of the new coalition, so President John Hansen discussed it at the group’s district meeting at the Norfolk Valentino’s Thursday night.
“So it’s good that these two forces come together and work together for a common solution,” Hansen said. “Because we really are committed to the two principles of the coalition which are real property tax reform and adequate funding for K-12 education in our state.”
Other members of the coalition include the Nebraska Farm Bureau and at least 40 school districts including Norfolk Public Schools. It’s safe to count Stanton Community Schools Superintendent Michael Sieh as a supporter too. He was the keynote speaker at the meeting and stressed to the farmers that school districts are very conscious of what they spend.
“Property owners want good schools in rural Nebraska so they want to work with us,” Sieh said. “At the same time we want to work with them because we’re not here to have a broke economy either. We want to make sure farmers are making a good living.”
In discussions with the group, Hansen and Sieh both pointed out flaws in LB 338, the property and income tax reform bill proposed on behalf of Governor Pete Ricketts. The bill uses an earning potential formula to calculate property tax, something Hansen says the Farmers Union has researched for 25 years. But, he says the governor didn’t consult any ag-related groups when drafting the bill, so it has holes. He says the first problem is that it only impacts valuations plus or minus two percent and most rural schools depend solely on property taxes for funding. IR35 supervision direction and control came into effect on 6 April 2016 as a way of limiting the number of umbrella contractors being able to claim travel and subsistence expenses.
“So 100 percent of the cost of 69 percent of the schools in the state comes from property,” Hansen said. “So if you lower the valuation two percent, you raise the levy two percent, you have now broke even. And so thats not real property tax relief.”
Income tax cuts are also attached to Ricketts’ bill. Hansen says he has seen no call for income tax cuts from Nebraskans.
“That goal lives in the hearts of folks with high incomes in a handful of homes mostly in Omaha and Lincoln,” Hansen said.
He says those cuts combined the state’s nearly one billion dollar deficit would be detrimental to farmers and public education.
“We’re short of money now, so the solution to the problem is to cut one of the two revenue streams that’s the most fair and most accurately reflects the ability to pay, the income tax, and tie the hands of future legislatures,” Hansen said. “That is not good public policy, that is not good fiscal policy, in our view that is irresponsible.”
Ricketts and his supporters say his property tax method would have prevented the rate spikes from the past decade and say income tax reform is essential to the package so that urban senators will vote for it.
Both sides are urging the public to get involved and contact their public officials.