Photo by Unicameral Update
Groene on the floor Tuesday
Sen. Mike Groene’s effort to reduce property taxes did not pass muster Tuesday with the state Legislature, but he said Wednesday that the legislative battle is not over.Groene said the bill's supporters believe they have 25 votes -- a majority needed to pass the bill. But they are not sure they have enough votes to stop a filibuster.
"We are taking a vote count," he told the Bulletin Wednesday. "We may bring it back up no matter what so we can get senators on the record."
The bill would direct more state aid to schools that rely on property taxes for more than 55 percent of their general fund revenue. It woud transfer money from an existing property tax credit program to the schools, which could increase property taxes on residential homes slightly -- around $40 for a $100,000 home -- according to studies by the Omaha World-Herald and Lincoln Journal Star.
Here's more about how it would work:
As introduced, LB 640 would decrease the maximum levy for school districts and direct money in a property tax credit fund — funded by state income and sales taxes — to increase state aid to districts that lose money as a result.
Groene said the bill would more fairly distribute funding under the state’s school aid formula. As valuations on agricultural land have increased over the last decade, he said, rural schools have received less and less state aid because they can rely on property taxes to meet their needs.
This has placed a disproportionate burden on rural property taxpayers, Groene said.
“[LB640] puts equity back into funding of our schools for every single property tax payer in the state,” he said.
A pending Revenue Committee amendment would replace the bill, reducing the maximum levy for school districts from $1.05 per $100 of property to 98.7 cents per $100, beginning in fiscal year 2018-19.
For tax year 2017, $224 million would be transferred from the property tax credit fund to the school aid fund. A school district could qualify for property tax relief aid if property tax receipts exceed 55% of its total revenue.
A school district that receives property tax relief aid would decrease the amount of property taxes it collects by the same amount.
For years in which a temporary reduction in aid occurs, a district could levy up to an additional 3 cents above the maximum levy after a public hearing and approval by two-thirds of the district’s board.
Henderson Sen. Curt Friesen supported the bill and the committee amendment.
Friesen said no schools in his district receive equalization aid, which is state aid intended to cover the needs of school districts that cannot be met by other resources such as property taxes.
He said LB 640 would be a small way to address the shift in state aid from rural districts to urban districts.
“If [LB 640] would go into effect, it would bring more state aid to all those non-equalized districts that currently receive none,” he said.
Sen. Roy Baker of Lincoln opposed the bill, saying that it would channel more state aid to some rural districts that have more resources, away from poorer districts. In his district, he said, Tri County Public Schools outside DeWitt would receive property tax relief aid under LB 640 even though its tax levy is far less than that of Beatrice Public Schools.
“This is like a reverse Robin Hood bill,” Baker said.
Lincoln Sen. Kate Bolz also opposed the bill. By directing all of the money in the property tax credit fund to school aid, Bolz said, LB 640 effectively would increase property taxes on homeowners in her district.
“I’m struggling to understand how I could talk to my neighbors about why this legislation works for them and how I can keep my commitment to that property tax credit program,” she said.
Sen. Dan Hughes of Venango, who supported the bill, acknowledged that property taxes in some urban districts could increase if LB 640 is implemented, but he said property taxes on agricultural land in many cases have doubled in the last five years.
“I don’t think that asking for a little bit of that shift back from the urban homeowner is out of line,” Hughes said.
The Legislature adopted a technical amendment 30-3, giving supporters hope they can find the 33 votes needed to overcome a filibuster, but the bill was pulled aside to move to other bills on the agenda without voting on the committee amendment, or on the bill itself. That could be the end of the bill this session.
The Unicameral Update is the official news service of the Nebraska Legislature. The North Platte Bulletin contributed to this report. This report was updated Thursday morning, April 20.