AP NEWS

Agriculture groups back bill to fix school funding flaws

May 8, 2019

A legislative proposal to make fundamental changes in the way Nebraska funds K-12 schools and in the process deliver an estimated $500 million in property tax relief has earned the support of several Nebraska agriculture organizations. The groups announced their support leading into first round legislative debate on LB 289, a bill advanced by the Legislature’s Revenue Committee.

“LB 289 provides much needed fundamental reforms to help break the cycle of overreliance on property taxes for funding K-12 education,” said Steve Nelson, Nebraska Farm Bureau president, in a provided statement. “This is no property tax band-aid. We’re talking about major tax and education funding reform, the likes of which we have not seen from the Legislature in a long, long time.”

The groups’ support for the bill is founded in the fact it addresses two major issues, specifically the state’s overreliance on property taxes for funding K-12 education and the state’s failure to provide funding to help cover education costs for all K-12 students.

“Today the state picks up the majority education funding costs for students in some school districts, while doing little to nothing to help cover the costs of education for others. The state clearly has a responsibility to help all our students no matter where they live, or the school they attend. LB 289 would help achieve that,” said Robert Johnston, Nebraska Soybean Association president.

LB 289 would address student funding inequities by establishing per-student Foundation aid for every school in the state. In addition, the bill would establish a minimum aid guarantee to ensure one-third of an individual school’s needs are covered by the state.

The bill tackles the overreliance on property taxes to fund schools by replacing those dollars with new sources of revenue, including elimination of numerous service-based sales tax exemptions, increasing state’s sales tax rate, increasing cigarette taxes, and eliminating the state’s personal property tax exemption among other items.

“Nebraska’s three-legged tax stool of property, sales, and income taxes has long been out of balance with property taxes being a major contributor to funding state priorities. LB 289 will help better balance our tax system by increase the sales tax contribution, while offsetting reductions in property taxes used for school funding,” said Dan Nerud, Nebraska Corn Growers Association president.

When fully implemented, LB 289 would lower Nebraskans property tax bills anywhere between seven to 20 percent, with Nebraskans seeing reductions in taxes paid for schools in the range of 15 to 40 percent, depending on the school district where their property is located.

“LB 289 puts Nebraska on the right track for funding our schools and in the process delivers significant property tax relief for all Nebraskans. This is not the state’s largest tax increase as the Governor and others have suggested, but rather, this bill reflects one of the largest property tax reductions in our state’s history,” said Tim Chancellor, Nebraska Pork Producers Association president.