A state senator proposes a shift away from property taxes to fund schools by enacting a local income tax.
State Sen. Al Davis of Hyannis stated during a news conference in the Capitol Rotunda Nebraska must find a different way to fund public schools.
“But despite Nebraska’s strong interest in education, the state has never played a significant role in funding our schools,” according to Davis. “When compared to other states, Nebraska ranks dead last in its support of local schools with a heavy reliance on property taxes at the local level to educate children.”
Davis proposes a change in how Nebraska pays for public education.
Many local school districts, especially western, agricultural districts depend on the property tax to pay the bills. Farmers and ranchers have objected, stating that some years they might be property rich, but income poor, depending on commodity prices.
Under the Davis proposal, farmland would be assessed at 65% of its market value, rather than the current 75%. The drop in revenue to school districts would be offset by a local income tax, dedicated to education.
The proposal also would guarantee school districts $500 per pupil, whether the district receives equalization aid from the state or not.
Renee Fry, Executive Director with the Open Sky Policy Institute appeared with Davis at the news conference and called it a more balanced approach.
“This would assess a community’s ability to pay based on property and income wealth and would lower property taxes across the state and would keep local income tax revenues with the local school district,” Davis stated.
Also, if the revenue generated by the local income tax fell short of needs, it could be increased by a super-majority vote of the school board.
Davis estimated that his proposal would lower property taxes throughout Nebraska by $407 million. Income tax revenue would grow by $368 million. State aid to public schools would increase by $39.4 million under the proposal.
AUDIO: Brent Martin reports. [:50]