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A final Give to Lincoln Day 2017 thank you! 

Thanks to our amazing supporters, OpenSky raised $26,056, including $2,615 in Lincoln Community Foundation matching funds, during Give to Lincoln Day last month!

We are incredibly grateful for the generosity shown by so many OpenSky donors as we couldn’t do what we do without our amazing supporters. — The OpenSky Team

Kansas lawmakers roll back income tax cuts

The Kansas Legislature on Tuesday evening overrode a gubernatorial veto and rolled back some of the income tax cuts that have caused major problems during the past five years.

The Associated Press wrote, “The state will increase its personal income tax rates and end an exemption for more than 330,000 farmers and business owners. Legislators expect the changes to raise $1.2 billion in new revenue over two years to close projected budget shortfalls totaling $889 million through June 2019 and also provide additional funds for public schools.”

In the wake of the of 2012 income tax cuts, Kansas was beset by problems such as:

Read the full AP article about the tax-cut rollback.

How Nebraska funds K-12 education

Open-Sky-Report

OpenSky Policy Institute has released its new report on K-12 funding: “Investing in Our Future: An Overview of Nebraska’s Education Funding System.”

Given the complexity and importance of our education finance system, OpenSky produced this primer to promote a dialogue on the vital issues surrounding how Nebraska funds K-12 education.

OpenSky Policy Institute is a nonprofit, nonpartisan organization focused on budget and tax policy.  About a year ago we expanded our work to look at education finance, as it became clear that how we fund K-12 education is integral to both budget and tax policy.

In the primer we explore how Nebraska has paid for K-12 education in the past, how it does so now, and discuss the perceived inequities of our current system.

Download a copy of the report here.

OpenSky Executive Director Renee Fry said: One of the most striking findings is Nebraska’s historical reliance on local sources of revenue, such as property taxes, to fund public schools.  In fact, every tax study since 1962 has noted heavy reliance on property taxes and low level of state support for K-12.

“Despite the best intentions to reduce our reliance on property taxes, Nebraska’s K-12 schools are more reliant on local sources of revenue than schools in any other state in the nation,” Fry said. “Such heavy reliance on local revenues has fueled the debate over how to make state funding equitable between districts that have high property values for tax purposes and those that don’t.

“Nebraska’s changing demographics — a declining rural population, skyrocketing agricultural land values and increased student needs in many areas — have made this balance even more challenging,” Fry said. “But with challenges come opportunity, and we hope this primer will help shape a more productive discussion about how Nebraska funds K-12 education now and in the years to come.”

Among the highlights of the report:

— Nebraska has always relied heavily on property taxes to fund K-12 education. In 1990, Nebraska ranked 49th nationally for the percentage of K-12 funding provided by the state. Despite legislative efforts to significantly increase state support, Nebraska still ranked 49th nationally in the percentage of state support for schools in FY 2012.

— In fact, our school funding mix has changed little since the implementation of our current funding system.

— A heavy reliance on property taxes and relatively low state support creates taxing inequities, which have driven much of the debate on how best to finance education.  In 1989/90, tax rates ranged from 75 cents to $3.25 per $100 of property tax valuation.  The range of tax rates in 2012/13 was 43 cents to $1.20.  So while the range has narrowed considerably, the highest tax rates are almost three times the lowest rates.

— In addition to tax rate inequities, school districts with high property values are able to spend nearly twice as much per pupil as those with low property values. Now, some districts may need to spend that much to offer high-quality educational opportunities in the face of challenges such as high poverty, high transportation needs, and small student populations that make it difficult to take advantage of economies of scale. But the districts that can spend the most may not always be the districts with the highest needs. Our funding system could do more to address these sorts of inequities and ensure that every school has access to the resources it needs to provide a first-rate education for its students.

— Furthermore, the districts with the lowest property wealth also have, on average, the highest tax rates. So while per-pupil spending can vary for many reasons, the fact that those districts with the lowest spending and the lowest property wealth tend to have the highest tax levies warrants further discussion.

— Because the state aid formula relies so heavily on local property values to calculate the resources of schools, the result is that urban school districts need more state aid even though they tend to have higher property tax rates.

— At the same time, the rural districts are seeing a loss of state aid due to increasing agricultural land valuations. However, agricultural landowners are not seeing incomes rise as fast as land values, so more of their income is being taken up by increased property taxes.

— These dynamics have fueled the ongoing rift in the Legislature and pitted urban and rural school districts against each other in the fight for state funding.

So while we hope this primer helps Nebraskans understand how and why today’s funding is structured as it is, we are left with some important questions:

— How can Nebraska create an education finance system that fosters quality, fairness and equity when some schools have four times as much property value per student as other schools?

— Should the state assume a larger role in K-12 finance and, in effect, reduce property tax reliance?

— Or is a more fundamental revision of the school funding system needed?

— For example, is property value an appropriate measure of community resources in today’s economy, or is it time to look at determining the wealth of a school district based on the income of its residents or some other measures?

***

For more information or to schedule an interview, please contact OpenSky Communications Director Chuck Brown at cbrown@openskypolicy.org or(402) 438-0386. 

Sustained vetoes will cut provider rate funding for key services; Tax credits for private school scholarship donations raise concerns

Provider rate funding for services for the developmentally disabled and other populations will be reduced following the Legislature’s rejection of $32.7 million in gubernatorial veto overrides on Wednesday.

Biennial cuts that will result from lawmakers sustaining the governor’s vetoes include:

·        $32.5 million in provider rate funding for developmental disability services, behavioral health services, child welfare and other health and human services; and

·        $300,000 in funding for probation services.

The sustained vetoes were part of a budget veto package that reduced general fund appropriations by $56.5 million. The vetoes — which add to budget cuts already made by the Legislature — also reduced funding for higher education and the replacement of the State Capitol’s heating and air conditioning system. The vetoes called for adjustments to some funds within the Department of Roads budget, as well.

In another state fiscal development, the Omaha World-Herald reported that Legislature’s Revenue Committee on Thursday advanced LB 295 to be debated by the full Unicameral next year. The bill would allow taxpayers to claim income tax credits for the full amount of donations to private K-12 school scholarship programs. The proposed committee amendment to the bill (AM1418) would limit the credit to:

·        $10,000 for a married couple filing jointly and $5,000 for all other taxpayers;

·        $50,000 for S Corporations, LLCs, partnerships, estates and trusts; and

·        $150,000 for corporations.

Under AM1418, the total value of credits provided by the state would be limited to $2 million in the first year and could increase gradually each year, capping out at $10 million annually.
Furthermore, the amendment stipulates that corporations could claim up to 70 percent of those credits. Two other amendments are pending:

AM 1420, which would change the corporate limit from $150,000 to $100,000; and

AM 1421, which would allow corporations to claim up to 75 percent of the total amounts of the credits.

LB 295 enhances the tax benefits of donating to scholarship-granting organizations, as opposed to other types of charitable donations because providing a 100 percent credit for such a donation results in a dollar-for-dollar reduction in the amount of taxes owed. All other charitable donations reduce taxable income, which means the tax benefit is worth the amount of deduction multiplied by the tax rate in the tax bracket in which one’s income would have fallen prior to the deduction.

OpenSky has several concerns about the measure, Executive Director Renee Fry said, including the fact that some wealthy donors may actually be able to profit from their donations to scholarship-granting organizations.

“In fact, in other states that have similar programs, such as South Carolina and Georgia, some scholarship organizations advertise these credits as money-making opportunities,” Fry said. “At a time when a major budget shortfall is causing cuts to key services like higher education and programs for the developmentally disabled, we have serious concerns about creating a new tax credit that would further reduce revenue and allow wealthy Nebraskans to turn a profit by way of the tax code.”

Read this recent report from ITEP and AASA to learn more about the effects of tax credits for donations to private school scholarship programs.

Budget vetoes include funding for provider rates, Capitol HVAC, higher ed; Override debate could come Wednesday

Many state agencies — including the university, state college and community college systems — would see additional .5 percent reductions in funding under line-item budget vetoes made by the governor. In total, the vetoes would result in an additional $7.3 million in cuts to higher education over the next biennium.

Furthermore, the vetoes would reduce provider rate funding more than $16.8 million per year and cut $11.06 million in funding for the replacement of the State Capitol’s heating and air conditioning system. In total, the governor’s vetoes would cut about $56.5 million in General Fund appropriations from the budget approved by the Legislature last week. The vetoes also make adjustments to some funds within the Department of Roads budget.

According to media reports, the Appropriations Committee will discuss the vetoes on Tuesday and any legislative floor debate on overrides of the vetoes would be held Wednesday. NET Nebraska will stream any override debate live.

OpenSky statement on Gov. Ricketts’ comments regarding April’s receipts report

For immediate release – May 11, 2017

LINCOLN — The following is a statement from OpenSky Policy Institute Executive Director Renee Fry regarding the comments made by Gov. Ricketts about April’s tax receipts and the information distributed by OpenSky on Wednesday:

“Following this governor’s comments this morning, we have no disagreement about the numbers that were presented by him and Budget Director Oligmueller. We do take issue with the claim that OpenSky put out false information. We stand by the information we put out yesterday. The comparison of April’s receipts to February’s forecast created confusion as the Legislature’s budget factored in the April forecast, not the February forecast.”

Contact Chuck Brown at 402-610-1522 or cbrown@openskypolicy.org for more information.

Sen. Campbell: Join me in supporting OpenSky on Give to Lincoln Day

Dear Friend,

I will support OpenSky Policy Institute on Give to Lincoln Day on May 18 because this amazing team provides some of the most thorough, accurate analysis of vital fiscal issues before the Nebraska Legislature.

Senators, media members and Nebraska residents in general rely on OpenSky for its non-partisan approach and comprehensive review of how important tax, budget and school finance legislation affects Nebraska’s future.

I hope you will join me in supporting OpenSky with a Give to Lincoln Day gift. Because it helps us secure a portion of a $350,000 matching pool generously offered by the Lincoln Community Foundation, a gift to OpenSky on or before Give to Lincoln Day is a great way to maximize your support of our mission to improve opportunities for every Nebraskan. Last year during Give to Lincoln, generous supporters helped OpenSky raise more than $29,000, including more than $3,000 in matching funds. We hope to surpass that this year.

You can help ensure OpenSky continues to be a trusted resource to senators, reporters and others via:

  • An online donation to OpenSky through our Give to Lincoln Website;
  • A gift from a Lincoln Community Foundation Donor Advised Fund; or
  • Check or cash gifts dropped off at the Lincoln Community Foundation (215 Centennial Mall, Suite No. 100) on Give to Lincoln Day. Checks must be made out to “Lincoln Community Foundation” with “OpenSky Policy Institute” written in the memo line.

You also can mail or drop checks off at the OpenSky office and we will hand-deliver them to the foundation office. Checks must be in the OpenSky office by May 18. The address is:

OpenSky Policy Institute
1201 O St., Suite 010
Lincoln, NE 68508

Again, I hope you will join me in supporting OpenSky and their important work.

Sincerely,

Sen. Kathy Campbell
OpenSky Board Member

Legislature rejects LB 461, will debate mainline budget on Wednesday

The Nebraska Legislature on Tuesday rejected LB 461, the Revenue Committee’s tax package, which would have provided large income tax cuts to wealthy Nebraskans and created revenue losses that would harm schools and other vital services.

The bill died as there were not enough votes to end a filibuster.

Fiscal talk continues Wednesday as the Legislature takes up second-round debate on LB 327, the mainline budget bill. The measure passed through first-round debate on a 31-1-11 vote but in light of last week’s revenue forecast, which was revised downward by $55 million, we expect to see significant changes to the bill discussed during debate.

NET Nebraska will stream the debate live.

OpenSky participating in Give to Lincoln Day again, early donations can be made now! 

OpenSky Policy Institute is excited to once again participate in Give to Lincoln Day, which is Thursday, May 18!

Give to Lincoln is an opportunity to support Lincoln nonprofit organizations like OpenSky. A gift to OpenSky through our Give to Lincoln Day campaign website will have added impact because we will receive a proportional share of a $350,000 match fund provided by the Lincoln Community Foundation and other sponsors. Last year, the matching fund allowed us to raise almost 12 additional cents for every dollar we received in donations after gift processing fees were applied.

And you don’t have to wait until May 18 to give as you can donate early by making “Secured Donations” online any time between now and May 18. These gifts will go toward OpenSky’s gift total on Give to Lincoln Day.

If you plan to support OpenSky this year, we’d ask that you give during Give to Lincoln Day to maximize your support of our mission, which is to improve opportunities for every Nebraskan by providing impartial and precise research, analysis, education and leadership.

We hope that you’ll once again support OpenSky on Give to Lincoln Day on May 18 — or before by making a secured donation — and help us continue to work toward better opportunities for every Nebraskan!

Budget briefing slides available for download, LB 461 on Tuesday’s agenda

Slides from this week’s OpenSky budget briefings can be downloaded here and videos from the briefings can be viewed on our Facebook page.

We also wanted to note that LB 461, the Revenue Committee tax package is back on the Legislature’s agenda on for Tuesday afternoon.

The bill will provide large income tax reductions for wealthy Nebraskans while doing little to address property tax relief. Learn more about LB 461 in our recent policy brief and also see our recent infographic about how the bill would affect real Nebraska taxpayers.

Debate on LB 331 and LB 332, which are part of the Appropriations Committee budget proposal, also is on Tuesday’sagenda. LB 331 relates to cash fund transfers and LB 332 relates to cash reserve fund provisions. Second-round debate on LB 327, the mainline budget bill, is tentatively scheduled for Wednesday.