OpenSky panelists: Time is right to bring back school finance review commission
The time may have come for Nebraska to again form a group dedicated to reviewing education finance in the state.
That was a repeated theme during a panel discussion at Tuesday’s OpenSky Policy Institute Tax Policy Symposium in Lincoln. (Watch video of the symposium.)
Faced with calls to lower property taxes and high reliance on property taxes to fund K-12 education, the state is now in a very similar position to the one it was in before it formed the Nebraska School Finance Review Commission in the late 1980s.
“I think we’re going to need a new funding commission that doesn’t go away,” said Larry Scherer, director of research at the Nebraska State Education Association, who was a staffer on the review commission. “This will help keep us from getting so out of whack.”
Faced with a familiar charge – lowering property taxes
Scherer and Ron Withem, who as a Nebraska lawmaker helped lead the commission, said the goal of the commission was to lower property taxes and reliance on property taxes to fund schools, and also to implement an equalization formula to help ensure all schools – regardless of property wealth – would be able to provide quality education to Nebraska’s students.
The commission’s work led to the creation of Nebraska’s school funding formula – the Tax Equity and Education Opportunity Support Act – or TEEOSA. As TEEOSA was implemented, the state increased its support for schools and property taxes fell statewide as a result.
Leaning hard on property taxes again
The commission gave way to a committee that reviewed school finance for several years but it was dissolved nearly a decade ago, Scherer said. The lack of review combined with frequent tweaks to the state-aid formula and recent increases in agricultural land value have again driven property taxes up and left the state very reliant on property taxes to fund schools.
“The reform commission helped strike a balance between state aid and property taxes but we have slowly lost balance ever since,” said Kevin Cooksley, a Nebraska rancher, longtime member of the Broken Bow School Board and a member of the commission.
An eerily similar scenario and recommended solution
As she read the executive summary of the commission report, OpenSky’s Renee Fry said she was struck by how similar the commission’s recommendations were to LB 280 – a proposal Sen. Al Davis of Hyannis had introduced earlier in the day.
“It was uncanny,” she said.
For example, one commission recommendation was to increase income taxes for school funding to help take pressure off property taxes to fund schools. LB 280 would reform education finance and lower property taxes with help from a local income tax.
Legislation to reconstitute commission forthcoming
Davis also announced at the symposium that he would put forth legislation to reconstitute the School Finance Review Commission. The panelists at the OpenSky symposium lauded the proposal, which was officially introduced Thursday as LB 323.
“One of the biggest mistakes we made was to dissolve the commission,” Scherer said.