Neb. Lawmakers Back New Caps on Property Taxes

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Instead of replacing the Depression-era elementary school in Murray, Neb., as he had hoped, Rick Black, the superintendent of the Conestoga school district, expects to add another portable building for next year.

Any hopes of substantial new school spending in the state were dashed last week when the Nebraska legislature voted to set new caps on local property taxes.

"The realities of 30 to 35 students per class is right there--there's no way around it," said Mr. Black, whose district has grown by 30 percent, to 660 students, in the past eight years as commuters from Omaha built homes along nearby Beaver Lake. "For a vast majority of schools in the state, that's going to pinch really hard."

Nebraska's nonpartisan, unicameral legislature last week passed a statewide limit on schools' share of local property taxes. The bill would cap the school rate at $1.10 per $100 of assessed value. Faced with rising anti-tax sentiment, many lawmakers supported the bill for fear that more severe measures might be enacted through voter initiatives. Gov. Ben Nelson, a Democrat, was expected to sign the measure by early this week.

In a district like Conestoga, where the property-tax rate for schools now stands at about $1.33, the bill would translate to a $500,000 cut from the current $3.5 million budget.

Sen. Ardyce L. Bohlke, the education committee chairwoman and a supporter of the bill, said she understood school administrators' frustrations but saw no other way around the issue.

"I can't fault them, but I also explain to them that 80 percent of the people in Nebraska do not have kids in the public schools, and 65 percent of their property taxes go for education," she said.

A Taxpayer Outcry

The cap takes effect in fiscal 1999. In the meantime, another measure passed last week will limit spending increases for districts to 2 percent next year, with no increase the year after, allowing adjustments only for increased enrollments. A district could spend an additional 1 percent if three-quarters of the local school board approved a tax increase.

To soften the blow of reduced local revenues, the legislature this month passed a measure that will pump an additional $50 million in state education aid through a formula designed to provide more money to poor districts. (See Education Week, March 13, 1996).

But the attention of lawmakers this year has been squarely focused on cutting local tax rates. Politicians hope the new caps quell the outcry that led citizens to organize three current petition drives for constitutional amendments that could cap, freeze, or even do away with local property taxes.

Nebraska State Education Association officials pledged last week to keep gathering signatures for a November vote on a 90-cent tax-rate cap. The measure anticipates that the state would step in with more funding.

Sen. Bohlke hopes citizens will give lawmakers the chance to make the new tax-cap work. The state plans to step in with more money--such as state income taxes or sales-tax receipts--to help make up for lost school revenue once the cap is in place.

"Unless we demonstrate that we're willing to look at spending," she said, "we lose the public."

Vol. 15, Issue 30

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