In recent weeks state senators outside of District 22, and even some in the community, have been using the phrase, “big increases in local subdivision spending have created the property tax crisis." These ideas have caught the attention of several school districts and boards of education across the state. It is very common for these groups to blame local spending for the property tax dilemma across the state, but let’s look at some actual, audited data and information to form our own thoughts on this notion.
Due to term limits and a lack of a historical perspective in the state Capitol, many senators may or may not know that K-12 education used to be as high as 32 percent of the state budget but now is only 27.6 percent. They also may or may not know that the unwillingness to adequately provide funding at the calculated amount to fund K-12 public education forces an overreliance on local property taxes. Property taxes statewide have increased dramatically in some areas because of inadequate school funding at the state level. State aid to schools is property tax relief if or when properly funded. The Legislature has tried to patch this with property tax credits that don’t have an impact on the tax levy.
In 1998, the Legislature enacted spending and levy authority lids on school districts that limited schools to a $1.05 general fund levy per $100 valuation. State aid to schools is determined each year by the Legislature. State funds are then dispersed to cover the remaining budgeted needs through equalization aid or general state aid dollars to schools. This has only happened in its entirety three or four times since 1998. To show how this affects us locally here in Columbus, here are some statistics:
• The tax levy for Columbus Public Schools in 1994 was $1.51 per $100 valuation.
• In 1998, that was reduced to $1 per $100 valuation through statute.
• From 2010-11 to 2011-12, state aid to CPS was reduced by $2,525,178 from $14,536,247 to $12,011,068.
• That same year CPS raised the general fund levy 5 cents to help reduce the loss of state revenue. This still left CPS $1.8 million short in revenue from the previous year.
• In 2017-18, CPS state aid dollars are $11,523,048. This is a reduction of $3,013,199 in state funds since 2011.
• From 2010 to 2018, the general fund local tax request did increase from $16,616,161 to $18,290,788, an increase of $1,674,627. This is a negative $1,338,572 gap in revenue over that time.
Here are some facts and figures from the U.S. Census Bureau and annual audit of Columbus Public Schools:
• Nebraska K-12 schools receive 49 percent of their funding from local property taxes while the national average is 29 percent. CPS receives about 51 percent of our funding from local property taxes.
• Nebraska K-12 schools receive 33 percent of their funding from state sources while the national average is 47 percent. CPS receives only about 31 percent of our funding from state sources.
• Nebraska's K-12 average cost per student is $11,902. CPS spends $10,909 per student, which is 8.34 percent less than state average.
• CPS enrollment has increased by 418 students from 2001 to 2017. In 2001, enrollment was 3,418 and current enrollment is 3,907.
It is easy for elected officials and others to blame local spending for high property taxes. Maybe we should spend more time and energy on fixing how our schools are funded. We have a funding problem that negatively impacts numerous school districts and communities across the state. Expanding our tax base and looking at the hundreds of millions of dollars in incentives we give away each year that could alleviate the property tax burden could be a place to start as we work on finding revenue outside of local property taxes.