Consider this situation. Two customers walk up to a store checkout counter. They both are purchasing the same item costing $100. The cashier rings up the first purchase and asks the customer how much money he has in the bank. The consumer admits he has very little. The cashier responds by charging him the full $100. The second customer comes forward with his $100 item and is asked the same question. He replies that he has a very healthy bank account. In response the cashier tells him that his item will only cost $50.
Does this sound fair? Does it even make sense? This story represents what happens when Nebraska residents pay for their school facilities. The first customer, who must pay the full $100, represents the position of the Columbus taxpayer.
A very important school concept in Nebraska school finance is called “equalization aid.” This has been created by the state to create fair distribution of educational funds across the state. This is necessary because some districts have high property values. Conversely, other districts have very low valuations. What equalization does is provide state funding relief to districts who have the low property wealth. The state does this so schools in property poor areas have educational funds comparable to schools that reside in property rich districts.
This is very important to Columbus residents. The land area paying for the Columbus Public Schools is relatively property poor. This is because much of the Columbus manufacturing dollars goes to the Lakeview Community School District. Therefore, the property taxes that support CPS come mainly from Columbus residencies.
Because CPS is an equalized district, approximately forty percent of its day-to-day costs are covered by state funds. These are called operational expenses. However, there is another major category of costs that is not covered under this fairness driven state formula. That category is building or bonding costs.
The result of this is the dollars needed to pay for school facilities comes from Columbus residents’ property taxes. Because they have very little in the bank, property value wise, they must pay for the full cost of their school facilities. Residents of districts that have high property values, by contrast, fund relatively little of their school facilities’ costs. This is a very unfair situation that cries out for a solution. A bill that is now before our state legislature proposes one.
LB 492 proposes to extend the equalization concept to school facility bonds. This bill would bring state aid to equalized school districts, like CPS, for building projects that are approved by voters and a regional commission. The result would be that Columbus citizens would gain property tax relief by having the state of Nebraska assist them in their bond payments.
The relief this bill proposes is long overdue for Columbus. It would right a situation that currently is very discriminatory. Residents of districts like CPS pay an unfair property tax burden compared to districts who have high land wealth due to large numbers of farm acres or high manufacturing wealth. Should this bill pass it would provide great property tax relief to Columbus residents on any new school facility projects.
If you believe such property tax relief is needed in Columbus, I urge you to contact our senator, Arnie Stuthman. His support of this bill would help lead to not only property tax relief in Columbus, but also to greater fairness in how district facilities are paid for across the state.
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