‘Reckless’ Property Tax Relief Bill Still Alive
In late March, as the 2018 session of the Nebraska Legislature wound toward an uncertain end, two threats to state funding for public education took divergent paths.
LB947, a tax bill favored by the governor, featured corporate income tax cuts that would eventually carve a nearly $650 million a year hole into the state’s revenue stream. Sold as a property tax relief measure, the bill appeared to be chugging forward, despite a better property tax relief bill option (LB1084) available to senators.
LB1084, however, remained in committee as March neared an end.
At the start of the last week in March, Sen. Curt Friesen’s LB1103 advanced out of committee. LB1103 would provide a minimum amount of state aid for every school district, and has the potential to provide a better vehicle for property tax relief than LB947.
Meanwhile, LB295, a private school tax credit scheme, faced a filibuster that chewed up hours of debate in the time-strapped short session. The now-stalled bill would have allowed individuals and corporations to donate to private school scholarships, claim deductions and in some cases actually make a profit in the process. That scheme would have cost the state up to $10 million in tax revenues annually – to start.
A flurry of calls and emails to state senators by NSEA members on the afternoon and evening that debate got under way assisted with turning back LB295. Opponents of public funding for private schools fought LB295, and questioned the fairness of legislation that would treat donations to private school scholarships more favorably than donations to other worthy causes.
Lincoln Sen. Adam Morfeld summed up the misguided thinking behind LB295 when he said it would reduce state revenues that might go to shore up state aid.
“We can’t fund the needs that we have now,” he said.
A ‘Reckless’ Bill
Although now on General File, LB947 languished in committee until late in March.
The OpenSky Institute called the bill “reckless” – a characterization that came as a result of the $650 million in LB947 corporate tax cuts that would have to be offset by deep cuts to vital state services.
OpenSky said the corporate tax cuts would mean little to corporations that just received huge tax breaks from the federal government’s tax package last fall.
“We question why the state would give up the ability to fund key priorities like health care and education for a tax cut that is unlikely to affect business location and investment decisions,” wrote OpenSky Policy Institute Executive Director Renee Fry in a column in the Omaha World-Herald.
NSEA argued that LB947 fails to meaningfully address the state’s property tax issues, which is rooted in low state aid support for K-12 schools. LB947 would also dip into state reserves, pulling those reserves well below recommended levels. Even the Omaha World-Herald chimed in, saying that LB947 is “a measure that falls short of the strategic tax overhaul Nebraska needs.”
NSEA supports Albion Sen. Tom Briese’s LB1084, workable property tax relief that would broaden the sales tax base by removing select sales tax exemptions. It would also add a high-earner income tax and raise the sales tax by a half cent.
Absent the passage of either LB947 or LB1084, one group has begun collecting signatures for a proposal that would create a refundable state income tax credit of 50 percent of property taxes paid to schools. However, the plan offers no method for funding the estimated $1 billion in property tax relief it purports to provide.
Meanwhile, these bills were pending:
Social Security Taxes – Support
LB738 (Sen. Brett Lindstrom, Omaha) advanced from the Revenue Committee to General File in mid-March, and had a chance to be heard before the Legislature adjourns. The bill would index state taxes paid on Social Security income – essentially lowering a retiree’s state tax bill.
Third Grade Reading Bill – Support
In mid-March, an amended version of LB651 (Sen. Lou Ann Linehan, Elkhorn) was slipped into LB1081, the Nebraska Department of Education’s technical update bill. LB1081 has been prioritized by the Education Committee and is likely to be passed during the final week of the session.
It is important to note that the third-grade retention provision in the original version of LB651 has been removed from the bill.
Members may recall that last year Linehan introduced LB651, which at that time mandated third grade retention for students who could not pass a grade level reading assessment. The Education Committee had not yet acted on the bill when Linehan exercised a rarely utilized provision and pulled the bill out of committee and into first round debate by the full Legislature.
NSEA and members across the state fought LB651, knowing that it was not good for kids. Linehan’s bill did not advance in 2017, but was left for action in this legislative session.
Last fall during the interim period, Sen. Patty Pansing Brooks joined Linehan on a statewide tour of schools that provided a firsthand look at how reading is really taught across the state. As a result, Linehand amended LB651 so that it no longer calls for retention and, in fact, emphasizes those practices which are most conducive to strong student learning in reading.
The proposed amendment is not perfect. NSEA is still concerned that it mandates all school districts to offer a summer reading camp. The effect of that requirement on school budgets is still unknown, but NSEA is extremely proud of the impact that members had on this legislation and the potential positive impact it could have on overall student reading success.
Elimination of State Board – Oppose
A proposed constitutional amendment to eliminate the Nebraska State Board of Education (Sen. John Murante, Gretna) remained in committee, with little chance of advancement.
Early Childhood Education — Support
NSEA’s Jay Sears told the Education Committee that quality early childhood education programs pay dividends that may reach $13 for each $1 invested. LB877 incentivizes school districts to provide quality early childhood education by increasing the state aid reimbursement from 60 percent to 100 percent. NSEA testified in support, noting that quality early childhood education programs pay dividends that reach up to $13 for every $1 invested. LB877 remains in committee.
Dyslexia Resources — Support
Sen. Patty Pansing Brooks’ LB1052 would require students identified as dyslexic to be provided with an evidence-based approach for reading and writing instruction. NSEA worked with Pansing Brooks on development of the bill.
NSEA Executive Director Maddie Fennell told the Education Committee LB1052 had much input from classroom teachers. She also said NSEA supports mandating dyslexia training in teacher education programs. NSEA, she said, plans to build training on dyslexia into the Association’s statewide professional development program. LB1052 advanced from committee onto General File in mid-March.
Teaching Certificates – Support
NSEA supports LB1135 (Sen. Tony Vargas, Omaha), which allows a teacher with a valid teaching certificate from another state to begin teaching in Nebraska. NSEA also supports an amendment to require those teachers to eventually meet Nebraska certification standards. LB1135 remains in committee.
State Aid Study — Support
NSEA called LB1001 ‘forward-thinking’ legislation by providing for a study of school finance in Nebraska. The last such study took place in 1989, and culminated in the current state aid formula. The idea gained steam with more than a half-dozen senators adding their names as sponsors, but the bill remains in committee in late March.
Sen. Tom Briese’s LB1084 also proposes a study of Nebraska’s system of providing state dollars to K-12 schools, but also remains in committee.