Nebraska has a School FUNDING Problem

In a recent article in Kearney area newspapers submitted by State Senator John Kuehn, he stated that “big increases in local subdivision spending created the property tax crisis.” That really caught my attention because that certainly has not been my experience as superintendent of schools in York, Nebraska.

I realize it’s a very “catchy” thing for some elected officials to blame local spending for our property tax dilemma but let’s look at some actual, audited data to form our own thoughts on this wildly political topic.

You see, our politicians know how the system works. They know what the school aid formula (TEEOSA) calculates each year and how much they allocate in the state budget for K-12 funding. I would hope they realize that TEEOSA has only been fully funded to its calculation three or four times in the past 16 years leaving increased local property taxes to fill the void in all other years. I would hope they understand that K-12 education used to be 32% of the state’s budget but is now 27.6%. They should know that their unwillingness to adequately fund K-12 public education forces our over-reliance on local property taxes. I assume they know that approximately 65% of Nebraska’s school districts don’t receive any equalization aid from the state as they are on their own with local property taxes as their primary revenue stream. Property taxes have soared in the last 7-8 years because of inadequate school funding.

Let’s look at the revenue side of the equation to back up my claims from above.

• York Public Schools has had an average annual total revenue increase of just 1.1% since 2008-09 despite our local property tax request increasing over 57% in that same time span. Many other school districts and communities are in the same situation.
o That’s correct….local property taxes have increased over 57% in eight years but our TOTAL revenue increased just 8.8% in that same eight year span.
o You see, in way too many instances, local property tax revenue is simply replacing lost funding from the state.
• We’ve seen the total annual revenue of York Public Schools decrease from $16,040,850 in 2014-15 to $15,016,433 in 2016-17 even though our property tax revenue went up close to $700,000 within that same time frame.

Now, let’s look at spending.

• York Public Schools has had an average annual spending increase of just 1.3% since 2008-09 and a 0% increase since 2014-15. Many other public school districts in Nebraska can say the same thing.
• So, a 0% spending increase since 2014-15 but our local property tax request has gone up $700,000 since then because it is replacing lost revenue….not because of spending.

Here are some facts and figures from the U.S. Census Bureau and annual audit of York Public Schools.

• Nebraska K-12 schools receive 49% of their funding from local property taxes while the national average is 29%.
o YPS receives about 74% of our funding from local property taxes

• Nebraska K-12 schools receive 33% of their funding from state sources while the national average is 47%.
o YPS receives only about 18% of our funding from state sources

It’s so easy for some elected officials to blame local spending for high property taxes. I wish they would 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. Expanding our tax base and looking at the hundreds of millions of dollars of incentives we give away each year could be a place to start as we work on finding revenue outside of local property taxes.