Center for Rural Affairs gathers public comments on taxes, seeks to educate members of public.
Central themes were easily picked out on Tuesday evening during the community conversation to discuss the Nebraska’s ongoing property tax debate.
The event at the Rowe Safety Complex was guided by Jordan Rasmussen, a policy associate for the organizer of the event, the Nebraska Center for Rural Affairs, based out of Lyons.
Also at the meeting were farmers Gene Hobbie and Al Guenther, both of rural Dunbar, Jay Sears of the Nebraska State Education Association, Dr. Jon Habben, Executive Director of The Nebraska Rural Community Schools Association, Dr. Jeffrey Edwards, superintendent of Nebraska City Public Schools, Stephanie Shrader, a resident of Nebraska City, Ansley Mick of the Nebraska Farm Bureau, and Corbin Delgado with the Center for Rural Affairs.
Once the discussion got going, it became clear that those in attendance agreed on two central themes, that the public schools in Nebraska were doing a good job of educating children, while at the same time dealing with a funding problem, and that high property tax, particularly that collected from the state’s agriculture producers would present untenable situations and real consequences for citizens.
Dr. Edwards gave his prospective as the chief administrator for the Nebraska City public school system.
To be clear, Dr. Edwards said he felt the schools were facing, not a spending problem, but a funding problem. Dr. Edwards said the available funds have not been matching the increases in eduction cost, resulting in cuts. If that continues to be an issue, cuts will become increasingly hard to find.
“What gets squeezed next,” Dr. Edwards said. “You are talking people and programs and then you are talking about losing opportunities for kids.”
In tieing these issues to taxes, Dr. Edwards said he felt the state’s agriculture producers are getting pounded by taxes and that funding needs to come from a new source.
What that source might be is the major issue.
“We all have thoughts and pieces but we have to get it sold in Lincoln,” said Dr. Edwards.
Hobbie said the taxes he pays as a farmer, at this point, are near back-breaking. Unlike other farm expenses, where the costs can be mitigated by shrewd business strategy, the tax bill is not something that can be avoided.
This is not a new issue for farmers. Hobbie said the state has tried to address the problem with different solutions over the years, but those turned out to treat the affect of the problem, not the cause of the issue, which is an over reliance on property tax as a sole funding source for education.
Hobbie said solutions like tax lids and state aid may have provided momentary relief but that those solutions ended up being Band Aids and the problem of property tax reform quickly comes up again.
“We are running out of Band Aids. We are starting to hemorrhage here on the farm,” Hobbie said. “We need to put these expenses on another type of tax.”
Hobbie said re-allocating the tax obligation will not be a popular sell and said that politicians in Lincoln may have to “bite the bullet” and make unpopular decisions that may be right for the state but may result in those politians not being re-elected.
“I am in favor of a raise in income tax,” Hobbie said. “That is going to affect me, but it’s not going to affect me as much.”
The idea of shifting the burden to sales tax was floated in the discussion with the acknowledgment that sales tax tends to be regressive, affecting lower income groups. Taxes on internet sales would help and Delgado noted that those kinds of taxes are less regressive since those paying the tax have demonstrated income by purchasing computers and internet access to reach the web marketplace. However, constitutional issues have blocked internet sales tax initiatives as some have argued that state taxes cannot be collected from an entity that does not have a physical presence in the state.
Mick said property tax relief issues are going to have to be addressed soon and an understanding would have to be gained before the situation got worse. Mick noted that legislation debated in the last session of the legislature threatened to make the tax problem even worse. Although the bill did not pass, Mick said it did have traction and good talking points.
State aid was discussed with speakers agreeing that the bigger schools in Nebraska are taking an increasing amount of the available state funds, which result in less state funding being available for rural schools and that would result in higher property taxes.
In an effort to steer the discussion back to the issue, Guenther said there needs to be attention to the cause of high property tax rather than attention to the affects after the fact.
Guenther noted that the federal and state governments have been passing along tax bills to the local level and then claiming victory for tax reduction.
“Now we are seeing the result of that tax shift to the local level,” he said.
Guenther said programs like Nebraska Advantage, which gives tax incentives to businesses in an effort to create and/or retain jobs has resulted in the state losing a lot of money to non-Nebraska based companies without the state getting a benefit in return.
The Nebraska Advantage, Delgado said, which sunsets this year, is something that could be an area where citizens could make a difference. By talking about the problems with the Nebraska Advantage program and raising its negative aspects, Delgado said the Nebraska Advantage could me made into a poison pill for any politian who decides to back it.
Guenther raised other tax issues, such as highly capitalized companies paying over market prices for land with those purchases ending up resulting in the increased valuation of property and higher tax bills.
A popular political buzz conversation of comparing states can also lead to issues when comparing how governments run, Guenther said. Some politicians wonder why Nebraska can’t operate like other states, but Guenther that those states have different circumstances.
South Dakota doesn’t have income tax, but the state does tax its highly lucrative tourist industry. Nebraska chooses not to tax similar activities, like admission to the Henry Doorly Zoo.
Whatever the problems are, it would seem that solutions begin with communication.
Dr. Edwards talked about the school’s program which sent groups of teachers out to meet with businesses and community leaders to make a connection with citizens and to give them an idea of what the schools do for students in the district and what challenges they face. Those discussions will continue to be had going forward.
In addition, Dr. Edwards said the I Love Public Schools program, which is gaining traction nationally, has been a good conversation piece for talking about programs, funding issues and property tax.
Getting senators to visit the classroom and having discussion with those legislators could also help.
Speakers at the event said discussion was key to finding a solution and expressed some disappointment that there were not more people in attendance to talk about the issues. Guenther said the media’s presence at the meeting was important to get the message out and to inform people of the serious issues related to property tax relief.