BLUE HILL SCHOOLS Property Tax Authority for 2024-2025 Budget
Governor Jim Pillen called a special session to address Nebraska's property tax crisis and how schools are funded in Nebraska. The Blue Hill School District keeps sight of the fact that property taxes fund the most significant percentage of school district operation expenses and we believe we should be active in finding ways to lower local property taxes and to be efficient in our operations and programs.
The governor's original plan going into the special session was to fund schools with sources other than property taxes It is becoming apparent that the special session will produce a very different plan from the governor’s proposed plan on providing funding for Nebraska Schools.
Changing consistent funding and lowering a long time reliance on property taxes can be a challenge. The Governor was very helpful last year, as the legislature agreed with the governor to establish the $1 Billion Education Future Fund. From the Education Future Fund, public school districts receive Foundation Aid ($1,500 for each student). Blue Hill Community Schools received $439,507 in Foundation Aid last year. This fund helped provide new funds for public schools while providing some property tax relief.
The Foundation Aid plus an increased property valuation in the district allowed the Blue Hill Community School Board to lower the district's property tax levy by 12 cents. The 2022-2023 tax Levy was $0.97 per mill (.94 general fund and .03 building fund). The 2023-2024 tax levy is $0.85 (.82 General Fund and .03 Building Fund). It is too early to determine what the 2024-2025 tax levy will be, but it will be very near or at the current levy rates.
Also, last year, the legislature passed LB 243, which imposed new limits on a school district's ability to levy property taxes. In particular, LB 243 now implements a new "soft cap" established at 3% over the previous year's tax request. It is referred to as a "soft cap" because if a district feels it needs to go over the 3%, it could do so with a 70% vote of the board in favor of the increase. If the Board votes in favor, the Board could go as high as a 7% increase in tax asking. Over the last 14 years, Blue Hill Schools has averaged an annual increase of 2.13% in tax asking from the previous year.
Last year, the Blue Hill School Board approved a resolution allowing the district to maintain its ability to access more than 3% in future budgets if necessary. The Blue Hill Board had no plans now or in the future to raise the tax request and exceed the 3% cap. However, no one knows what state funding will look like in the future.
At the August 19 School Board meeting, the Board will vote on a resolution that empowers the district to maintain the potential to access more than 3% in future budgets if determined necessary. This resolution is not just a decision for the Board, but a collective responsibility for all of us in the community to protect the district's tax-asking authority and keep it a local decision.
Nebraska taxpayers do not know what will happen as a result of the special session. Discussions during this special session have mentioned that perhaps Nebraska has too many small school districts and that the state should take more control over the local school Boards and make decisions at the state level as to which schools should be funded and allowed to stay open.
Preparing to meet our future needs or make up for changes in state funding is a way to be fiscally responsible to our taxpayers, students, and school district. Passing the resolution is transparent and straightforward. No current or future taxes will be raised without all state-mandated public notifications and opportunities for public input.