108S LB1 Opposition Testimony

July 30, 2024

Sen. Lou Ann Linehan, Chairperson
Sen. Joni Albrecht
Sen. Eliot Bostar
Sen. George Dungan
Sen. Kathleen Kauth
Sen. Fred Meyer
Sen. Dave Murman
Sen. R. Brad von Gillern

Chairperson Linehan and Members of the Revenue Committee,

The Lincoln Public School District submits this testimony in opposition to LB 1. LB 1 distributes state dollars through a property tax credit based on the percentage of total real property value in each county compared to the statewide total and then to each school district compared to the countywide total. Fifteen cents does not appear in the bill and the proposed proportional property wealth-based distribution formula runs precisely counter to equalization. This methodology must be fully studied and understood. I suspect the levy in a high-valuation, low-levy district will drop at a greater percentage rate than a low-valuation, high-levy district.

The Governor’s Office estimates a tax reduction on a $275,000 home in Lincoln at $2,200. Did the calculation take into account the reduction in the current property tax credit program or the elimination of the income tax credits for property taxes paid to school districts and community colleges proposed in LB 1?

Using data from the Department of Revenue, I came up with a tax credit of $1,800 on a $275,000 home in Lincoln. I further estimated the loss in state income tax credits and the reduction in the current property tax credit program at about $1,000. The net property tax credit on the $5,000 tax bill could be $800 or $1,200 according to the Governor’s Office estimates – which represents a 25% reduction on the high side. How much will the resident pay in increased sales tax? Do we have a study that averages the annual cost to a family? Once again, LB1 proposes tax shifts that must be fully studied and understood.

Finally, the intent to change the funding formula in a way that will entirely replace school general fund levies will result in the elimination of local control. Local school boards will not have authority to adjust overall revenue to address unique student needs, labor shortages, or manage the vast revenue swings school districts face.

Sincerely,

Liz Standish MBA, EdD
Associate Superintendent for Business Affairs
lstandis@lps.org 402-436-1636