The executive director of the Nebraska Association of School Boards says Nebraska needs to change the way it looks at the issue of school financing and districts’ reliance on property taxes.
In an address to members of the Noon Rotary Club Tuesday, NASB Executive Director John Spatz said this is a “critically important” issue that has gotten more tense over the last few years.
“One thing I am saying to groups across the state is, ‘What is failing everybody right now is the narrative,’” Spatz said. “I have heard people say schools spend too much and that the only way to property tax relief is through spending control at the local level. I hear that when times get tough for families or small businesses, they ‘tighten their belt.’ It is these types of narratives that are really preventing us from making progress at the state level.”
According to statistics provided by Spatz, CNBC ranks Nebraska as having the third best education in the nation, while U.S. News and World Report ranks the state sixth.
Spatz said when it comes to taxes, studies by news organizations have shown Nebraska at various ranks, ranging from the mid-20s to the 30s.
“When you look at the aggregate of the data, I think for today’s purpose, Nebraska is a high taxed state with property, sales and income taxes,” he said.
When it comes to the cost per student, Spatz said, Nebraska spends an average of $12,000 per student, which is one of the highest in the nation. While this number is high, he said there are other factors that need to be considered.
“I hear state legislators ask, ‘How do we spend so much per student? In Nebraska, we are clearly greedy at the local level and are spending too much. That is why we are so high,’” Spatz said. “The reality is, according to the Census Bureau, we are 19th highest for spending, 14th smallest in population, 15th in geographic size and the eighth smallest state in terms of population density.”
He added, “We have some areas of the state, like in the Sandhills, where we might only have four to 10 kids graduate. Density is pretty relevant in cases like that.”
Spatz also showed the Rotarians data of Nebraska’s contribution to education, and the local contribution to education, compared to surrounding states and the national average. He said the national average is about balanced for state and local support for education.
“However, Nebraska depends heavily upon the local taxpayers to fund education, versus our surrounding states and the entire nation,” he said. “Nebraska is 49th in the nation for state support for local education, meaning we depend upon the local taxpayers to fund it.”
Spatz said the state ranking 50th in the nation for state support for education is New Hampshire, a state that does not have an income tax. The other states with more than 50 percent of their total education funding coming from local taxpayers are Connecticut, Illinois, Maryland, Massachusetts, Maine, New Jersey, New York, Pennsylvania and Rhode Island.
“What do we have in common with those states from an economic perspective?” Spatz said. “To me, Nebraska really stands out in all of these states in that we are a Midwestern state that is dependent upon the agriculture industry.”
When it comes to state revenue, he said that in 2012 and 2013, revenue was coming into the state “pretty well” since commodity prices were “a lot better than they are now.” However, over the last few years, state revenue has decreased.
Spatz showed the Rotarians a chart to show where the money is going in the state of Nebraska. He said investments in K-12 education, special education and higher education have decreased in recent years, while expenses in corrections, child welfare, courts and Medicaid have increased.
“I hear regularly that government should be run more like a business,” he said. “I don’t disagree with that, but if this is your business model, where your expenses are going up and your investments are going down, that is a disastrous business model. If this trend doesn’t bend, how does the property tax issue get better?”