It is likely that the Nebraska Legislature will end its 2019 session without any meaningful action on an issue that was heralded as a top priority: high property taxes.
There are two principal reasons why the problem has remained so intractable. One is the “War on Poverty” and its successors, and the other is the way Nebraskans pay for local government.
Over 50 years ago, a prosperous nation turned its attention to a segment being left behind: the poor. Thus was born the War on Poverty of the 1960s.
In rapid order, President Lyndon Johnson presided over an avalanche of social legislation. Included was the establishment of Food Stamps in 1964, then Head Start, Medicare and Medicaid in 1965. Other initiatives included the Job Corps, federal funding for education, and a variety of other anti-poverty programs. In addition, the 50 states began to spend their own money to combat poverty and its effects.
These efforts have produced both successes and failures, as expected. But not expected were the billions and billions of dollars now spent annually by all levels of government, as they address a host of social needs and ills ... some old, some new.
Nebraska is part of these efforts, and the explosion of state money now spent on Medicaid, child welfare, prisons and other demands on government is squeezing the state’s budget. The consequences include less state money available for the one thing that is high on local taxpayer wish lists: property tax relief.
Cities can look to sales taxes for help. Not so counties and school districts. They must rely on property taxes as their main source of funding, though they are still expected to address many of the social needs and problems that are common today. In addition, schools are expected to prepare students to be successful in a world far more competitive than ever before, with educations that are far more expensive than years ago.
Schools, the largest consumers of property taxes, look to state aid for help and relief. But the War on Poverty and its successors are taking state money that could be used for this purpose, and there is no way around it.
Repeated failures to achieve property tax relief are now prompting some new questions. For starters, should property taxes continue to be the primary funding source for local governments and schools?
And if not, what are the alternatives?