News Release: Tax Cuts Would Come at Great Cost to Educating Nebraska Children

News Release: Tax Cuts Would Come at Great Cost to Educating Nebraska Children

March 29, 2012

The tax cut package the Legislature is debating would deal a devastating blow to K-12 education and still not close the state’s budget deficit, a new analysis from OpenSky Policy Institute finds.

The proposed tax cuts (LB 970) will reduce the amount of funding available for K-12 education, which has already suffered significant cuts in recent years.

“K-12 funding has endured huge cuts over the last few years, and the tax cuts will make it that much harder to return funding to pre-recession levels.  In the meantime, enrollment is growing and the number of teachers in our schools is shrinking.  That’s the wrong direction for competing in the 21^st century economy.” said Renee Fry, executive director of OpenSky Policy Institute.

Because of how the legislature has dealt with budget shortfalls in recent years, the cost of the proposed tax cut will be paid for by property tax increases in many districts.  This means a $60 property tax increase for a $150,000 house.  For most families, their property tax increase will be larger than their income tax cut.

“It is hard to see how the legislature can pass a balanced budget in the next biennium without continuing to increase property taxes,” said Fry.

Furthermore, the reductions to K-12 spending being discussed to pay for the tax cuts would still leave a deficit of between $200 million and $250 million.

“Cuts to K-12 education alone won’t address the deficit we’re facing, but they will increase our property taxes and increase class sizes,” said Fry  “That leaves higher education and roads – crucial investments for creating jobs and rebuilding Nebraska’s economy – still on the chopping block.”

 

OpenSky Policy Institute is a non-partisan, data-driven think tank focused on tax and budget policy in Nebraska.  Our mission is to improve opportunities for every Nebraskan by providing impartial and precise research, analysis, education, and leadership.

 

Contact:

Renee Fry, executive director

OpenSky Policy Institute

rfry@openskypolicy.org, (402) 250-4518