By Robert Matteson for OpenSky Policy Institute

EDITOR’S NOTE: In recent months, OpenSky has been taking a closer look at school spending in Nebraska. This examination led to the publishing of our recent policy brief that explored some of the key factors that affect how our state’s public schools use their funding. As part of this examination, OpenSky is working with freelance journalist Robert Matteson on some stories that examine various aspects of school spending in Nebraska. In the story below, Robert writes about some of the unique factors and challenges that affect school spending and property taxes in Nebraska’s bedroom communities.

Hickman, a bedroom community that many Lincoln workers call home, was Nebraska’s fastest-growing municipality from 2010-2016. During this period, population increased by about 30%. In February of 2018, Hickman Mayor Doug Hanson told the Lincoln Journal Star that one of the driving forces of growth has been the desire among parents to have their children attend the local public school district — Norris Public Schools – a 2,400-student K-12 district with a unified campus in nearby Firth.

But in November of 2017, the district’s residents voted down a bond measure that would have provided the school district with what then-Norris superintendent John Skretta said was vital funding for important projects.

“It was for basic operational and infrastructure needs that we have,” said Skretta, who left Norris earlier this year to become administrator of Nebraska Educational Service Unit 6. Unlike a 2012 bond issue that passed, no new school building would rise from it. Instead, a heating and air system in need of overhauling and a lagoon wall in need of remediation would have been among the key beneficiaries in the $9.5 million bond. Funding for new baseball and tennis facilities were also voted down in the process. The “no” votes weren’t particularly surprising, Skretta said, because many in the district feel as though they’ve already paid for enough.

“Because of our proximity to South Lincoln, we’re growing and we’re growing substantially,” Skretta said. “We’re growing by 50 to 60 students a year. At a time when our district has grown by 300-plus students over five years, six of the last eight years our state aid has declined.”

This decline has contributed to increased reliance on property taxes to fund the growing district’s needs, Skretta said.

Bedroom communities face unique property tax-school funding challenges

Complaints about high property taxes are common in Norris and other bedroom community school districts that sit in the shadows of Lincoln, Omaha and other Nebraska cities. Many such districts are experiencing rapid growth as increasing numbers of people from nearby cities move in. Such districts also contain significant amounts of agricultural land, which the state’s school funding formula views as a local tax resource. Under the formula, such communities with ample agricultural land are considered capable of funding their schools without a lot of help from the state, which places much of its aid in more urban areas with less property wealth.

Early this decade, agricultural land values spiked and many districts, including Norris, saw their state school support decrease dramatically, and in many cases disappear completely. This shifted more of the school funding load to property taxes, despite the fact that Norris and other bedroom communities were experiencing rapid student growth and increased student needs.

“The urban versus rural thing is an interesting dynamic because Norris is neither, and yet both,” Skretta said.

Rapid student growth a key piece of the bedroom community property tax puzzle

In a survey on school spending conducted by the Nebraska Rural Community Schools Association, Jason Libal, superintendent at the Ashland-Greenwood Public Schools cited growth as one of the biggest drivers of budget decisions.

“Over the past 10 years we have seen an increase of 110 students,” said Libal, whose district sits between Omaha and Lincoln. “To meet this growth, which has been the most dramatic over the past three years, we have increased our staffing level by six full-time employees, one of those being a special education director.”

In his survey response, Cedar Bluffs Bluffs Schools superintendent Harlan Ptomey said his district, which is west of Fremont, has grown from 189 students in 2012 to 450 this year.

“In 2012, we didn’t have a preschool program; now we have two classrooms with 40 each, which means two teachers, plus two paras for that program alone,” Ptomey said. “For the first two years, we had (a grant); now we pay for all of that out of general funds.”

The school has had to add classrooms and make other facility additions to cope with its growth.

Like Norris, Ashland-Greenwood and Cedar Bluffs also saw their state aid decline and property taxes increase as agricultural land prices spiked. This was the case in Louisville, too.

“We have grown just over 110-115 students over the last four years, and we are projected to continue an upward student growth trend for several years,” Superintendent Andrew Farber said. “We are struggling to hire the necessary staff to meet the growth needs due to a lack of funding.”

Decreases in ag valuations over the past two years have been offset some by increases in state equalization aid over that time, but it hasn’t been enough to keep up with the growing community’s needs, Farber said, which means the district – which sits south of Omaha – will increase its property tax levy again this year.

Ag producers express understandable frustration

The combination of low state support and growing pressure on property tax payers in many of these districts leads to frustration that gets directed at the schools and how they spend their money. That leaves school boards and administrators in these districts in a tough spot, Skretta said.

Board members are elected officials who work hard to be good stewards of their district’s money, he said, noting that they do all they can to avoid raising the property taxes that are indeed straining local residents.

“The farmers in our district, they have a righteous anger and a lot of negative sentiment about the burdensome property tax load that they are shouldering,” Skretta said.

State mandates, parent concerns play a key role, too

But the schools also are faced with growing needs, unfunded state and federal mandates and also declining state support, which he said, forces their hands in terms of increasing property taxes. There also is the desire among the district’s parents to ensure the schools offer their children the educational opportunities needed to be successful. And this means instead of asking the school to make cuts, the request from parents is always to increase the school’s offerings, Skretta said.

“In my experience as a superintendent, I have repeatedly and frequently had parents request additional programs and services,” Skretta said. “I’ve never — not once — had a parent come in and demand we stop doing something. If it’s good for kids, people want it.”