Lincoln Public Schools was not required to participate in last week's joint public hearing on local property taxes because of an exception in LB644, the law that created the new hearing process.
The "Truth in Taxation" law requires local taxing entities to notify taxpayers and take part in a public hearing if their year-to-year property tax request increases by 2% or more.
This year, the Lincoln school district's total tax request for the general fund and other pools of money like the 2020 bond fund is projected at $345,471,356, a 3.78% increase from the year before.
So, how did the district keep its name off the pink postcards mailed to residents and avoid last week's public hearing, while officials from Southeast Community College, Waverly Public Schools, Raymond Central Public Schools and the city of Hickman had to attend?
It's because of an exception in the law — created through a bill from Sen. Ben Hansen of Blair — which allows political subdivisions to account for the percentage growth in a district's real property value.
The Lancaster County Assessor's Office determines that percentage by dividing a district's real property growth value — which includes things like new homes and commercial buildings, building additions and annexations — by the taxing entities' total real property valuation from the prior year, according to LPS Director of Budget and Finance Kim Schmidt.
Within LPS, new properties were valued at $562.5 million, adding to a total valuation of taxable property in the district of $26.2 billion. The real property growth of 2.14% was added to the 2% allowance included in the bill, meaning LPS was allowed to increase its property tax request by up to 4.14% and avoid being included on the pink postcards.Â
Last week's public hearing for government entities that surpassed the 2% growth threshold was attended by dozens of people, many of whom were critical of how property taxes are collected and used. Many pointed to increases in their property valuations, which lead to higher taxes when political subdivisions benefiting from the higher valuations don't decrease tax levies.
The bill that prompted the pink postcards does not exempt valuation increases from the 2% growth calculation.
While LPS' tax request is growing, its tax levy is expected to decrease slightly because of the growth in property values across the district this year.
LPS' tax levy will drop about a third of a cent, to $1.222 per $100 of valuation. The property tax revenue funds general operations, bond debt repayments and the Educational Service Unit.
SCC, which held its tax levy flat, still found its name on the pink postcards because its overall property tax request increased by more than the 3.5% allowed under LB644, President Paul Illich said. SCC covers a 15-county area where its tax base grew more because of property revaluations than new commercial buildings or housing subdivisions.
Still, for the majority of taxpayers in Lincoln whose property valuations held steady, their taxes paid to fund the community college system will not change. That "change" of $0 was reflected on the pink postcards they received.
While Illich said SCC promotes transparency, the postcard "probably was confusing" to taxpayers, many of whom contacted the college asking for more information.
At Waverly Public Schools, the district's tax request is projected to grow by more than 6%, well above the allowable growth percentage of 3.72% the district had calculated.
Mikal Shalikow, the district's business manager, said LB644 makes it more difficult for school boards to complete the budget process in time, adding that schools are already required to hold property tax request hearings at the local level.
"I think we're already transparent enough," he said. "We already hold this meeting at the local level, so I'm not quite sure what that did for more transparency. We're always willing to talk to people about taxes."
Waverly was set to hold a budget and property tax request hearing Monday night. And SCC planned to hold another budget hearing Tuesday.
The LPS Board of Education, which was also set to hold a property tax request and budget hearing Monday, will vote to approve its $489.9 million budget at Tuesday's regular meeting.