Hughes looking for better, fairer mix for school funding

McCOOK, Neb. – Funding schools is an issue that State Sen. Dan Hughes has been discussing with his fellow “agriculture senators.” There are several proposals now in committee that try to create a better system for funding education while limiting property tax growth.

Proposals include capping property tax growth at three percent; stipulating that only one-third of education costs can come from the local property tax base, and another that proposes that all funding for basic education must come from the state.

“It’s not necessarily that we’re trying to cut spending for schools, it’s just the mix of where that money comes from that is more of a concern. I’ve never had a big complaint about how the schools in our district spend their money.

“It’s more of where the percentage of revenue stream comes from,” Hughes told local constituents Thursday morning on a Zoom call.

Hughes went on to say that there are 16 school districts in the 44th legislative district, and only two or three receive any state aid. “That’s not right. There needs to be a change in the mix of where that funding comes from.”

Rising agriculture valuations exposed a flaw in the state aid funding formula, and Hughes said that the metropolitan areas are beginning to feel the same pain agricultural landowners have felt in prior years, as valuations of residential properties have increased significantly in the past year.

Hughes echoed Gov. Ricketts's sentiment that if the legislature doesn’t do something about property taxes, “it’s going to get on the ballot and the people will do it for us.”

Sales tax is another subject that Hughes discussed, following questions about LB422, which drops the state sales tax rate from 5.5 percent to 5 percent but adds tax on additional services. Hughes said the governor is adamant about not raising taxes, but he may be willing to look at broadening the base and lowering the rate.

“I have no problem with that,” Hughes said. “We’ve exempted several things from our sales tax base that are taxed in other states.” Constituents pointed out that Nebraska has become more of a service economy. Hughes agreed, saying “we’ve allowed our sales tax base to erode tremendously.”

He also commented that he felt the fairest tax is the consumption tax, where the person that is the ultimate user of the product or the service pays the tax, as long as there are allowances made for low-income individuals.

Hughes said that he had been in discussion with officials from Nebraska Game and Parks concerning LB336, which would allow additional fees to out-of-state visitors to Lake McConaughey and Lake Ogallala to be used for structural improvements at those facilities.

“I think we’ve come up with a solution that will benefit all state recreation areas by increasing the out-of-state park permits to a level that generates some additional funds for improvements. I think we’ve turned the corner in getting the commission itself, and hopefully, the administration, to take more of an interest in the recreation areas outside of Mahoney State Park.”

Constituents also asked Hughes to support LB243, which provides scholarships to community college students for high demand occupations.

Sen. Hughes said half-day floor debates begin February 16 through the end of the month. Hearings should be wrapped up by March 4, and then full-day debates will begin. Each of the 684 bills introduced gets a hearing. “We try not to discourage public participation because it is important,” Hughes said.

Things have been adjusted this year due to COVID, allowing participants to attend via Zoom or through NETV. Constituents encouraged Hughes to continue to allow remote access to the legislative process via technology, which makes it more convenient for western Nebraska to participate.

“It all takes money. That’s the challenge we’re having now,” Hughes said.