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LIBA Opposes LB 478 which allows ESUs to increase property taxes without a vote

The Lincoln Independent Business Association opposes LB 478 which authorizes educational service units (ESU) to issue bonds without a public vote and increases ESU’s levy limit.

LB 478 authorizes ESUs to issue general obligation bonds, paid by property taxes, and increases their levy by $0.01 to pay such bonds.  However, just like any bond paid with property taxes, these bonds fall outside the ESU levy limit.  Therefore, LB 478 allows ESUs to increase their levy twice; once to pay bond and once for a general $0.01 increase above the current levy limit.

In addition, in Class IV and V school districts (Lincoln and Omaha respectively) the ESU governing board is the school district board of education. Effectively, a school board could use LB 478 to circumvent the public vote required when that school district issues bonds, increase its levy, and issue bonds paid outside its mill levy.  This is an alarming proposition at any time but especially with this legislature’s focus on reducing property taxes.

If the true impetus being LB 478 is lack of funding for ESUs to carry out statutorily required services then this legislature should address the true issue by examining the services mandates and funding allocated. Simply increasing the property tax levy limit simply palliates the issue while ignoring the accountability and transparency problems of unfunded mandates.

For these reasons LIBA opposes this bill and would ask this committee to hold or indefinitely postpone LB 478.