Lawsuit challenges new tax system

Landowners challenging the constitutionality of a new tax system for schools in Douglas and Sarpy Counties are one step closer to getting an audience with the Nebraska's highest court.

In a rare move, the Nebraska Supreme Court has given conditional approval that allows the Sarpy County Farm Bureau and eight other property owners to file directly with the court a lawsuit challenging the common levy system of Douglas and Sarpy County learning community.

The order, signed by Chief Justice Michael Heavican, means the plaintiffs will not have to start their legal challenge in the lower courts.

The court attached a condition, however: The parties in the lawsuit must agree to the underlying facts of the case by Dec. 2.

That doesn't mean the parties have to agree to the allegations in the complaint, only to the basic facts, but it raises the prospect that a reluctant party could hold up the process by not agreeing.

The plaintiffs' attorney, former Nebraska Attorney General Don Stenberg, has said the facts are not in dispute.

But Elizabeth Eynon-Kokrda, an attorney representing the Omaha Public Schools, said she thinks districts will look carefully at the facts before agreeing to them. OPS is one of 11 school districts in the learning community named as defendants.

Also named as defendants are the learning community, the State of Nebraska, Sarpy County, Sarpy County Treasurer Rich James, the Nebraska Board of Education and several other state officials.

The Nebraska Legislature created the learning community to improve education in the metropolitan area after a series of border fights between school districts and allegations from Omaha Public Schools officials that the state was providing insufficient funding for educating kids in high-poverty areas.

The learning community council this summer imposed two levies on taxpayers in 11 metro-area school districts: one levy for operations and the other for buildings. Through those common levies, at least some property taxes will be funneled from suburban districts to Omaha to help educate disadvantaged youths.

The legal challenge alleges that the levies violate a Nebraska constitutional prohibition against collecting property taxes for a state purpose. The plaintiffs also contend that the levies are not uniformly applied and put an unequal tax burden on some districts for the benefit of others.

The lawsuit does not challenge the learning community's right to exist.

Eynon-Kokrda said she believes that the learning community is constitutional. She said she did not know whether OPS would agree to the facts as stated in the lawsuit. She said she expected to begin reviewing them with OPS officials today.

Both attorneys said the court has given the parties a tight window, especially because of next week's Thanksgiving holiday.

In its order, the court said it would issue a final order to hear the case after receiving and approving the facts agreed to by the parties.

Stenberg said the court's decision to hear the case is rare. The court accepted only four or five original cases during his 12 years as attorney general, he said.

The court's acceptance “sends a very strong message” that the matter is one of great public importance that needs to be decided quickly, Stenberg said. “It's in the interest of all parties here, and especially the school districts, to get it decided quickly.”

He said, however, that the court's interest in a quick decision should not be seen as a favorable sign to his clients.

Eynon-Kokrda said it's not clear that the court will ultimately take the case, especially since the court set a high bar by asking the parties to agree unconditionally to the facts.

Both attorneys said it's not unusual for the court to ask for the parties to stipulate to the facts. The Nebraska Supreme Court is an appellate court, and it's not set up to conduct trials like lower courts.

Contact the reporter:

444-1077, joe.dejka@owh.com

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