The Nebraska Supreme Court Friday declared the common property tax levy of the Learning Community constitutional.
The ruling is a victory for the Omaha and Bellevue school officials who fought to save the shared property tax system as crucial to their districts' long-term financial health.
The 36-page opinion disappointed some suburban Omaha school officials, dashing their hopes that the court would strike a blow to the 11-district education cooperative created by lawmakers in 2007.
The court rejected the argument of the Sarpy County Farm Bureau and two landowners that the levy, which redistributes property taxes among districts, violates the Nebraska Constitution's prohibition on property taxes for a state purpose.
The court said the levy serves a primarily local purpose.
"The legislative history makes it clear that the Learning Community legislation was enacted to resolve specific, local problems and that the predominant purpose of the legislation was not to benefit the state as a whole," judges said.
The court also dismissed plaintiffs' arguments that the taxes were unconstitutional because they were not applied uniformly and represented an unconstitutional taking of tax revenue from one district for the benefit of another.
Lorraine Chang, chairwoman of the 21-member Learning Community Council, said the ruling removes an obstacle that had hung over the education cooperative.
"Now nothing is standing in our way to really do the hard work of working together in collaboration with one another. It's not a question of whether we should do that, I think it's now how can we move forward together."
Freddie Gray, president of the Omaha school board, said Omaha Public Schools officials are happy and satisfied by the ruling, which she said allows the Learning Community to continue its mission of helping kids.
"I'm very happy that the Supreme Court understood the question before them, which was the question of equity and equal access for all kids," she said.
Critics said they will continue to press for changes in the Learning Community, which they have described as ineffective at raising achievement, unfair to some districts and a waste of resources.
Millard school board member Mike Pate said he's surprised and disappointed by the ruling.
"That doesn't change my opinion of what I think is a layer of government that doesn't need to exist," Pate said. "I'm still going to fight for elimination of the Learning Community for taxpayer interests, more than anything."
Rick Black, superintendent of the Papillion-La Vista Public Schools, said the common levy is only one of his concerns.
"I think there's still several questions regarding the legislation that this didn't answer," Black said.
He noted escalating costs for transporting kids between districts under the open-enrollment diversity plan, the unwieldy governance structure and that the Learning Community law is "specialized legislation" imposed on the 11 metro districts.
Lawmakers created the common levy to address Omaha officials' concerns that stagnation of their tax base over time would leave them financially behind the districts at the edge of the metro.
Those districts have more agricultural land and, when the Learning Community was created, were seeing more economic development. Nearly three out of four students in the Omaha district qualify for federal lunch subsidies.
Lawmakers gave the Learning Community Council authority to levy 95 cents per $100 of property value on all land in Douglas and Sarpy Counties and part of Washington County. The money raised is distributed to member school districts based on their needs, which are determined by a state funding formula that takes into account enrollment, poverty and other factors.
The Sarpy County Farm Bureau and landowners Ron Woodle and John Knapp filed a lawsuit in 2010 claiming the levy was unconstitutional.
Last September, a Sarpy County judge ruled the common levy was created for a state purpose and thus violated the constitution. The Learning Community Council appealed, joined by Omaha and Bellevue.
The high court Friday ruled the common levy passed muster on all three constitutional challenges raised by the plaintiffs: that the levy was created to serve a state purpose, that the taxes were not uniformly applied and that the system took money from some districts and gave it to others.
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402-444-1077, joe.dejka@owh.com
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