Some Lancaster County property taxpayers could see the amount they pay to support Southeast Community College jump by as much as 40% next year under a plan that was preliminarily approved by the SCC Board of Governors last week.
That dramatic increase in property taxes across SCC’s 15-county service area, and particularly in Lancaster County, which provides half of SCC’s $79 billion taxable value, is the result of two factors — a 15.3% average increase across the SCC region (23% in Lancaster County) in property tax valuations and the board’s intention to raise SCC’s tax levy to 11.25 cents per $100 of valuation, the maximum allowed under state law.
The real reason for the increase, however, is the change in how Nebraska’s six community colleges will be funded in the future. Under Gov. Jim Pillen’s plan, which was approved by the Legislature this year, SCC and other community colleges will lose their ability to levy local property taxes beginning in 2026-27, replacing that funding with state tax dollars.
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That plan, intended to provide property tax relief, will create a “Community College Future Fund,” a cash fund to be automatically funded by the Legislature every year. And — here’s the rub for the increase — the level of each college’s funding will be based on the levy set for the 2023-24 fiscal year.
So, in order to provide maximum future funding and prepare for annual 3.5% increase from state tax dollars that will slow growth and likely make it difficult, if not impossible to provide new programs and hard-to-fund existing offerings without tuition increases, SCC will have to raise its levy to the maximum level this year.
The board, which voted 10-0 with one abstention, argued that setting the maximum level is the most responsible action it can take, for the college, for students and for the community.
Particularly, Chairman Neal Stenberg of Lincoln said requesting any less than the maximum property tax levy now could result in significant future tuition increases that could result in enrollment losses, detrimental to SCC’s “open-access” mission and the local workforce that depends on the college’s training programs.
“We’ve got one chance to get this right, and if we mess it up, it won’t be just students that suffer, but the community will suffer,” Stenberg said. “I know it’s not an easy decision.”
The optics of an increase to the maximum levy aren’t good, and, with the jump in valuations, the unavoidable timing of the levy increase couldn’t be worse. While not directly analogous, it should be noted that a $369 million SCC bond issue was resoundingly rejected in the 2016 election.
That said, SCC is essential for the future of students, either through serving as an affordable, accessible two-year ramp into four-year colleges and universities or through its training programs. And its board felt its hand was forced by Pillen’s plan.
There will be, it should be noted, some relief from the increases via a new tax credit that will return half the property taxes paid to SCC in 2024 and 100% of the taxes paid beginning in 2025.
So property taxpayers’ pain, as it were, will be absorbing half of the SCC share of taxes, about 5.5% per $100 next year. To say the least, that won’t be pleasant. But it probably puts SCC on the most solid ground possible for the coming years.