Extra money belongs to the Omaha taxpayer

My first blog post is on an issue that I have been passionate about since I joined the Omaha City Council in 2001 - pension reform.

Recently, we learned that an unexpected $41 million is hitting the coffers of Omaha Public Schools. My first question is why is the money a surprise?  Shouldn't the financial systems and personnel in place have known expense reductions would lead to this enormous amount of savings?  Nonetheless, this situation creates an opportunity to do the right thing - protect the taxpayer.

In 2013, I was one of the first to warn about the state of affairs of the pension system of Nebraska's largest school district. It was flying way under the radar of elected officials, the public and even the media. The system's unfunded liability was growing at a faster rate than the Omaha Police and Fire system. From 2008 to 2013, the unfunded liability grew over 200% and recent reports state the unfunded liability is reaching near $800 million.  So, what does this mean?  It's simple--we have more future pension liabilities than we have the assets to pay them.

Over the last year, Omaha Public School officials and board members have pleaded with the Legislature to help bail out the pension system. To date, the senators haven't bit, but the proposal still looms over the next legislative session. The other option that seems more probable is Omaha Public School officials asking Omaha voters to approve a levy limit override.  Yes, they want Omaha taxpayers to agree to raise taxes on themselves to help fund the pension liability (which was caused by serious mismanagement). 

Given the recent news of extra money flowing to the rainy day fund, Omaha taxpayers should demand that money be used to help fund the pension liability, or the tax levy for public schools should be reduced. This is a lesson for all political subdivisions across Nebraska. We have the seventh-highest property tax rates in the country. Any unexpected windfall associated with expense reduction or valuation increases should be directed right back at the taxpayer. 

Comments

[Laura Ebke]

Congratulations on your first blog post! I'm just getting caught up on reading through all of them.

You make a really important point that everyone ought to consider: excess money collected from taxes is not really "mad money." It's money that has been taken from the taxpayers.

Taxpayers have every reason to expect that their elected officials will see to it that Pension obligations are met--and then give any excess back to those who paid it--not look for new ways to stash it away to spend on who-knows-what....And asking taxpayers outside of Omaha to foot the bill for the pensions would only add to the perception that rural Nebraska just keeps subsidizing "big city schools" vis a vis the current property tax debate.