Extra money belongs to the Omaha taxpayer
Since I joined the Omaha City Council in 2001, I’ve been passionate about 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.