Southeast Community College President Paul Illich says that a $369 million bond used to renovate aging buildings would require a modest property tax increase.

DALLAS -- The Nebraska Farm Bureau says a community college's $369 million bond question on the November ballot would lead to a massive property tax increase on farmers, business, and homeowners in southeast Nebraska.

Southeast Community College, a two-year college that serves a 15 county-area of southeast Nebraska, is asking voters to approve the issuance of general obligation bonds to finance the demolition, new construction, renovation of projects at its three campuses in Beatrice, Milford and Lincoln.

Under the plans laid out in SCC's facilities master plan, roughly $127 million of the $369 million bond issue would go toward new construction at the Beatrice campus; $88 million would be used to improve the Milford site; while the remainder would pay for improvements to SCC's Lincoln campuses.

If passed, the tax levy for property owners in SCC's district could increase by 3.9 cents per $100 of property valuation which translates into a $39 annual tax increase for the owner of a home valued at $100,000 over the 30-year term of the bonds, according to college President Paul Illich.

The Nebraska Farm Bureau is opposed to the proposal because it believes farmers can't afford the increase.

"The message we've heard from members has been clear. This SCC proposal is too big, too expensive, and too risky," bureau president Steve Nelson said in a press release. "Lumping together numerous projects in a single bond with a price tag that we estimate could top half-a-billion dollars in new property taxes, when all is said and done, is unacceptable."

Nelson said SCC would benefit from a different approach to addressing renovation and facility needs.

"What voters need to understand is that SCC has room under their existing taxing authority to raise additional funds for these types of projects – authority which remains even if the bond referendum passes. We are asking SCC to slow down and consider Nebraska's taxpayers who already pay the 7th-highest property taxes in the country," said Nelson. "SCC would be better suited to look at their existing taxing authority and prioritize projects in smaller, more targeted requests, if warranted."

Illich said community colleges in Nebraska have the taxing authority to levy a maximum 11.25 cents per $100 valuation maximum of which 2% can be used for capital construction.

Illich said that opting to use the existing taxing authority would slow down the upgrades.

"Instead of 10 years we are looking at a 20- year timeline," he said. Stretching out the project would increase construction costs and also presents the risk of higher interest rates over the longer time period, which would also push the costs of the project up, he said.

There is also the risk that community colleges won't have access to the full 11.25 tax levy. Illich said that in each legislative session over the last two years there have been legislative bills introduced that limit access to the full levy. The latest tax levy was set at 9.1 cents, well below the maximum allowed levy of 11.25.

SCC approved a 7.52 cents levy or the 2016-17 fiscal year a slight drop from last year's 7.57 cent levy. Illich said that SCC has one of the lowest tax levies among community colleges in the state.

If the bonding proposal is voted down, the school's backup plan involves maximizing the 2% capital construction levy and to look at different types of public private type partnerships, according Illich. "But both of these funding mechanism are less transparent than the general obligation bond because that requires the vote of the people," said Illich.

SCC has no outstanding debt.

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