Omaha Public Schools Proposes Major Property Tax Increase to Balance Its Budget
by Lewis Thune
(Picture credit OPS)
OMAHA — At a Tuesday evening unveiling of Omaha Public Schools’ preliminary budget for the 2026-2027 school year, Chief Financial Officer Shane Ryan confirmed OPS was requesting a 7.5% levy increase. The effective levy would move from $1.13 to $1.21 per $100 of assessed property value, a proposed hike just two years after the district had succeeded in dropping its rate from 1.21 to 1.10.
Both the prior drop and the recent surge, Ryan explained, stemmed from the same error in the Nebraska Department of Education, which miscalculated and then later corrected the amount of aid the district was eligible for under the Tax Equity and Educational Opportunities Support Act:
“TEEOSA is a very simple formula: Needs (how much you have to spend to educate a student) minus resources (what you collect in property taxes, because that’s the primary funding source) equals state aid.”
While 80% of Nebraska school districts don’t need TEEOSA aid, the needs of Omaha’s large student population considerably outstrip OPS’s tax revenue.
“Those of us that receive TEEOSA aid, such as us with 52,000 students – and a very small footprint for that number of students – can only generate half of our budget, what we need based on the state’s calculation,” Ryan said.
That calculation was the origin of the initially small error.
“There was a change in an internal report at NDE. The finance team that calculates state aid was unaware of the change,” he said.
But when OPS elected to participate in the Community Eligibility Program beginning in 2022, providing free lunch to all students, state aid increased even further.
“It was a very small change when it initially happened, and then when we started providing free lunches to all students district-wide, it had a dramatic effect on state aid,” he said.
And even with the swell in state aid, the error went unnoticed.
“It was November or October of 2022 when we started to think we might see an increase in state aid because of being a CEP district. We actually did reach out and talk with NDE to confirm our expectations, and they did, and so we all thought everything was ok,” Ryan said.
Ultimately, it was Mike Foley’s auditor of accounts office that found the disparity.
“The state auditor’s office came in, they found the error, NDE corrected it,” Ryan said.
Omaha Public Schools received $340 million in state aid for 2025-2026, $30.5 million of which was erroneous. In total, OPS will receive $50.6 million less from the state in 2026-2027 than in the prior year, which the 8 cent increase on Omaha taxpayers will offset with a cushion of $1 million
“Our total tax request is increasing from $409.2 million to $460.9 million,” Ryan said.
The 2026-2027 levy would slightly reduce the year-on-year contribution to the district’s bond fund and give no contribution to its building fund in order to increase its general fund contribution by 13% to the state statutory limit of 1.05 – 87% of its total levy.
Within the general fund, all other expenses are being cut by $6.4 million in order to accommodate a $16 million increase in salaries and benefits for staff.
“We worked diligently with our labor partners, our teachers union, our para-professionals, as well as all the other staff throughout the district to negotiate new contracts for the upcoming school year that still have a salary increase, but not quite as big as it has been for the last couple years” Ryan said.
Citing the “Our Moonshot” OPS goal for all students to read at grade level by 2030, Ryan asked Omaha taxpayers to back teachers and students with this levy hike.
“Now is not the time for draconian budget cuts or class size increases because of teacher reductions,” he said. “We are asking our patrons to continue supporting our students.”
— Lewis Thune is a writing fellow with The Plains Sentinel.