An eastern Nebraska school district cannot reverse the transfer of several properties to the tax rolls of a neighboring school district, the Nebraska Supreme Court ruled Friday.
Friday's decision was the second time the high court looked at East Butler Public Schools' challenge after several residents transferred their land and property to the Wahoo school district for taxing purposes in a process called freeholding.
The property owners were given permission in 2010 by the Saunders County Freeholder Board to transfer their property, about the same time the school district was formed by merging East Butler and Prague school districts.
Freeholding applies only to land in a K-12 district with 60 or fewer high school students. Land can be transferred only if another school district is within 15 miles and the landowner's district has voted to raise school taxes above a state-imposed cap.
The landowners argued they had met those requirements, but East Butler said the state approved its reorganization before the freehold petitions were approved. The merger saw the new district's high school enrollment jump to more than 100 students, and the new district did not exceed the state school tax cap, making the land ineligible to be transferred to the Wahoo School District's tax rolls, district officials said.
East Butler's claim cited a law that says among separate equivalent proceedings related to the same subject matter, the one filed “prior in time is prior in jurisdiction.”
East Butler officials had estimated that the transferred property was valued at more than $2 million, amounting to a loss of more than $21,000 per year to the East Butler district.
Last year, the Nebraska Supreme Court reversed a lower court's decision that the school district had not filed a timely appeal, sending the case back to Saunders County District Court and giving East Butler hope that it might reverse the transfers and recoup the lost tax revenue.
But the lower court again rejected East Butler's claims — upheld Friday by the Nebraska Supreme Court — saying the “prior in time” claim doesn't apply because the school merger and freehold petitions were not equivalent proceedings.
“We're glad that it's finally done,” landowners' attorney Maureen Freeman-Caddy said. “We've been to the Nebraska Supreme Court twice now on this matter. This should be the end of it.”
Rex Schultze, an attorney for the school district, did not immediately return a message Friday seeking comment.
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