Sarpy Cty. Farm Bureau v. Learning Community

CONCLUSION
The decision of the district court is reversed. We remand the
cause to the district court with directions to remand the case to
the PSC to enter an order not inconsistent with this opinion.
R eveRsed and Remanded with diRections.
wRight and stephan, JJ., not participating.
saRpy county FaRm BuReau, a neBRaska nonpRoFit
coRpoRation, et al ., appellees , v. leaRning community
oF douglas and saRpy counties , et al ., appellants ,
and saRpy county tReasuReR, R ich James ,
in his oFFicial capacity, et al ., appellees.
808 N.W.2d 598
Filed February 3, 2012. 	No. S-11-805.
1. Constitutional Law: Statutes: Appeal and Error. Whether a statute is constitu-
tional is a question of law; accordingly, the Nebraska Supreme Court is obligated
to reach a conclusion independent of the decision reached by the court below.
2. Pleadings. A pleading serves to guide the parties and the court in the conduct of
cases, and thus the issues in a given case are limited to those which are pled.
3. Legislature: Municipal Corporations: Taxation: Property. The levy of a
property tax by a local governmental unit should not be treated as a state levy
for state purposes merely because the Legislature has authorized or required the
local governmental unit to make the levy. The converse is also true; where the
Legislature has authorized and required local governmental units to make a prop-
erty tax levy for state purposes, it should not be treated as a local levy for local
purposes merely because it is made by a local governmental unit.
4. Taxation. The fact that a tax is for a governmental purpose does not auto-
matically make it for state purposes rather than local purposes. This is so because
in many, if not most, cases a governmental function may be accurately described
as having both state and local purposes.
5. Statutes: Intent. Where state and local purposes are commingled in a statutory
enactment, the crucial determination is whether the controlling and predominant
purposes are state purposes or local purposes. While this is a judicial ques-
tion, there is no sure test by which state purposes may be distinguished from
local purposes. The court must consider each case as it arises and draw the line
of demarcation.
6. Taxation: Statutes: Legislature: Intent: Evidence. In deciding whether a state
or a local purpose predominates, the language of the statutory scheme is of prime
212 	283 NebrASkA rePOrTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:42 AM CST

importance. A court may also consider the legislative history and evidence in the
record relating to the history of the taxing scheme at issue.
7. Constitutional Law: Statutes: Presumptions. A statute is presumed to be consti-
tutional, and all reasonable doubts are resolved in favor of its constitutionality.
8. Constitutional Law: Statutes: Proof. The burden of establishing the unconstitu-
tionality of a statute is on the one attacking its validity.
9. ____: ____: ____. The unconstitutionality of a statute must be clearly established
before it will be declared void.
10. Constitutional Law: Taxation. The power to tax being a sovereign power,
constitutional provisions relating thereto do not operate as grants of power of
taxation to the government, but are merely limitations on a power which would
otherwise be unrestricted.
11. ____: ____. Constitutional limitations on the power to tax must be strictly
construed.
12. ____: ____. A commutation occurs in violation of the Nebraska Constitution
when tax funds raised in one district are diverted entirely to the benefit of another
district.
13. Constitutional Law: Taxation: Public Purpose. A tax levy does not equal a
commutation merely because the taxing district is broadened to reflect the actual
benefits to the public. So long as all taxpayers receive the benefit of the taxes
they remit, the taxing district passes constitutional muster without offending the
prohibition against commutation.
14. Legislature: Taxation. The Legislature creates a taxing district when it grants
an entity the power to require the county clerk to levy a tax for the support of
the district.
15. Taxation: Valuation: Constitutional Law. The object of Nebraska’s uniformity
clause is accomplished if all of the property within the taxing jurisdiction is
assessed and taxed at a uniform standard of value.
Appeal from the District Court for Sarpy County: william
B. Z asteRa, Judge. reversed and remanded with directions to
dismiss.
Scott e. Daniel and kurth A. brashear, of brashear, L.L.P.,
for appellant Learning Community of Douglas and Sarpy
Counties.
kenneth W. Hartman, elizabeth eynon-kokrda, and kelly
r. Dahl, of baird Holm, L.L.P., for appellant Douglas County
School District No. 1.
Patrick J. Sullivan and benjamin e. Maxell, of Adams &
Sullivan, P.C., for appellant Sarpy County School District
No. 1.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	213
Cite as 283 Neb. 212

Thomas J. Culhane and Matthew V. rusch, of erickson &
Sederstrom, P.C., for appellees Sarpy County Farm bureau,
John knapp, and ron Woodle.
Jeff C. Miller, Duncan A. young, and keith I. kosaki, of
young & White Law Offices, for appellee Douglas County
School District No. 17.
Michael F. Coyle and Patrick S. Cooper, of Fraser Stryker,
P.C., L.L.O., for appellee Douglas County School District
No. 66.
heavican, c.J., connolly, stephan, and mccoRmack , JJ.,
inBody, Chief Judge, and sieveRs and cassel, Judges.
stephan, J.
In 2010, the Learning Community of Douglas and Sarpy
Counties (Learning Community) established a common levy
for the general fund budgets of its 11 member school districts.1
After Sarpy County levied this tax on real property, three tax-
payers brought an action in the district court seeking a declara-
tion that the tax was unconstitutional. They alleged that (1) it
was a property tax for a state purpose,2 (2) it was a commuta-
tion of taxes,3 and/or (3) it violated the requirement that taxes
“be levied by valuation uniformly and proportionately upon all
real property.”4 The Learning Community, each of its member
school districts, and the Sarpy County treasurer were named
defendants in the action. ruling on cross-motions for summary
judgment, the district court declared the Learning Community’s
common levy was unconstitutional as a property tax for state
purposes but did not reach the alternative grounds of alleged
unconstitutionality. The Learning Community and two of its
member school districts appeal. We reverse, and remand with
directions to dismiss.
1 See Neb. rev. Stat. § 77-3442(2)(b) (Cum. Supp. 2010).
2 Neb. Const. art. VIII, § 1A.
3 Id., § 4.
4 Id., § 1.
214 	283 NebrASkA rePOrTS

I. bACkgrOUND
1. leaRning community stRuctuRe
A learning community is a political subdivision authorized
by legislation enacted in 2006.5 each Nebraska city of the met-
ropolitan class is required to establish a learning community
which includes all the school districts having a principal office
in the county where the city of the metropolitan class is located
and all the school districts having a principal office located in
a county that has a contiguous border of at least 5 miles in
aggregate with such city of the metropolitan class.6 In addition,
a learning community may be established at the request of at
least three school boards located outside a metropolitan area,
provided certain requirements are met.7 A learning community
shares the territory of its member school districts.8
When the Legislature enacted the learning community leg-
islation, it amended a statute which had provided that “[e]ach
incorporated city of the metropolitan class . . . shall consti-
tute one Class V school district.”9 The statute currently pro-
vides that each such city “shall contain at least one Class V
School district.”10
A learning community is governed by a coordinating coun-
cil.11 The coordinating council has, among other powers, the
authority to levy a common levy for the general funds and spe-
cial building funds of its learning community’s member school
districts.12 Section 77-3442(2)(b) provides that a learning com-
munity, for each fiscal year, “may levy a maximum levy for the
general fund budgets of member school districts of ninety-five
cents per one hundred dollars of taxable valuation of property
5 See 2006 Neb. Laws, L.b. 1024, § 103 (codified at Neb. rev. Stat.
§ 79-2101 (reissue 2008)).
6 Neb. rev. Stat. § 79-2102 (reissue 2008).
7 Id.
8 § 79-2101.
9 Neb. rev. Stat. § 79-409 (Supp. 2005).
10 § 79-409 (reissue 2008).
11 See § 79-2101.
12 Neb. rev. Stat. § 79-2104(1) and (2) (Cum. Supp. 2010).
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	215
Cite as 283 Neb. 212

subject to the levy. The proceeds from the levy pursuant to this
subdivision shall be distributed pursuant to section 79-1073.”
That section provides as follows:
On or before September 1 for each year, each learn-
ing community coordinating council shall determine the
expected amounts to be distributed by the county treas-
urers to each member school district from general fund
property tax receipts pursuant to subdivision (2)(b) of sec-
tion 77-3442 and shall certify such amounts to each mem-
ber school district, the county treasurer for each county
containing territory in the learning community, and the
State Department of education. Such property tax receipts
shall be divided among member school districts propor-
tionally based on the difference of the school district’s
formula need calculated pursuant to section 79-1007.11
minus the sum of the state aid certified pursuant to
section 79-1022 and the other actual receipts included
in local system formula resources pursuant to section
79-1018.01 for the school fiscal year for which the distri-
bution is being made.
each time the county treasurer distributes property tax
receipts from the common general fund levy to member
school districts, the amount to be distributed to each dis-
trict shall be proportional based on the total amounts to be
distributed to each member school district for the school
fiscal year. each time the county treasurer certifies a
property tax refund pursuant to section 77-1736.06 based
on the common general fund levy for member school dis-
tricts or any entity issues an in lieu of property tax reim-
bursement based on the common general fund levy for
member school districts, including amounts paid pursuant
to sections 70-651.01 and 79-1036, the amount to be cer-
tified or reimbursed to each district shall be proportional
on the same basis as property tax receipts from such levy
are distributed to member school districts.13
Section 77-3442(2)(g) provides that a learning community
may, each fiscal year, “levy a maximum levy of two cents on
13 Neb. rev. Stat. § 79-1073 (Cum. Supp. 2010).
216 	283 NebrASkA rePOrTS

each one hundred dollars of taxable property subject to the
levy for special building funds for member school districts.
The proceeds from the levy pursuant to this subdivision shall
be distributed pursuant to section 79-1073.01.” Neb. rev. Stat.
§ 79-1073.01 (Cum. Supp. 2010) provides:
Amounts levied by learning communities for special
building funds for member school districts pursuant to
subdivision (2)(g) of section 77-3442 shall be distributed
by the county treasurer collecting such levy proceeds to
all member school districts proportionally based on the
formula students used in the most recent certification
of state aid pursuant to section 79-1022. each time the
county treasurer certifies a property tax refund pursuant
to section 77-1736.06 based on the levy of a learning
community for special building funds for members [sic]
school districts or any entity issues an in lieu of property
tax reimbursement based on the levy of a learning com-
munity for special building funds for member school
districts, including amounts paid pursuant to sections
70-651.01 and 79-1036, the amount to be certified or
reimbursed to each district shall be proportional on the
same basis as property tax receipts from such levy are
distributed to member school districts.
Any amounts distributed pursuant to this section shall
be used by the member school districts for special build-
ing funds.
A levy by a learning community limits the permissible lev-
ies by its member school districts. Subject to certain exceptions
not applicable here, a school district which is not included
within a learning community is authorized to “levy a maximum
levy of one dollar and five cents per one hundred dollars of
taxable valuation of property subject to the levy.”14 However,
school districts which are members of a learning community
“may levy for purposes of such districts’ general fund budget
and special building funds a maximum combined levy of the
difference of one dollar and five cents on each one hundred
14 § 77-3442(2)(a).
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	217
Cite as 283 Neb. 212

dollars of taxable property subject to the levy minus the learn-
ing community levies.”15
Originally, a learning community was required to distribute
tax receipts directly to its member school districts.16 but that
system of distribution was changed by legislative amendment17
as a cost-saving and efficiency measure. Currently, the county
treasurer for each county containing territory in a learning
community distributes funds to the member school districts
from the levy tax receipts.18
The Learning Community involved in this action was estab-
lished in 2009. It has its own separate and distinct bounda-
ries, but shares its territory with the public school districts in
Douglas and Sarpy Counties as follows: Douglas County school
districts Nos. 1 (Omaha Public Schools), 10 (elkhorn Public
Schools), 15 (Douglas County West Community Schools), 17
(Millard Public Schools), 54 (ralston Public Schools), 59
(bennington Public Schools), and 66 (Westside Community
Schools); and Sarpy County school districts Nos. 1 (bellevue
School District), 27 (Papillion-La Vista Public Schools), 37
(gretna Public Schools), and 46 (South Sarpy District 46).
each member school district retains its separate status as a
political subdivision, as well as its boundaries and system
of administration.
Prior to adopting its 2010-11 budget, the Learning Community
solicited input from its member school districts and con-
ducted public hearings on the proposed budget and levy. On
September 16, 2010, the Learning Community’s coordinating
council adopted a 2010-11 budget which included a common
levy for the general funds of its member school districts of
$0.95 per $100 of taxable valuation of property subject to the
levy. The common levy for special building funds of member
school districts was set at zero. The council certified the levy
15 § 77-3442(2)(c).
16 See §§ 79-1073, 79-1073.01, and 79-2104(1) and (2) (reissue 2008).
17 2009 Neb. Laws, L.b. 392, §§ 13 to 16.
18 Neb. rev. Stat. § 79-1041 (Cum. Supp. 2010).
218 	283 NebrASkA rePOrTS

to the Douglas and Sarpy Counties boards of equalization19
and certified the expected distributions from revenues gener-
ated by the levy to the member school districts, the affected
county treasurers, and the State Department of education.20 On
October 5, 2010, the Sarpy County board of Commissioners
sitting as the board of equalization of Sarpy County levied
property taxes which included the Learning Community’s com-
mon levy.
2. distRict couRt pRoceedings
This action was commenced on December 21, 2010, in the
district court for Sarpy County by Sarpy County Farm bureau,
John knapp, and ron Woodle (collectively the taxpayers).
Sarpy County Farm bureau is a nonprofit corporation with its
principal place of business in Sarpy County and pays property
taxes in that county. knapp and Woodle are residents of Sarpy
County and pay property taxes there. The taxpayers sought a
declaratory judgment that the Learning Community’s common
levy was unconstitutional, because it was a property tax for
state purposes,21 because the tax and its distribution consti-
tuted a commutation of taxes,22 and because it was not levied
uniformly and proportionately.23 Named defendants were the
Learning Community, each of its member school districts,
and the Sarpy County treasurer. The taxpayers prayed that
§§ 77-3442(2)(b) and 79-1073 be declared unconstitutional,
that the tax levies and their distribution be declared void and
illegal, and for such other relief as the court determined to be
just and equitable.
The taxpayers subsequently filed a motion for summary
judgment. Three of the defendants, namely, the Learning
Community, Douglas County School District No. 1 (Omaha
Public Schools), and Sarpy County School District No. 1
19 See Neb. rev. Stat. § 13-508 (Cum. Supp. 2010).
20 See § 79-1073.
21 Neb. Const. art. VIII, § 1A.
22 Id., § 4.
23 Id., § 1.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	219
Cite as 283 Neb. 212

(bellevue School District) filed cross-motions for summary
judgment. After conducting an evidentiary hearing, the district
court sustained the taxpayers’ motion. It determined that the
Learning Community’s common general fund levy made pur-
suant to § 77-3442(2)(b) and distributed pursuant to § 79-1073
was an unconstitutional property tax levied for a state purpose.
It reasoned the legislative history showed that learning com-
munities were created to pool the resources of the member
districts in order to allow for a redistribution of tax dollars.
Although not requested to do so, the district court also deter-
mined that the statutes authorizing learning communities to
levy for special building funds of member school districts24
and to distribute such revenues25 were unconstitutional for the
same reason. The district court did not reach the taxpayers’
alternative constitutional claims. Accordingly, the district court
declared §§ 77-3442(2)(b) and (g), 70-1073, and 70-1073.01
to be “unconstitutional as in violation of Neb. Const. art. VIII,
§ 1A.”
The 	Learning 	Community, 	Omaha 	Public 	Schools, 	and
bellevue School District (collectively appellants) perfected a
timely appeal. We granted the Learning Community’s motion
to stay the order and judgment of the district court pend-
ing resolution of the appeal and a second motion by the
Learning Community to expedite the appeal. Separate briefs
and notices of constitutional question were filed by each of
the three appellants. The appellee taxpayers filed a joint brief.
Appellee Douglas County School District No. 17 (Millard
School District) filed a separate brief taking no position on the
merits of the appeal but urging this court to adopt a prospec-
tive remedy if it determines that any of the challenged statutes
are unconstitutional. Douglas County School District No. 66
(Westside Community Schools) did not file a brief but advised
the court by letter that it joined in Millard School District’s
request. No other party has appeared on appeal.
24 § 77-3442(2)(g).
25 § 79-1073.01 (Cum. Supp. 2010).
220 	283 NebrASkA rePOrTS

II. ASSIgNMeNTS OF errOr
Appellants assign, restated and summarized, that the district
court erred in (1) finding the common general fund levy was
an unconstitutional property tax for a state purpose, (2) find-
ing unchallenged statutes to be unconstitutional, (3) granting
the taxpayers’ motion for summary judgment, and (4) denying
appellants’ motion for summary judgment.
III. STANDArD OF reVIeW
[1] Whether a statute is constitutional is a question of law;
accordingly, we are obligated to reach a conclusion indepen-
dent of the decision reached by the court below.26
IV. ANALySIS
1. pReliminaRy matteRs
[2] before addressing the merits of the constitutional issues
presented in this appeal, we consider two preliminary mat-
ters raised by appellants. First, they argue that because the
district court was not asked to rule on the constitutionality of
§§ 77-3442(2)(g) and 79-1073.01, which authorize a learn-
ing community’s common levy for the special building funds
of its member districts, it erred in doing so. We agree. The
constitutionality of these statutes was not raised in the com-
plaint. A pleading serves to guide the parties and the court in
the conduct of cases, and thus the issues in a given case are
limited to those which are pled.27 A sua sponte determination
by a court of a question not raised by the parties may violate
due process.28 We hold that the district court’s conclusion that
§§ 77-3442(2)(g) and 79-1073.01 are unconstitutional is void.
because the district court lacked authority to address this issue,
we likewise lack such authority, and our analysis is limited to
the constitutionality of §§ 77-3442(2)(b) and 79-1073.
26 Kiplinger v. Nebraska Dept. of Nat. Resources, 282 Neb. 237, 803 N.W.2d
28 (2011); Yant v. City of Grand Island, 279 Neb. 935, 784 N.W.2d 101
(2010).
27 See Spanish Oaks v. Hy-Vee, 265 Neb. 133, 655 N.W.2d 390 (2003).
28 See id.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	221
Cite as 283 Neb. 212

Second, appellants urge us not to reach the constitutional
issues presented on the premise that they are nonjusticiable
political questions. Appellants contend that the taxpayers’ com-
plaints about the common fund levy are simply challenges to
policy decisions made by the Legislature about the appropri-
ate structure of and funding for public education. According
to appellants, this is the heart of the legislative policymaking
function and this court is not a proper forum for resolving such
broad and complicated policy decisions. We agree that broad
policy decisions are the Legislature’s prerogative. but here, we
are specifically asked to determine whether the Legislature’s
chosen means of implementing a particular policy violate
specific provisions of the state Constitution. This is a judicial
function which this court is obligated to perform.29
2. pRopeRty tax FoR state puRposes
(a) general background and Case Law
Article VIII, § 1A, of the Nebraska Constitution provides:
“The state shall be prohibited from levying a property tax
for state purposes.” This provision was first adopted in 1954
and was amended to its present form in 1966 after Nebraska
adopted a state sales and income tax.30 The purpose of the pro-
vision was to require the State, after it adopted sales and income
taxes, to leave the realm of property taxation.31 Accordingly, no
state interest or function can be financed by means of property
taxes; all “traditional” state interests and functions must be
financed by means other than property taxes.32
29 See Davis v. General Motors Acceptance Corp., 176 Neb. 865, 127 N.W.2d
907 (1964).
30 See, State ex rel. Western Technical Com. Col. Area v. Tallon, 196 Neb. 603,
244 N.W.2d 183 (1976), citing State ex rel. Western Nebraska Technical
Com. Col. Area v. Tallon, 192 Neb. 201, 219 N.W.2d 454 (1974); State ex
rel. Meyer v. County of Banner, 196 Neb. 565, 244 N.W.2d 179 (1976).
31 Garey v. Nebraska Dept. of Nat. Resources, 277 Neb. 149, 759 N.W.2d
919 (2009); Swanson v. State, 249 Neb. 466, 544 N.W.2d 333 (1996).
32 Swanson, supra note 31, 249 Neb. at 476, 544 N.W.2d at 340.
222 	283 NebrASkA rePOrTS

We first addressed article VIII, § 1A, in Craig v. Board of
Equalization.33 In that case, a taxpayer alleged that a statute
requiring the county to levy property taxes to pay for the care
of its indigent mentally ill residents in state institutions was
unconstitutional. Noting a prior case in which we held that
while the institutions were run by the State, “‘maintenance of
the insane is not necessarily a state burden, and therefore it is
within the power of the legislature to require that the tax be
levied and collected by each county for the purpose of reim-
bursing the state,’”34 we concluded that although the statute
commingled state and local purposes, it did not contravene the
prohibition of article VIII, § 1A.
Later the same year, this court decided R-R Realty Co.
v. Metropolitan Utilities Dist.35 The challenged state statute
required counties and municipalities to levy a tax on property
within a metropolitan water district in order to provide fire
hydrants. We rejected the taxpayer’s argument that the tax
was levied for a state rather than a local purpose, stating: “If
we were to accept the reasoning urged by the plaintiff, any
property tax for governmental purposes levied by a city or
county under legislative directions fixing a maximum amount
and a maximum levy would become a tax levy by the state for
state purposes.”36
In Kovarik v. County of Banner,37 a county alleged that
requiring it to use county funds from property tax revenue
to pay attorneys for defending indigent county residents was
a state purpose and violated article VIII, § 1A. Although we
agreed that the services did benefit “countless people, not only
in the county, but also in the state and country, and perhaps in
the entire world,” we also determined that the “mere chance
that the collective benefits may be universal does not alter
33 Craig v. Board of Equalization, 183 Neb. 779, 164 N.W.2d 445 (1969).
34 Id. at 783, 164 N.W.2d at 447, quoting State v. Douglas County, 18 Neb.
601, 26 N.W. 378 (1886).
35 R-R Realty Co. v. Metropolitan Utilities Dist., 184 Neb. 237, 166 N.W.2d
746 (1969).
36 Id. at 240, 166 N.W.2d at 748.
37 Kovarik v. County of Banner, 192 Neb. 816, 224 N.W.2d 761 (1975).
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	223
Cite as 283 Neb. 212

the fact there is a definite and substantial benefit accruing to
the counties.”38 We noted that historically, counties had been
responsible for funding criminal prosecutions, and found noth-
ing about the constitutional amendment which indicated an
intent to remove that historical responsibility from counties.
We concluded that the purpose was predominantly local in
nature and that the law did not violate the constitution.
Our first case holding a statute to be in violation of arti-
cle VIII, § 1A, was State ex rel. Western Nebraska Technical
Com. Col. Area v. Tallon (Tallon I).39 In that case, the Legislature
attempted to group previously independent junior and technical
colleges into a “new statewide independent system of techni-
cal community colleges.”40 A state board was to control the
new system, and it was given power over budget, qualifica-
tions and credentials of instructors, training program content,
and admission policies. The system was to be financed in part
by a property tax levy. In addressing whether this tax violated
article VIII, § 1A, we noted:
The fabric of an educational system is woven of many
threads. It is impossible to separate the threads which
proclaim a state purpose from those which proclaim a
local purpose and difficult to pick them out or identify
them in the overall pattern. It is transparently clear that
the State has, and should have, an abiding purpose to fur-
ther all educational opportunities for its citizens, whether
the particular institution or system is controlled, operated,
and financed by local units of government under the pro-
visions of state law, or whether it is controlled, operated,
and financed directly by the state government, also under
the provisions of state law.41
but noting that our task was to discern whether the primary
purpose of the new system was a state purpose or a local pur-
pose, we reasoned:
38 Id. at 824, 224 N.W.2d at 766.
39 Tallon I, supra note 30.
40 Id. at 204, 219 N.W.2d at 456.
41 Id. at 209-10, 219 N.W.2d at 459.
224 	283 NebrASkA rePOrTS

Under the act with which we are concerned here, the
State has assumed the direct control of major policy
decisions which affect the operation of each of the
seven community college areas, and the statute reflects
a purpose to control the operation of all seven areas
for the benefit of the residents of the state as a whole.
The provisions requiring that the tuition in any technical
community college area for any resident of the State of
Nebraska shall be the same as for a resident of the par-
ticular area is a strong indication of the legislative pur-
pose to benefit residents of the entire state as contrasted
to residents of particular local areas. The direct control
by the State over capital expenditures . . . together with
the complete and direct control of the individual budget
of each technical community college area, demonstrate
the dominance of the State as opposed to the local areas
in all major matters of control and operation of the statu-
tory system.42
After our decision in Tallon I, the Legislature took another
approach to creating a system of technical colleges, and its
new statutory procedure came before us in State ex rel. Western
Technical Com. Col. Area v. Tallon (Tallon II).43 The new pro-
cedure no longer centralized state control, but instead gave
technical community college areas many of the same powers
as other political subdivisions, so that they operated much the
same way as public school districts, “on a strictly local basis
subject only to guidelines laid down by the Legislature.”44 We
concluded that this new system, which authorized the area
districts to levy property taxes, did not violate article VIII,
§ 1A. We noted in part that the mere fact that the area schools
received state aid did not render their operation a state func-
tion, because “[s]tate aid to schools necessarily involves a com-
mingling of state and local purposes.”45
42 Id. at 211, 219 N.W.2d at 460 (emphasis supplied).
43 Tallon II, supra note 30.
44 Id. at 607, 244 N.W.2d at 186.
45 Id. at 605, 244 N.W.2d at 186.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	225
Cite as 283 Neb. 212

In State ex rel. Meyer v. County of Banner,46 a county chal-
lenged the constitutionality of a state statute requiring it to
use its property tax revenue to maintain county and district
courts, prosecute state criminal violations, and conduct state
and national elections. These functions had traditionally been
financed by counties, and the constitutional amendment “does
not affect the use of property taxes by a county . . . or other
local subdivision. Counties . . . and other taxing subdivisions
. . . have traditionally relied and still rely upon property taxes
as their major source of revenue.”47 We concluded that the
statutory requirement that such expenses be paid by the county
from its property tax revenue was constitutional.
A somewhat similar situation was presented in Rock Cty.
v. Spire.48 There, the Legislature enacted a statute giving sole
responsibility for the administration of social services pro-
grams to the State. Part of the statutory scheme required that
all equipment that had been used by counties for the adminis-
tration of public assistance programs was to be transferred to
the State. These items had been purchased with property tax
moneys collected from county residents. The county contended
that because the items had been so purchased, converting them
for state use violated article VIII, § 1A. We rejected this argu-
ment, reasoning:
Although the State has assumed responsibility for the
administration 	of 	social 	services 	programs, 	providing
such services to people in need still remains a matter
which is of local concern. Certainly, historically, the
county has been responsible for certain of the costs of
social services programs, including, obviously, the cost
of purchasing the furniture and equipment at issue here.
Under the ownership of [the State], the county’s furniture
and equipment will continue to be used for predominantly
local purposes.49
46 State ex rel. Meyer, supra note 30.
47 Id. at 568, 244 N.W.2d at 181.
48 Rock Cty. v. Spire, 235 Neb. 434, 455 N.W.2d 763 (1990).
49 Id. at 447, 455 N.W.2d at 771.
226 	283 NebrASkA rePOrTS

Swanson v. State50 involved a constitutional challenge to
legislation51 which reorganized certain school districts and
provided for a common levy for the benefit of multiple school
districts grouped together as a Class VI school system. The
legislation affected Class I school districts, which maintained
only elementary schools, and Class VI school districts, which
maintained only high schools. Under prior law, property within
a Class I school district which had not chosen to become
part of an affiliated school system was taxed only in an
amount necessary to support the schools of that district and
the Class VI district where its students attended high school.
Affiliated Class I districts, however, were taxed as if all the
school districts in the affiliated system were part of one large
district. Hence, affiliated Class I school districts effectively
paid property taxes to support other Class I districts, while
unaffiliated Class I districts did not.
The challenged legislation created a “Class VI school system”
out of Class I and Class VI districts. each system included one
high school and each of the elementary schools whose students
would attend that high school. each district within this local
system maintained its independent school board and operated
as an independent entity. but the property of residents within
the local system was taxed based on the amount necessary to
support the entire system, not just the elementary district and
high school district affiliated with that property. The property
tax levy was uniform throughout each local system, and the
proceeds were distributed proportionally to the individual dis-
tricts within the system. State aid was based on the resources
and needs of the whole system, rather than on the resources and
needs of each individual district.
A taxpayer alleged the legislation violated article VIII,
§ 1A, because under it, state aid to individual school districts
depended on the common levy for the system. It was undis-
puted that under the legislation, state equalization aid to some
school districts, including the district in which the taxpayer
resided, was reduced. The taxpayer argued that the Legislature
50 Swanson, supra note 31.
51 See 1993 Neb. Laws, L.b. 839.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	227
Cite as 283 Neb. 212

had “in effect established a property tax for a state purpose, to
expand property tax bases so as to make possible the redistri-
bution of equalization aid.”52
In addressing this issue, we reviewed our decisions in
Tallon I and Tallon II and emphasized our conclusion in
Tallon I that the legislative scheme at issue was unconstitu-
tional, because it was primarily for the benefit of the state as
a whole. We found a lack of state control in the scheme in
Swanson; the State had no control over the budgets, programs,
personnel, or administrative rules and regulations of the school
districts within the new systems. We held that because the
“State has assumed neither control nor the primary burden of
financial support” of the new systems, nor had the State con-
ditioned the property tax levy on something that would benefit
the State, the levy was not unconstitutional as a property tax
for a state purpose.53
More recently, in Garey v. Nebraska Dept. of Nat. Resources,54
we held that a property tax was unconstitutional because it was
levied for a state purpose. In that case, residents and taxpay-
ers of natural resources districts challenged a state statute that
authorized any district with “‘a river subject to an interstate
compact among three or more states’” to annually levy a
property tax.55 Legislative history clearly demonstrated that the
controlling and predominant purpose of the tax was to create a
fund to enable the State to comply with an interstate compact.
because the benefit was predominantly to the state as a whole,
we held that the tax was unconstitutional.
(b) Legal Principles
[3] The levy of a property tax by a local governmental unit
should not be treated as a state levy for state purposes merely
because the Legislature has authorized or required the local
52 Swanson, supra note 31, 249 Neb. at 476, 544 N.W.2d at 340.
53 Id. at 478, 544 N.W.2d at 341.
54 Garey, supra note 31.
55 Id. at 152, 759 N.W.2d at 925, quoting Neb. rev. Stat. § 2-3225(1)(d)
(reissue 2007).
228 	283 NebrASkA rePOrTS

governmental unit to make the levy.56 The converse is also
true; where the Legislature has authorized and required local
governmental units to make a property tax levy for state pur-
poses, it should not be treated as a local levy for local purposes
merely because it is made by a local governmental unit.57
Construing the constitutional amendment to prohibit only a
direct statewide property tax levy by the State itself would
emasculate the amendment and render it virtually meaningless
and wholly ineffective.58
[4-6] The fact that a tax is for a governmental purpose does
not automatically make it for state purposes rather than local
purposes.59 This is so because in many, if not most, cases a gov-
ernmental function may be accurately described as having both
state and local purposes.60 Where state and local purposes are
commingled in a statutory enactment, the crucial determination
is whether the controlling and predominant purposes are state
purposes or local purposes.61 While this is a judicial question,
there is no sure test by which state purposes may be distin-
guished from local purposes.62 The court must consider each
case as it arises and draw the line of demarcation.63 In deciding
whether a state or a local purpose predominates, the language
of the statutory scheme is of prime importance.64 We may also
consider the legislative history65 and evidence in the record
relating to the history of the taxing scheme at issue.66
56 See R-R Realty Co., supra note 35.
57 See Tallon I, supra note 30.
58 Id.
59 R-R Realty Co., supra note 35.
60 See Kovarik, supra note 37.
61 See, Garey, supra note 31; Tallon I, supra note 30.
62 Id.
63 Id.
64 See, Garey, supra note 31; Swanson, supra note 31; Tallon II, supra note
30; Tallon I, supra note 30.
65 Garey, supra note 31.
66 Id.; Rock Cty., supra note 48; State ex rel. Meyer, supra note 30; Kovarik,
supra note 37; R-R Realty Co., supra note 35.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	229
Cite as 283 Neb. 212

(c) Statutory Language
The taxpayers urge us to focus on only the common levy
provision in the learning community legislation. but the con-
stitutionality of the common levy cannot be considered in a
vacuum. Instead, it must be considered in the context of the
learning community legislation of which it is an integral part.
In both Tallon I and Tallon II, we examined the statutory enact-
ment as a whole and did not focus solely on the funding mech-
anism at issue. We conducted a similar analysis in Swanson,
and conclude we must do so here.
Various provisions of the learning community legislation
clearly relate to local issues by authorizing or requiring a learn-
ing community to provide educational services to the students
and school districts within its territory. For example, a learning
community must adopt a diversity plan designed to increase
the socioeconomic diversity of enrollment at each school build-
ing within the learning community.67 Learning communities
employ an open enrollment attendance system, whereby a stu-
dent residing in the learning community may apply to attend
any school building within the learning community even if
that school is not within the school district where the stu-
dent resides.68 A learning community may also establish and
administer elementary learning centers which serve as resource
centers for enhancing the academic success of elementary stu-
dents.69 The elementary learning centers may offer classes for
family members, extended learning and summer school pro-
gramming, health services, tutoring, support services programs,
and resource advisors.70
We also note that the learning community legislation autho-
rizes a learning community to levy a property tax for the gen-
eral fund budgets of its member school districts, but does not
require a common levy.71 And by establishing a “maximum
67 Neb. rev. Stat. §§ 79-2110 and 79-2118 (Cum. Supp. 2010).
68 See §§ 79-2104(8) (Cum. Supp. 2010) and 79-2110.
69 § 79-2104(11) and Neb. rev. Stat. § 79-2112(1) (Cum. Supp. 2010).
70 Neb. rev. Stat. § 79-2114 (reissue 2008).
71 See § 77-3442(2)(b).
230 	283 NebrASkA rePOrTS

levy . . . of ninety-five cents per one hundred dollars of tax-
able valuation,”72 the statute leaves the amount of any such
levy to the discretion of the learning community’s coordinat-
ing council.
but it is also clear that a learning community council has
no discretion regarding the distribution of the proceeds of the
common levy. Section 77-3442(2)(b) directs that such distri-
bution be “pursuant to section 79-1073.” That section directs
that such proceeds be divided among member school districts
in accordance with a formula that uses specific numbers cal-
culated under sections73 of the Tax equity and educational
Opportunities Support Act.74 While the act determines state aid
to education, the state aid formula is different from the com-
mon levy disbursement formula.
(d) Legislative History
The legislative history related to learning communities is
extensive. Although the taxpayers and the district court focused
on only a specific and relatively small portion of the history, we
conclude that our task is to examine the history as a whole.75
The examination begins with the history of L.b. 1024, the
2006 bill that established learning communities. According to
the Introducer’s Statement of Intent, L.b. 1024
would provide for a new type of educational service unit
(e.S.U.) to be referred to as a learning community. The
territory of the learning community would form a single
tax base for purposes of a common general fund levy and
a common capital fund levy. The governing board for a
learning community would be composed of one school
board member from each member school district.
Students would be residents of the learning community
and would be able to attend school in their attendance
72 Id.
73 Neb. rev. Stat. §§ 79-1002 (reissue 2008) and 79-1007.11 and 79-1018.01
(Cum. Supp. 2010).
74 Neb. rev. Stat. §§ 79-1001 to 79-1033 (reissue 2008 & Cum. Supp.
2010).
75 See Garey, supra note 31.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	231
Cite as 283 Neb. 212

area or in any other school in the learning community
that had capacity. Transportation would be provided if
the student did not choose the closest school. School
districts could operate focus schools with authorization
from the learning community board and be eligible for
additional resources.
. . . Once in a learning community, the boundaries of
any school district could only be changed through a plan
submitted by the learning community board to the State
Committee for the reorganization of School Districts. The
boundaries for districts in the counties that are required to
be in a learning community would remain as they existed
on January 1, 2005 until a plan is approved by the com-
mittee. Within the first 5 years, the learning community
board would be required to submit a plan that assures
member districts do not have more than 25,000 students
and that equalizes economic diversity between member
school districts.76
During committee debate on the bill, its principal introducer
stated that it was intended to address “the metro area school
organization issue.”77 The senator stated that by enacting the
legislation,
We achieve an opportunity for cooperation between school
districts that is locally directed. The benefit of individual
school districts and the variety of choices they offer stu-
dents and parents is retained. The financial underpinnings
of districts are made more equitable. Student mobility
and opportunity [are] enhanced. The possibility of focus
programs or campuses that serve the entire metro area
is created.78
The principal introducer also stated that the learning commu-
nity “would be responsible for a common financial base” and
76 Introducer’s Statement of Intent, L.b. 1024, Committee on education, 99th
Leg., 2d Sess. (Jan. 30, 2006).
77 Id., Committee on education Hearing at 15.
78 Id. at 16-17.
232 	283 NebrASkA rePOrTS

would deal with “the broad issue of diversification of schools
within that learning community.”79
Also during floor debate, one senator noted that the learning
community legislation was “for the purpose of working to inte-
grate our schools, for the purpose of creating a common levy,
for the purpose of trying to address the problems in Omaha.”80
Another senator stated, “And I think Lb 1024 is about the met-
ropolitan area becoming one family of schools, one learning
community, far larger than just one city, one school, but all of
us together, working to solve the problems.”81
One of “the problems” in the metropolitan area was a bound-
ary issue. At the time that the Legislature first considered the
learning community legislation, a Nebraska statute provided
that “[e]ach incorporated city of the metropolitan class . . . shall
constitute one Class V school district.”82 The principal intro-
ducer of L.b. 1024 stated: “The issue we attempt to address
in Lb 1024 came storming onto the scene in June of last year,
when OPS, Omaha Public Schools, proposed to expand its
school district boundaries to the city limits of Omaha . . . .”83
Other senators echoed the thought. One stated:
I ask you, why are we here? We are here because of
boundaries. We are here because no school board in the
metro area—none—was willing to sit down and discuss
the issue of boundaries, to discuss the issue of the seg-
regated areas. No one was willing to sit down and talk
about giving up territory, giving up part of their little fief-
dom and/or growing. That is why we are here.84
Another senator observed:
Now we’ve got a situation where some of our districts,
some of our children, are in one fight. It is our responsibil-
ity and nobody else’s to stop that fight. Lb 1024 provides
79 Id., Floor Debate at 12969-70 (Apr. 10, 2006).
80 Id. at 13166-67 (Apr. 11, 2006).
81 Id. at 13548-49 (Apr. 13, 2006).
82 § 79-409 (Supp. 2005). See L.b. 1024, § 23.
83 Floor Debate, L.b. 1024, 99th Leg., 2d Sess. 12405-06 (Apr. 4, 2006).
84 Id. at 13157 (Apr. 11, 2006).
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	233
Cite as 283 Neb. 212

an excellent way of doing that. It provides a learning
community in which everyone is fully to the table.85
The issue of boundaries also appeared as the learning com-
munity legislation evolved. L.b. 1024 froze school district
boundaries in the learning community subject to later redraw-
ing, while 2007 Neb. Laws, L.b. 641, permanently froze school
district boundaries.
The legislative history of L.b. 1024 also reflects concern
about educational issues unique to a metropolitan area. One
senator stated that L.b. 1024 encouraged “suburban districts”
“to be involved with the urban district in making sure that all
children have the best opportunities for educational success.”86
The principal introducer of L.b. 1024 stated, “One of the main
objectives of the learning community is to address . . . the issue
of integration within the entire learning community . . . .”87
He stated that the legislation “basically involves a cooperative
arrangement for funding, for addressing building needs, and for
addressing whatever student mobility issues and educational
opportunity issues that may be available, and the last may be
the most important.”88 Another senator described the learning
community structure as one in which the member districts are
“interrelated,” explaining, “We’re trying to find a way to bring
better delivery of services, to bring the benefits of local control
and shared responsibilities in the larger group all together in
one bill . . . .”89
It is also evident that the Legislature considered the impact
of a learning community’s common levy on state equalization
aid. One senator remarked, “not only are we as a Legislature,
through our policies, making equity . . . but the sharing of
the property tax amounts throughout the learning community
make a significant difference on the funding side of things.”90
85 Id. at 13159-60.
86 Id. at 12417 (Apr. 4, 2006).
87 Id. at 12994 (Apr. 10, 2006).
88 Id. at 12423 (Apr. 4, 2006).
89 Id. at 13548 (Apr. 13, 2006).
90 Id. at 12440 (Apr. 4, 2006).
234 	283 NebrASkA rePOrTS

The principal introducer of the legislation stated during floor
debate that
part of this proposal is the formation of a learning com-
munity and a common operating levy within that learn-
ing community and a sharing of that entire community
resource. you’re right that any one of these or any other
district in the learning community that happened to be
relatively low on property tax resources would rely rela-
tively more on state aid. but . . . that’s the way it does
now happen in our aid formula.91
One colloquy during floor debate on L.b. 1024 is particularly
instructive, and because various parties rely on portions of it,
we quote it at some length:
SeNATOr HOWArD: Thank you. As you know, you
and I worked closely on the issue of the common levy and
I’m very supportive of that. I think that’s a way to address
the needs of all children equally. but my question is the
common levy, and I know that you can understand this
and really can help me better understand it, the common
levy is used to equalize the resources among districts. Am
I correct in that?
SeNATOr rAIkeS: yes.
SeNATOr HOWArD: My second part of this ques-
tion then, would you see this issue, would you see this
as . . . this equalization, this funding being used for a
purpose for the state, a more general purpose regarding
the students?
SeNATOr rAIkeS: I’m not sure I follow your ques-
tion, Senator. Are you talking about the common levy
within the learning community and its implications for
statewide finance or policy?
SeNATOr HOWArD: Well, my question really is . . .
and I’m sorry if I’m vague. I’ll have to try to phrase this
better to be . . . to have some more clarity in it. but the
levy will result, no matter what the levy is, that amount
of money will come from property tax, is that correct? I
mean the source of it, when you boil it right down.
91 Id. at 12811 (Apr. 6, 2006).
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	235
Cite as 283 Neb. 212

SeNATOr rAIkeS: right.
SeNATOr HOWArD: So if we take that then and look
at that money that’s going to be used for educational pur-
poses for all students, is this considered a state purpose,
since education funds come from the state, it’s governed
. . . the educational program is governed by the decisions
made by the legislative body for the state, and is the levy
going to be used for a state purpose?
SeNATOr rAIkeS: No, the levy is to support the
local school system.
SeNATOr HOWArD: but isn’t that the state? Aren’t
we ultimately responsible for that? And I know it’s local
in that many of the decisions are made locally and by
the school boards, but ultimately isn’t this the state that
is responsible?
SeNATOr rAIkeS: Well, it’s a shared responsibility
between the state and local districts, and the local prop-
erty tax is the local share of the financing of the school
districts.
SeNATOr HOWArD: Okay. I think I have a better
concept of this. So that the levy, the common levy would
be divided by the committee, no longer being called a
board, now called the committee, they would . . .
SeNATOr rAIkeS: It’s a council.
SeNATOr HOWArD: . . . they would make the . . .
SeNATOr rAIkeS: Coordinating council.
SeNATOr HOWArD: Thank you. Thanks. The coun-
cil. We’ve changed that name a few times. but they would
have the leverage to make the decision regarding the
funding.
SeNATOr rAIkeS: They . . . that council has the
authority to set the common levy up to a maximum . . .
SeNATOr HOWArD: And that would be . . .
SeNATOr rAIkeS: . . . much the same as an indi-
vidual school board now has the authority to set a local
school district levy up to a maximum.92
92 Id. at 12852-54.
236 	283 NebrASkA rePOrTS

In 2007, the year after the Legislature enacted L.b. 1024,
it considered L.b. 641, which was introduced by the same
senator who had introduced L.b. 1024 the previous year. He
described the bill as one of several “introduced this year to deal
with what we have come to know as the metro area issue.”93
As with L.b. 1024, the floor debate on L.b. 641 included
a discussion of the school district boundary issues which pre-
cipitated the learning community legislation.94 And there was
further discussion of educational goals, with one senator not-
ing that the problem which the bill sought to address was “an
achievement gap for minority students in Omaha that must not
be permitted to continue.”95 Speaking on the subject of learning
community structure, another senator remarked:
but you’ve got to have a governance to be able to com-
mingle and send assets and resources and dollars to areas
of the two-county learning community that need the spe-
cial aid to make good things happen so that we improve
education and learning and ultimately test scores and
everything else that’s important to us that we talk about.
Quality education is what we’re working on.96
The floor debate on L.b. 641 also included a discussion of
the impact of a learning community’s common levy on state
aid to education. The introducer of L.b. 641 explained how the
common levy would work:
Let’s assume that the learning community council estab-
lishes a common general fund levy of 95 cents. That
would be levied against all the valuation in the entire
learning community and that money collected from that
would be distributed to the learning community school
districts in proportion to their needs, the needs as calcu-
lated in the state aid formula.97
93 Floor Debate, L.b. 641, 100th Leg., 1st Sess. 54 (May 9, 2007).
94 Id. at 54-56.
95 Id. at 72.
96 Id. at 103.
97 Id. at 148 (May 21, 2007).
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	237
Cite as 283 Neb. 212

In response to a question of how learning community operating
costs would affect the state’s budget over time, he stated:
There are effects sort of going both ways. The idea of a
common levy within a learning community whereby you
have a sharing of high valuation and low valuation dis-
tricts actually does, I’ll say, free up state aid money for
the state. So you may view that additional state aid money
that is available as funding that could be made available
for learning community operations. I will tell you that I
am hopeful, at least, that the learning centers, the learning
community council will be successful in getting leverag-
ing money from the community in the metro area to help
support some of these programs.98
During floor debate on 2008 Neb. Laws, L.b. 1154, which
made additional amendments to the learning community legis-
lation, the principal introducer explained that the proceeds of
the common levy did not go to the learning community itself,
but, rather, to the individual school districts within the learning
community “in proportion to need.”99 He described the com-
mon levy as
a critical part of the needed funding arrangement for the
educational opportunities in the learning community. It
enhances the provision of educational opportunities, the
open enrollment provisions, and it also enhances the
notion that you get, at least financingwise, equal educa-
tional opportunities for students in the metro area.100
(e) Disposition
because a learning community is a political subdivision hav-
ing defined boundaries which circumscribe its operational and
taxing authority, its property tax levy is not facially “for state
purposes.” but our jurisprudence requires that we look deeper
to determine whether the Legislature has attempted to “avoid
or circumvent [the] constitutional mandate” of article VIII,
98 Id. at 29.
99 Floor Debate, L.b. 1154, 100th Leg., 2d Sess. 117 (Mar. 26, 2008).
100 Id. at 115.
238 	283 NebrASkA rePOrTS

§ 1A, “by converting the traditional state functions into local
functions supported by property taxes.”101
[7-11] We undertake this analysis in the context of familiar
general principles. A statute is presumed to be constitutional,
and all reasonable doubts are resolved in favor of its constitu-
tionality.102 The burden of establishing the unconstitutionality
of a statute is on the one attacking its validity.103 The uncon-
stitutionality of a statute must be clearly established before it
will be declared void.104 The power to tax being a sovereign
power, constitutional provisions relating thereto do not oper-
ate as grants of power of taxation to the government, but are
merely limitations on a power which would otherwise be unre-
stricted.105 Constitutional limitations on the power to tax must
be strictly construed.106
One factor we must consider is whether operational control
of the entity supported by the property tax lies with the state
or with the local entity.107 In Tallon I, we concluded that the
Legislature had assumed direct control of major policy deci-
sions which affected each of the seven technical community
college areas which were financed by a property tax. This
included control over capital expenditures, the right to control
and direct facilities and training available in each area, and the
“complete and direct control of the individual budget of each
technical community college area.”108 but in upholding the
revised legislation in Tallon II, we noted that the colleges were
no longer dominated by the State, but, rather, were governed
by area boards which “exercise the same powers and functions
101 Swanson, supra note 31, 249 Neb. at 476, 544 N.W.2d at 340.
102 Kiplinger, supra note 26; Yant, supra note 26.
103 Id.
104 Id.
105 Dwyer v. Omaha-Douglas Public Building Commission, 188 Neb. 30, 195
N.W.2d 236 (1972).
106 Id.
107 See, Swanson, supra note 31; Tallon II, supra note 30; Tallon I, supra
note 30.
108 Tallon I, supra note 30, 192 Neb. at 211, 219 N.W.2d at 460.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	239
Cite as 283 Neb. 212

as other political subdivisions.”109 We noted that the technical
community colleges were “now in largely the same position
as our school districts. They operate on a strictly local basis
subject only to guidelines laid down by the Legislature.”110 The
absence of operational control by the State was also a key fac-
tor in upholding the legislation before this court in Swanson.
There, we noted that the legislation did not give the State “con-
trol over individual budgets, capital expenditures, availability
of programs, whether and how to hire personnel, or admin-
istrative rules and regulations. All of these decisions remain
within the province of the individual . . . school districts.”111 We
concluded that the Class I and VI school districts “maintain[ed]
their autonomy and independence in all respects except their
grouping for property tax support.”112
Operational control within a learning community is similarly
local. The school boards of the member districts retain control
over their budgets, educational programs, and other operational
matters in much the same manner as if no learning community
existed. Operational control over programs of the learning
community itself, such as diversity plans, open enrollment,
and elementary learning centers rests with the learning commu-
nity’s coordinating council, not with any state agency.
Our prior school financing cases have also examined whether
the challenged property tax levy is mandated by the State or
left to the discretion of the local taxing authority. In Tallon I,
we concluded that while the statute did not require area boards
to certify a levy of one mill, it effectively enforced that result
by voiding any state appropriation to an area whose mill levy
was less than that amount. The legislation which we upheld in
Tallon II empowered but did not require local college areas to
levy property taxes, and we noted this factor as a part of the
basis for our conclusion that the tax did not violate article VIII,
§ 1A. And upholding the property tax challenged in Swanson,
109 Tallon II, supra note 30, 196 Neb. at 606, 244 N.W.2d at 186.
110 Id. at 607, 244 N.W.2d at 186.
111 Swanson, supra note 31, 249 Neb. at 478, 544 N.W.2d at 341.
112 Id.
240 	283 NebrASkA rePOrTS

we reasoned that the State had not “conditioned state funding
on the performance of some act, or the levying of some tax, to
benefit the State.”113
Similarly, a learning community is not statutorily required
to levy the property tax challenged in this case. Section
77-3442(2)(b) provides that a learning community “may levy”
a property tax of up to $0.95 per $100 of taxable valuation
for the general funds of its member school districts. Unlike
the statute in Tallon I, there is no penalty for failing to do so.
To the extent that a learning community elects to levy, the
taxing authority of its member school districts decreases; and
conversely, to the extent that a learning community elects not
to levy, the authority of its member school districts increases
subject to the statutory maximum levy.114
but the taxpayers urge us to focus on § 79-1073, which
directs that the proceeds of a learning community levy be
divided among member school districts in accordance with a
formula which utilizes numbers calculated according to the
provisions of the Tax equity and educational Opportunities
Support Act. The taxpayers argue that through this statute, the
State, not a learning community, controls the distribution of
revenue from a learning community’s levy. They alleged in the
complaint that
[w]hat the Legislature has done in the learning community
legislation is to convert the traditional state function of
providing “equalization aid” (i.e., providing state sales and
income tax dollars to school districts that have a greater
need and less ability to generate property tax receipts)
into a local function supported by property taxes.
They argue the common levy thus serves a state purpose by
using “property tax funds to ‘equalize’ aid to education within
the Learning Community and thus save the state from commit-
ting additional aid from other sources.”115 They contend that as
a result of a learning community’s common levy, “the State of
113 Id.
114 See § 77-3442(2)(c).
115 brief for appellee taxpayers at 24.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	241
Cite as 283 Neb. 212

Nebraska is able to reallocate state education aid and is able
to avoid making an additional commitment of income tax or
sales tax proceeds to some school districts within the Learning
Community despite knowing that additional aid is needed by
those districts.”116
For purposes of our analysis, we assume without decid-
ing that the Learning Community levy challenged here will
decrease the amount of state equalization aid which would
otherwise be paid to one or more of the school districts within
the Learning Community. We further assume without decid-
ing that this decrease in equalization aid would save the State
from committing additional aid from other sources. based
on these assumptions, the State may derive some financial
benefit from the learning community legislation and, specifi-
cally, the common levy authorization. but the mere fact that a
state-authorized tax supports a governmental purpose does not
render it a tax for state rather than local purposes.117 Indeed,
the “mere granting of state aid does not render a school opera-
tion a state function.”118 rather, given the commingled state
and local purposes, the dispositive issue is whether achieving a
reduction in state equalization aid in order to benefit the State
as a whole was the controlling and predominant purpose of
the legislation.119
In Tallon I, we struck down the proposed legislation under
article VIII, § 1A, because, although state and local purposes
were commingled, there was a “strong indication of [a] legisla-
tive purpose to benefit residents of the entire state as contrasted
to residents of particular local areas.”120 In contrast, neither the
language of the legislation before us nor its legislative history
indicates that the Legislature’s predominant purpose was to
save money for the benefit of the state as a whole. Much of the
learning community legislation demonstrates a predominantly
116 Id. at 25.
117 Swanson, supra note 31; Rock Cty., supra note 48.
118 Tallon II, supra note 30, 196 Neb. at 606, 244 N.W.2d at 186.
119 See, Swanson, supra note 31; Tallon II, supra note 30; Tallon I, supra
note 30.
120 Tallon I, supra note 30, 192 Neb. at 211, 219 N.W.2d at 460.
242 	283 NebrASkA rePOrTS

local purpose in that operational control remains local and
a learning community provides a number of distinctly local
services. Similarly, when viewed as a whole, the legislative
history makes it clear that the learning community legislation
was enacted to resolve specific, local problems and that the
predominant purpose of the legislation was not to benefit the
state as a whole.
Our conclusion is bolstered by the fact that we upheld a
taxing scheme nearly identical to that at issue in this case in
Swanson, and we see no reason to deviate from that opinion.
Under the legislation challenged in Swanson, state equalization
aid to some school districts was decreased and the districts
were allowed to increase their property tax requirements. The
taxpayer challenging the legislation argued that the Legislature
had effectively established a property tax for a state purpose
by expanding property tax bases to allow redistribution of
state aid. We rejected the argument, noting that the districts
“maintain[ed] their autonomy and independence in all respects
except their grouping for property tax support.”121
We are required to presume a statute is constitutional.122 In
light of that presumption and based on the language of the
learning community legislation and its legislative history, we
cannot conclude that the controlling and predominant purpose
of the legislation which authorized the common levy was to
utilize property tax revenue to reduce or redistribute state
equalization aid to schools, thereby saving the state as a whole
sales and income tax dollars. Instead, viewing the statutory
language, the legislative history, and the evidence before us, we
conclude that the controlling and predominant purpose of the
learning community legislation was to address complex educa-
tional issues presented within metropolitan school districts. We
therefore conclude that the Learning Community’s common
levy for the general funds of its member school districts is a
tax levied for substantially local purposes, and it does not con-
travene article VIII, § 1A, of the state Constitution.
121 Swanson, supra note 31, 249 Neb. at 478, 544 N.W.2d at 341.
122 See, Kiplinger, supra note 26; Yant, supra note 26.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	243
Cite as 283 Neb. 212

3. pRohiBition oF commutation
The district court did not address the taxpayers’ alternative
arguments that the common levy is an unconstitutional com-
mutation of property tax and/or a nonuniform tax that violates
the Nebraska Constitution. because these are issues of law
based upon undisputed facts, and they have been briefed by
the parties, we address and resolve them in the interest of judi-
cial economy.
[12] 	Article 	VIII, 	§ 	4, 	of 	the 	Nebraska 	Constitution
provides:
[T]he Legislature shall have no power to release or dis-
charge any county, city, township, town, or district what-
ever, or the inhabitants thereof, or any corporation, or the
property therein, from their or its proportionate share of
taxes to be levied for state purposes, or due any munici-
pal corporation, nor shall commutation for such taxes be
authorized in any form whatever[.]
This 	proscription 	against 	commuting 	a 	tax 	prevents 	the
Legislature from releasing either persons or property from
contributing a proportionate share of the tax.123 A commuta-
tion occurs in violation of the Nebraska Constitution when tax
funds raised in one district are diverted entirely to the benefit
of another district.124
Peterson v. Hancock125 is the only case in which we have
found an unconstitutional commutation of taxes. That case
involved a statute authorizing the levy of a property tax in
all elementary school districts. To receive funds from the
levy, however, a school district was required to have five
or more pupils, and some of the districts taxed did not. We
held, “The only conclusion that can logically be drawn is
that districts having less than five pupils are required to pay
the blanket levy on all their property into the fund for the
sole benefit of districts with five or more pupils.”126 Although
123 Kiplinger, supra note 26.
124 Swanson, supra note 31.
125 Peterson v. Hancock, 155 Neb. 801, 54 N.W.2d 85 (1952).
126 Id. at 812, 54 N.W.2d at 92.
244 	283 NebrASkA rePOrTS

we noted the Legislature’s “laudable” intention of inducing
smaller elementary districts to consolidate, we held the statute
was unconstitutional because it was “levied upon one district
of the county for the exclusive benefit and local purpose of
other districts.”127
[13] In Swanson, we rejected a claim that the school sys-
tem’s common levy resulted in an unconstitutional commuta-
tion of taxes. Citing the rule that a “commutation occurs in
violation of the Nebraska Constitution when tax funds raised
in one district are diverted entirely to the benefit of another
district,”128 we reasoned that the taxing district which imposed
the common levy was the Class VI school system and that no
commutation occurred, because the proceeds of the common
levy benefited the taxpayer’s district. Distinguishing the case
from Peterson, we concluded, “A tax levy does not equal a
commutation merely because the taxing district is broadened to
reflect the actual benefits to the public. So long as all taxpayers
receive the benefit of the taxes they remit, the taxing district
passes constitutional muster without offending the prohibi-
tion against commutation.”129 We applied this same principle
in Kiplinger,130 holding that landowners within certain natural
resources districts who received a benefit from projects funded
by an occupation tax imposed on irrigation within those dis-
tricts did not establish that the tax violated the constitutional
prohibition against commutation. The taxpayers ask that we
reconsider and limit this principle, arguing that it would permit
the Legislature to create expansive taxing districts in order to
evade the constitution’s prohibitions of commutation. but that
is not the case before us, and this court does not issue advi-
sory opinions.131
127 Id. at 813-14, 54 N.W.2d at 93.
128 Swanson, supra note 31, 249 Neb. at 471, 544 N.W.2d at 337.
129 Id. at 474, 544 N.W.2d at 339.
130 Kiplinger, supra note 26.
131 See Stewart v. Advanced Gaming Tech., 272 Neb. 471, 723 N.W.2d 65
(2006).
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	245
Cite as 283 Neb. 212

[14] As we noted in Swanson, the Legislature creates a tax-
ing district when it grants an entity the power to require the
county clerk to levy a tax for the support of the district.132
Here, that taxing district is a learning community, a political
subdivision with defined boundaries and specified authority
to provide services and levy taxes within those boundaries. A
learning community’s common levy operates in a manner simi-
lar to that which we upheld in Swanson, in that it benefits not
only the school district in which the taxpayers reside, but also
other school districts within the learning community. None of
the proceeds are expended outside the learning community.133
We conclude that a learning community’s common levy under
§ 77-3442(2)(b) does not violate the constitutional prohibition
against commutation of taxes.
4. uniFoRmity clause
[15] The uniformity clause of Neb. Const. art. VIII, § 1,
provides: “Taxes shall be levied by valuation uniformly and
proportionately upon all real property and franchises as defined
by the Legislature except as otherwise provided in or permitted
by this Constitution . . . .” The object of Nebraska’s uniformity
clause is accomplished if all of the property within the tax-
ing jurisdiction is assessed and taxed at a uniform standard
of value.134
As we have noted, a learning community, not its member
school districts, is the taxing jurisdiction which imposes the
common levy challenged here. Swanson involved a common
levy by a school system comprised of several school districts.
A learning community’s common levy taxes all property within
the learning community at the same rate. As in Swanson,
because the member school districts within the learning com-
munity are part of the same taxing district and the levy is uni-
form throughout that district, the common levy is uniform and
does not violate the uniformity clause.
132 Swanson, supra note 31.
133 See § 79-1073.
134 County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578,
635 N.W.2d 413 (2001); Constructors, Inc. v. Cass Cty. Bd. of Equal., 258
Neb. 866, 606 N.W.2d 786 (2000).
246 	283 NebrASkA rePOrTS

V. CONCLUSION
The district court erred in addressing the constitutionality of
§§ 77-3442(2)(g) and 79-1073.01, because the issue was not
presented by the pleadings. We have jurisdiction and an obliga-
tion to decide the constitutional questions presented to us, as
they are not merely political questions. The statutory language,
the legislative history, and the record as a whole demonstrate
that a learning community’s common general fund levy under
§ 77-3442(2)(b) serves a predominantly local purpose, not a
state purpose. because all members of a learning community
receive benefits from the taxes levied and the levy is uniform
throughout the community, no commutation occurs and there
is no violation of the uniformity clause. The judgment of the
district court is therefore reversed, and the cause is remanded
to that court with directions to dismiss.
R eveRsed and Remanded with
diRections to dismiss.
wRight, 	geRRaRd, 	and 	milleR-leRman, 	JJ., 	not
participating.
SArPy CTy. FArM bUreAU v. LeArNINg COMMUNITy 	247
Cite as 283 Neb. 212