Earlier this month, Westside Community Schools won a lawsuit in the Nebraska Supreme Court. The lawsuit was filed due to an error made by the Douglas County Treasurer, which underpaid Westside millions of dollars in PILOT (Payment in Lieu of Taxes) funding for several years. Westside lawyers filed a case in 2022 to try to correct this error.
The error was identified by the State Auditor who found that John Ewing, who is now the Mayor of Omaha but was the County Treasurer at the time, accidentally underpaid Westside by $3.7 million. The Auditor also found that Elkhorn Schools were underpaid by $4.2 million, and Ralston by $4 million.
Additionally, the auditor found that there were overpayments made to Omaha Public Schools (OPS) of $5.7 million to the City of Omaha of $4.4 million, and to Douglas County of $2.7 million.
Before filing the lawsuit, Westside came to a settlement with the Treasurer and the City of Omaha to repay the funds over six years. However, OPS disagreed about if and how the money should be repaid. Westside lost the case in the lower court, and it was then appealed to the Nebraska Supreme Court.
The Nebraska Supreme Court ruled that Westside was entitled to the PILOT funds it did not receive. The Court also ruled that the law was clear about how the funds were supposed to be paid, and that “there is a duty for the treasurer to properly distribute those funds.” The Court disagreed with OPS’s argument that Westside had other ways to fix the error.
Now that the Nebraska Supreme Court has sided with Westside and made their decision, the Westside Financial Department, Board of Education and other leaders need to determine the path for what’s next.
“[The district needs]…to allow time for our external legal counsel team to get a clear picture of what this ruling means. Then, that ruling needs to be clearly outlined for our Board of Education and District Leadership team so we can put applicable plans in place. We then want to be strategic and thoughtful about how best to use the additional funds we are now likely to receive over the next five to six years.” Westside Superintendent Dr. Mike Lucas said. “What we believe to be true at this time is that we will receive somewhere between a total of $4-8 million dollars divided up over the next five to six years.”
Dr. Lucas offers commentary on how the results of this lawsuit will impact Westside Community Schools.
“These additional funds could be used to pursue some new and innovative academic offerings for students, advanced professional development for staff, and/or other budgetary areas that could help make us even more efficient.” Lucas said.
Some critics argue that because of this ruling, OPS will reduce funding in the years to come, even though the decision of the Supreme Court is correcting an error that was unfair to Westside.
Dr. Lucas emphasized that Westside has tried to prioritize being “neighborly” with OPS as well as Douglas County and the City of Omaha. According to Dr. Lucas, he has always held a lot of respect for them.
“OPS is a tremendous school district… They educate 21% of the public school students in Nebraska!” Lucas said.
Dr. Lucas also points out that, the way that schools receive funding through the state formula, it is likely that OPS will be able to get back the majority of funds over the same time period through more dollars from the state.
“When all is said and done, even though OPS might lose $4-$8 million of PILOT funds from Douglas County, they will likely receive more money from the state to help offset that loss.” Lucas said.
