Last week the special session continued as we worked to hammer out what the property tax relief package would look like. There is a lot of disagreement on what is the right way to address this very important issue in the state of Nebraska. What I shared in my last newsletter has developed into something different. I do believe now is the time to address the property tax crisis. We have all been called back to the State Legislature by Governor Pillen and we need to address this now.

Our state and our taxing authorities have a spending problem. Our state has reduced its state spending by $140 million which is a 2.5% reduction in spending. ALL taxing authorities MUST take a hard look at their budgets. This is not a valuation issue, but a levy problem as well as a spending problem. Just as we have to adjust our own personal budgets in order to make sure we are spending our income properly, the taxing authorities and state government must look at their budgets and tighten their belts to make sure they are spending correctly. It is in Nebraska state law that when valuations go up, levies shall reduce accordingly.

We need to broaden the base or we won’t get relief. There are $7 billion in sales tax exemptions and no one wants to give up their exemptions. Strength comes when everyone comes to the table and is willing to negotiate in good faith. Nebraska will begin looking at ALL taxing authorities to see how taxes are being used. The lobby has done a good job of bringing division to our body. It seems to be okay for some to keep their tax exemption, but not for others. Everyone needs to give a little to get a little. Everyone needs to come to the sandbox to play.

We pivoted to funding schools as it was never the intention of the state to fund public schools using property taxes. Currently, taxes paid to school districts comprise the largest share of most individuals’ tax bills. School districts levy nearly 60% of the total property taxes collected. Recent increases in agricultural land valuation have greatly impacted state aid to schools through TEEOSA (Tax Equity and Educational Opportunities Support Act). School districts are eligible to receive state aid through TEEOSA to supplement property tax revenue. Part of TEEOSA’s funding formula is based upon the property tax resources available in the district. Over the past few years, an increasing number of schools have become non-equalized and do not receive any state funds. These school districts, largely in rural areas, must then rely solely on property taxes. The formula is obsolete and MUST be revamped. Large schools will soon not be able to capitalize on the formula.

On Tuesday, August 20th, (day 17 of Special Session) we will either move forward with LB34 and Sine Die or if LB34 doesn’t pass, we could be there longer with other ideas presented. Stay tuned.

News from the Governor’s office

On August 7-8, Governor Pillen welcomed 600 leaders to Younes Conference Center North in Kearney for “One Nebraska: the Governor’s Summit on Ag and Economic Development” co-hosted by the Nebraska Department of Economic Development (DED) and the Nebraska Department of Agriculture (NDA).

“We have unique strengths as a state that we can brag about to bring in business,” said Governor Jim Pillen. “Nebraska has amazing people, abundant natural resources, and the most sustainable ag production on the planet. The Summit is a tremendous opportunity to strategize together about how we can make the most of these competitive advantages.”

This year’s event included a focus on retaining graduates and attracting new residents to Nebraska. The Summit also included an emphasis on Nebraska’s bioeconomy–exploring how the state can feed the world and fuel the future while contributing to a cleaner environment. The Nebraska Department of Natural Resources (NeDNR) led panel discussions on innovative practices to reduce water use and other crop inputs in order to safeguard Nebraska’s aquifer and surface waters.

The Nebraska Department of Transportation (NDOT) headed sessions to provide insight on how the State of Nebraska can support local governments in the pursuit of federal discretionary funds for broadband, roads, and bridges. NDOT’s launch of the Nebraska Infrastructure HUB aligns with Governor Pillen’s vision of increasing the state’s competitiveness for federal funding along with providing support to state and local partners in navigating the challenges involved with the application and administration processes. (Strimple, Laura and Urlis, Allan. Press Release. “Gov. Pillen Hosts ‘One Nebraska’ Ag and Economic Development Summit”. 09 August, 2024. https://shorturl.at/A2Uqz)

As always, I invite you to let me know your thoughts, ideas, concerns, or suggestions by calling my office at (402) 471-2716 or emailing me at jalbrecht@leg.ne.gov.