This past week started with Julie and I attending parades in Brady, Stapleton, and Mullen. We then spent this Saturday in Maxwell, participating in their annual parade. Eating some of the three delicious pies from Maxwell’s pie auction was the perfect end to the week. We now have our sights set on the Hershey Fall Festival!

We also attended the annual Governor’s Ag and Economic Development Summit in Kearney. The event began with the annual Nebraska Diplomats’ awards banquet. I was honored to join other area leaders in accepting the Community of the Year Award on behalf of the City of North Platte. In recent years, the North Platte area has quietly ignited amazing growth that will have a profound effect on this area for decades to come. I would be remiss if I did not acknowledge the outstanding work of Gary Person, who used his long history of economic development to play a key role in orchestrating the growth we see today.

Although these major developments are in the North Platte/Hershey area, the economic impact and population growth will have a large reach. Our greatest challenge over the next few years will be finding housing for all the new workers needed to meet the new job creation. There may never be a greater opportunity to grow all the communities in District 42 than right now. Going forward, we need to use all the tools in our toolbox to lower the cost of new housing and improve the existing housing stock. I look forward to working with all our area leaders to maximize economic development opportunities.

This week, Governor Pillen will be in North Platte to visit with local education leaders and attend a rally for those who support the Opportunity Scholarship Act. Governor Pillen spent his entire campaign making it clear how much he cared about helping every child in this state reach their fullest potential. To that end, he included in his budget more than $300 million in annual funding increases for public schools and a $1 billion fund to help ensure that these increases will remain in place. He also pushed for the Legislature to adopt the LB753, the Opportunity Scholarship Act.

As disappointing as it is to see that there is an effort to repeal this act, I have confidence that the voters will see through all the misinformation out there and uphold the Legislature’s decision on this issue. In the end, this bill is about reducing barriers that prevent low-income families from choosing their child’s school. I have said before and will say again, the bill is not a slam on public schools or teachers; it is about opportunities for every child to attend the school that best fits their learning style. Just as option enrollment allows parents to transfer their students from one public school to another, low-income parents can now add private and parochial schools to their options.

During my travels this past week, I had the opportunity to join the area public school superintendents at a workshop in Sutherland. I appreciated the invitation to meet with them and to understand better the daily challenges they and their teaching staff face every day. As many of you know, I was a vocational agriculture instructor after graduating from the University of Nebraska many years ago. Although teaching had its challenges then, I cannot imagine teaching today. The changes in society over the years have brought teaching challenges in the public school systems today to a new level.

Teachers have always been there to help support each and every one of their students. But the drug issues that have infested our nation are here in western Nebraska as well. As a result, teachers and school administrators have more and more interactions with law enforcement and mental health providers. These challenges go largely unnoticed by the general public but are real issues that teachers deal with every day in their classrooms. As your District 42 State Senator, I am committed to working with the Governor and school administrators to find ways to remove the barriers to education that can result in better educational outcomes.

If you have issues on your mind, please feel free to reach out to me directly at mjacobson@leg.ne.gov or 402-471-2729. My door is always open!

As the summer winds down and students get ready to return to school, we’re taking advantage of warm-weather activities. Over the weekend, Julie and I participated in the Brady Days annual parade, drove up to Stapleton to participate in the annual Logan County Fair parade, then on to Mullen for the Hooker County Fair parade and annual beef barbeque. We also carved out time to take part in a portion of the annual Rail Days activities in North Platte. I am always amazed at the elaborate model train display that is held at the D&N Event Center. Thank you to the Kiwanis Club for providing a delicious pancake feed.

I always look forward to attending events throughout District 42 and having the opportunity to speak to constituents in person. There is nothing like one-on-one conversations to find out what is really on people’s minds. As we begin working on legislation for the coming session, these conversations provide me with valuable information to develop bills that can address the needs of District 42.

One issue that’s getting some conversation is the Lincoln County Commissioners’ possible zoning regulations for wind turbines. As a landowner, I have always believed that I should be allowed to use my land as I see fit with very limited interference from the government. However, this gets complicated when one’s land use could significantly impact the value of my adjacent land. This is the primary reason that zoning laws exist.

Zoning regulations, when properly enacted, can serve as a way to protect all parties without preventing individual landowners from enjoying the use of their property. If you live in a neighborhood that is intended to be made up of single-family homes, it can be disruptive to the neighborhood if someone decides to build an apartment house on their property. It can also negatively impact property values if someone pulls in a mobile home on their property.

It is also important to balance the value of different types of uses, particularly when it comes to livestock facilities. Once again, this issue cuts both ways. If I have a cattle feed yard that was built many years ago, and my neighbor subdivides his property to allow for high-end homes on acreages, I should not be forced to shut down my feed yard because the “new” neighbors don’t want the odor. Meanwhile, if I decide to build a new feed yard right next to an existing community, you may want some protection from the new land use. This is the issue facing the Lincoln County Commissioners when it comes to wind generators.

There has been a push throughout the state to locate wind generators on farms and ranches. The promoters are offering lucrative lease rates to entice landowners to enter into long-term leases to allow the construction and operation of wind generators on private land. The question before the Commissioners is, “How far from the property line should these generators be located?” Many of us who live in rural Nebraska live here because we enjoy the peace and quiet and the incredible views of the rural landscape. This can be disrupted when these towers are built. I wish the Commissioners luck as they try to find the right balance.

On a side note, it is no secret that I am not a fan of wind energy. Besides being one of the most expensive sources of power (without tax subsidies), the impact on wildlife and landscape is significant. Additionally, wind generators are expensive to build, transport, and operate. They also have a limited life span which also raises the question of how and where to dispose of them once they have reached the end of their life.

To be sure, energy diversification is important, and we cannot only rely on fossil fuels as our primary sources of “reliable” and low-cost energy. I hope we continue to explore a wide variety of alternatives. For example, “Small Nuclear” energy facilities and large-scale “Sodium Cooled Reactors” like the one under construction in Kemmerer, Wyoming can provide safe sources of energy at a low cost. These types of facilities can also take advantage of existing infrastructure, like Gerald Gentleman Station. We are very blessed to have such a significant energy facility in our area, and keeping this plant in place will continue to be one of my highest priorities in the Legislature. The quality employment base and the positive impact that this plant has on economic development in this area is overwhelming.

Please continue to contact me on this and other issues at mjacobson@leg.ne.gov, or feel free to call my office at 402-471-2729. My door is always open!

Julie and I had the opportunity to spend time at the Lincoln County and Thomas County Fairs this past week, as well as the Logan County Fire and Rescue barbeque and fundraiser. At the Thomas County Fair, we participated in the annual parade, the classic car show, and all the activities in the pavilion. I also engaged in some serious negotiations with a young girl to sell me her cookie jar filled with cookies (she drove a hard bargain). Talking to constituents in these casual settings is a great opportunity to better understand their needs and exchange information. We hated to miss the Perkins County Fair the previous weekend but had an unavoidable conflict.

This week, we plan to attend Brady Days, the Logan County Fair parade, and then up to Mullen for the Hooker County Fair and parade. Should be a great weekend, and we’re looking forward to it.

This week, I want to respond to the many questions and concerns about LB514, the voter ID bill. Last November, Nebraskans overwhelmingly approved Ballot Initiative 432, the Photo Voter Identification Initiative. Ballots indicated that “A YES vote supported amending to Constitution to require valid photo identification in order to vote and authorize the state legislature to pass laws to specify the photo identification requirements.”

It is important to remember that, although the Legislature was given the authority to develop the rules, state laws must not violate the National Voter Registration Act of 1993 (NVRA). The NVRA (also known as the motor voter law) sets forth certain voter registration requirements with respect to elections for federal office. The NVRA requires that State offer voter registration opportunities at State motor vehicle agencies (section 5), by mail-in application (section 6), and at certain State and local offices, including public assistance and disability offices (section 7). The NVRA then goes into detail as to how each of the sections listed above are to be carried out. The NVRA also provides the process required to be followed for first-time voters who register to vote by mail.

Because of NVRA, the Legislature’s Government, Military and Veterans Affairs Committee had limited flexibility in writing the rules to implement Initiative 432. Three bills were introduced to deal with this issue, but ultimately Senator Brewer’s LB514 was amended and passed near the end of the session to set up the rules for enacting this initiative. This bill was hotly debated in the Committee but passed by an overwhelming majority when it reached the full Legislature. The Unicameral will continue to evaluate what changes need to be made to ensure our elections are fair, but in the end, this bill fulfills the requirements of Initiative 432 and falls within the guidelines of the NVRA.

One of my concerns from the beginning was to make certain that all eligible voters have access to vote and that everyone who wants to vote can do so with limited barriers. However, I have always believed that votes should only be cast by eligible voters and only be counted once. Voter ID, when crafted correctly, can increase election security without keeping eligible voters from exercising their rights.

Now that legislation has been passed, please remember that you need to bring a qualifying photo ID when you vote in all future elections. There are several qualifying photo IDs, including a driver’s license, military ID, and photo IDs issued by a Native American Tribe, an assisted living facility, a hospital, a skilled nursing facility, or a nursing home. There are also procedures to confirm the identity of those casting a provisional ballot.

As we get closer to Nebraska’s next election, the May 2024 primary, the Secretary of State’s office will post more information about the new Voter ID requirements at https://sos.nebraska.gov/elections/voter-id. In the meantime, the website includes a link to the final language of LB514. If you are interested in learning more about the federal NVRA, you can find a summary and a link to the full text through the U.S. Department of Justice’s site at https://www.justice.gov/crt/about-national-voter-registration-act#prov.

If you have questions about the Voter ID bill or other issues you’d like to discuss, please feel free to reach out to me directly at mjacobson@leg.ne.gov or 402-471-2729. I also look forward to seeing many of you in person as we travel throughout District 42 during the interim!

Housing supplies continue to be tight as our region continues to grow job opportunities, primarily due to high construction costs coupled with rising interest rates. This combination is making new housing unaffordable for far too many. Since there are limited lots ready to build on in many areas in District 42, it often becomes necessary to develop new subdivisions to create new lots. Given the infrastructure costs involved, new lots can cost as much as $100,000 per buildable lot. That does not leave much room in the budget to complete the home.

One alternative is to consider remodeling older homes. A second is to purchase older homes that are beyond repair, tear them down, and build a new home on the existing lot with the necessary infrastructure already in place. This can certainly help reduce building costs, particularly when paired with the Micro-TIF program.

Micro-TIF was first introduced by former Senator Mike Groene in an effort to incent property owners to fix up their existing homes in exchange for getting property tax relief on the incremental increase in property taxes resulting from the improvements. Unfortunately, the structure of the bill made it hard to achieve the goals envisioned. During this session, I introduced LB98 to improve the program. LB98 was eventually amended into and passed as part of LB531, one of the Urban Affairs Committee’s priority bills.

With the improvements made in LB98, Micro-TIF can provide the necessary incentives to spur improvements to existing homes or replace homes beyond repair.

Under the “regular” Tax Increment Financing (TIF) program, which only covers the purchase of land and installation of infrastructure, vertical construction expenses are “eligible” expenses under Micro TIF. This is important because the incremental property tax base increases significantly if an older home is torn down and replaced with a new home.

For example, let’s assume you can buy an older home on a lot with public infrastructure in place for $25,000. You tear the home down and replace it with a new home for an additional cost of $200,000. If the property has an assessed value after completion of $250,000, the increase in the annual property tax would be around $4,500/year versus about $375/year with the previous home. With Micro-TIF, the owner can put a Micro-TIF loan in place when the project is completed to help cover the costs of the improvements based on the value of the property tax increase. Keep in mind that the Micro-TIF loan would be separate from any other mortgage or construction loan.

The Micro-TIF loan is designed to allow the annual “increase” in property taxes paid each year by the homeowner (in this example, $4,125/year) to cover 15 years of payments, including both the principal and the interest. The loan, or note, is repaid from the property tax increase for the next 15 years or until the loan is paid in full, whichever comes first. In this example, the upfront note amount could be about $50,000, given current interest rates.

In sum, the property owner could borrow $50,000 on a separate note once the home is finished and have the note fully repaid from the property taxes rebated back to each year, based on the incremental increase in the assessed value.

The property taxes are paid by whoever owns the property now and in the future. The payments go back to the original owner/developer who paid for the improvements to the home and took out the note. The county treasurer will still collect the amount of property taxes that would have been paid to the taxing authorities if the property had not been improved. Only the “incremental” tax payments go to the owner/developer. After the Micro-TIF loan is repaid, the county treasurer will collect the full property tax payments going forward.

Some have said over the years that TIF removes property taxes from the property tax roles. The fact is, no taxes are removed because all existing tax base remains at the same level as they were set at prior to granting TIF. The “new” incremental tax base is only temporarily redirected to repay the loan that provided the incentive. It is important to remember that you cannot lose what you do not have. If the only way to get the new home built is to grant TIF, then what has been lost? Homes eligible for Micro-TIF will only sink further into disrepair if no investment is made. If we do not build more housing, then our ability to grow our market and fill open jobs will be difficult. We need to use all the tools in the toolbox to solve this problem.

I will be traveling to each of the communities in District 42 to meet with the town and village leadership to discuss the details of this program and how it could be used in each community. If used strategically, Micro-TIF can be an effective method of increasing new and improved housing options in our area.

Please continue to contact me on this and other issues at mjacobson@leg.ne.gov, or feel free to call my office 402-471-2729. My door is always open!

At the beginning of the year, Governor Pillen made it clear that he wanted every child to have an opportunity to receive the best education possible. This not only meant providing more funding for public schools but also finding a way for low-income families to access private schools if that was the best option for their children.

For years, we have allowed public school students to transfer between public schools (option enrollment) to allow each student to be in an educational setting that best suits their needs. In Lincoln County, approximately 70% of the students attending public school in the Maxwell District are “net transfer” students. Over one-third of the students in Hershey Public Schools are net transfer students, as are about one-third of the students attending McPherson County School in Tryon. Although there may be many reasons for this trend, it is clear that the parents of these students see value in moving their child to the school that best fits their learning style. However, many parents also believe that having their children in a private or parochial school is best for them. For that reason, the Governor and 33 members of the Legislature felt that providing a mechanism for children of low-income families to obtain scholarships to attend private or parochial schools made sense. In fact, prior to the passage of LB753, Nebraska was the only state without some kind of state support for this to happen.

Given all the misinformation floating around, I want to take some time to outline what the LB753 does and how the scholarship program works.

LB753 provides for a Scholarship Granting Organization (SGO) to accept contributions from individuals, corporations, and trusts to be used for funding scholarships for low-income students wanting to attend a private or parochial school. The donor would receive a dollar-for-dollar tax credit, not to exceed 50% of their current year’s state income tax liability. However, they would not be able to deduct that donation from their Federal income tax return. Once an SGO receives an application to fund a grant, they would confirm with the Department of Revenue that funds are still available. If so, the donation would be accepted, and the donor would receive their tax credit.

The SGOs must allocate scholarship funds based on the neediest applicants first. No more than 25% of the funds can be carried over from year to year should there not be enough qualified applicants. Any funds in excess of 25% would be returned to the state’s General Fund. This is not a voucher program, the state does not make any direct payments to any private school, and the SGO cannot limit educational scholarships to only one qualified school.

I worked with four of my colleagues during the session to make improvements to the bill and increase accountability. One such change is requiring an annual audit to be provided to the Department of Education. Senator Linehan was very open to working with us, and in the end, I believe this is a good bill that helps fulfill the goal of getting every student in the state access to the best educational environment. This is neither an assault on our public school system nor is it an attack on teachers. This is all about students and educational opportunities.

Some are claiming that this bill takes money away from public schools. This is simply false! This year, the Legislature increased funding to public schools by $1.309 billion. Annual funding was increased by $309 million, and $1 billion was set aside to ensure that sufficient funding would be in place should future revenues be reduced. The initial funds allocated to the Opportunity Scholarship Fund is $25 million in the first year. This program will be closely monitored to ensure that it provides the outcome that the Legislature intended. I am hopeful that it is given a chance to work.

Please continue to contact me on this and other issues at mjacobson@leg.ne.gov, or feel free to call my office 402-471-2729. My door is always open!

This last week was full of District 42 events! Julie and I had a wonderful time being part of the Sutherland annual Independence Day parade and talking to local constituents. I then welcomed Governor Pillen to North Platte to discuss his plans to connect Nebraska, an issue especially critical for those of us in western Nebraska. On Friday, we attended the celebration for the 10^th Anniversary of the opening of the Prairie Arts Center. Finally, we rounded out the week by attending the North Platte Pow Wow. In addition to being a time to experience Native American singing, drumming, and dancing, it was also a special chance to celebrate veterans. I look forward to attending more of these types of events throughout the interim!

This week, I want to continue discussing property taxes by giving you some more insight into the changes the Legislature made this year to the funding of community colleges.

As a reminder, property taxes are only assessed by local taxing authorities. In 2021, Nebraskans paid over $4.73 billion in property taxes. In comparison, $3.1 billion was paid in state and local sales taxes, $3 billion in net individual income taxes, and $644 million in net corporate income taxes. Schools accounted for 60% of the property tax recipients, followed by 16% going to counties, 11% to cities and villages, and just over 5% to community colleges. The remaining 8% of property taxes are collected by Natural Resources Districts, Educational Service Units, Fire Districts, Townships, and other local taxing authorities.

Originally, the funding for Nebraska community colleges was intended to be divided, 40% from State funding, 40% from local property taxes, and 20% from tuition. Although tuition continues to account for about 20% of the funding, the balance between state and local funding broke down over time, with local property taxes providing more than double the resources that the state appropriated.

LB342, enacted in 2007, created a state funding formula to fill in the difference between community college needs and locally available resources (FTE’s). Needs are based on enrollment and the cost of education (REU’s). Local resources are derived from property taxation. The formula allows for a 3% automatic growth upon the most recent years of expenditures, plus any additional growth experienced by the colleges.

The Legislature also enacted the Property Tax Credit Act in 2007 to provide property tax relief to Counties based on the real property value in each county. This credit began at $105 million and has steadily increased over the years. LB1107 was enacted in 2020 to increase appropriations to the Property Tax Credit Fund and establish the Nebraska Property Tax Incentive Act, which created a new income tax credit for property taxes paid to fund school districts.

LB873, passed in 2022, expanded the LB1107 credit program to add a new refundable income tax credit for property taxes paid to fund community college. The value of the tax credit is $50 million for calendar year 2022, $100 million for 2023, $125 million for 2024, $150 million for 2025, and $195 million for 2026. Since community colleges are expected to levy $265 million in taxes in 2023, a $195 million tax credit would offset 75% of the entire community college property tax burden.

Now in 2023, the Legislature approved LB253. LB253 provides that, beginning in Fiscal Year 2024-25, community colleges will no longer levy property taxes to fund operating expenses. Instead, the state will fund 100% of the operating expenses levied in Fiscal Year 2023-24, but in no case less than 7.5 cents per $100 of valuation. In the case of Mid-Plains Community College, this will result in additional funding because their leadership has kept their levy below the 7.5%. Kudos to Mid-Plains. The state will increase its funding by 3.5% each year to account for inflation. If the state does not meet its obligation, community colleges can implement a levy to make up the difference. The community colleges also retain the ability to levy 2 cents for capital improvements and continue any levies required to repay existing bonds.

As you can see, this is real property tax relief that the Legislature has provided to a local taxing authority. I was disappointed to hear the Southeast Community College Board of Governors has initially voted to raise their tax levy to the maximum this year to generate more reserves prior to the new law going into effect. The goal of the Legislature was to reduce property taxes, this action is insulting to the legislature and the taxpayers who live in their area. I have joined several of my colleagues by signing a letter addressed to the Board asking them to reconsider this action and wouldn’t be surprised if there was legislation introduced to make adjustments to the law next year if the Board moves forward. I hope that the Board does the right thing.

Please continue to contact me about issues impacting you at mjacobson@leg.ne.gov, or feel free to call my office at 402-471-2729. My door is always open!

I hope everyone had a safe and happy Independence Day! We are very blessed to live in a country that protects and cherishes our unalienable natural rights. It is an honor to serve you as part of our representational democracy. God bless America!

As we move into the heart of summer, I have had many questions regarding the status of the former State 4-H Camp, which was destroyed last October by the Bovee Fire. Both the Nebraska 4-H Camp and the Nebraska National Forest at Halsey are near and dear to my heart, and to many who make the trip to the area each year. The Nebraska 4-H Camp was first established in 1959. The Nebraska National Forest was established in 1902 and is the largest hand-planted forest in North America. About 12,000 visitors flock to the forest each year for camping, hiking, photography, hunting, stargazing, and relaxation. Finding a way to not only rebuild the facility but to build back something that could make a significant impact on the region has been one of my priorities since the fire.

Since the 4-H Camp was established, residential youth camping experiences have changed significantly. As a result, we now ask ourselves, what modern infrastructure should be in place to continue to host a residential 4-H camp as well as be maximized and utilized by the thousands of other patrons who visit the forest each year? Furthermore, how might that infrastructure accommodate visitors to the forest over the course of the entire year, not just during the summer months?

I am happy to report that I was able to work with my colleagues in the Legislature to create a $10 million matching grant for the first phase of the rebuild. I want to thank Jeff Yost and his staff at the Nebraska Community Foundation for all their help in setting the groundwork to get this project going. Jeff and I will continue to work together to complete a basic feasibility study and establish an initial board to lead this project forward. We will need to engage a broad group of stakeholders to ensure the project succeeds.

Key partners in this collaborative effort currently include the State of Nebraska, the University of Nebraska-Lincoln Extension, the Nebraska 4-H Foundation, the Nebraska Community Foundation, and local, regional, and statewide donors. Conversations have begun with the USDA National Forest Service and Nebraska Game and Parks Commission. The initial timelines are outlined below:

May 2023: State of Nebraska appropriation secured

June 2023: Begin facility feasibility study

Fourth Quarter 2023: Determine the site for the new complex and begin fund development assessment

Second Quarter 2024: Complete facility feasibility study and fund development assessment

Third Quarter 2024: Feasibility study accepted by the Nebraska Department of Economic Development and begin fundraising for Phase I

Third Quarter 2025: Complete Fundraising for Phase I and contract with a lead architect

2026: Complete construction of Phase I

This will be an ambitious undertaking, but I truly believe that this is a project that will have a profound impact on the region and the state. I will continue to be personally involved in the process and will be looking for any opportunities for additional state funding once we can prove-up our success in Phase I.

Please continue to contact me on this and other issues at mjacobson@leg.ne.gov, or feel free to call my office 402-471-2729. My door is always open!

With the Legislature out of session, it has been nice to spend more time in the District, but haven’t slowed down! Julie and I were able to attend the first night of the Miss Nebraska contest, which continues to be a major statewide event that is held each year in North Platte. I am so happy for Miss Nebraska 2023 Morgan Baird, who just completed two years of service as a page at the Nebraska Legislature. Given all the late nights as we ended the session, she had little time to prepare for the contest, yet her performance was flawless.

We also participated in some of the NebraskaLand Days activities, including the parade. Julie and I plan to attend as many of the upcoming parades as we can throughout District 42, as well as town hall meetings and other local events. Feedback from constituents is very important to me, and I look forward to having more time to see folks face-to-face.

Two weeks ago, we also had the opportunity to attend the 90^th Anniversary of Farm Foundation in Chicago. I was fortunate to be invited into membership over 10 years ago and have always enjoyed attending their semi-annual meetings. Farm Foundation is a policy research organization comprised of 150 members who are industry experts in the food system, including former Secretaries of Agriculture, large producers, processors, retailers, agricultural economists, and environmentalists. I was especially pleased to have been asked to lead a panel discussion at this meeting on the future of ag finance and business structures. As the capital required to operate profitable farms continues to rise, many producers will be looking to unlikely partnerships to access the capital needed to operate in the future.

Property taxes are a big component of the cost of running an agricultural operation, but they are a significant expense for any landowner. I continue to receive a lot of questions and complaints regarding recent property value increases, so I thought it might be good to review the process once again.

Property values are subject to review as of January 1 each year. A yellow card indicating the valuation change is sent to each property owner once a change is made. Valuations are based on a number of factors, including what the market value of your property might be and how similar properties have been valued. Currently, we are experiencing a shortage of homes and inflated construction costs. This means that the same home is selling for more than it would have even five years ago. Because the market is placing a higher value on properties, valuations are going up.

It is important to note, however, that a higher valuation does not alone indicate your property taxes will increase. Before your property tax can be determined, each local taxing authority must set its budgets (generally in October) and hold a public hearing before approving the budget. The State has no power to assess property taxes, which is why it is so important for people to know about and participate in the local budget process. You should receive another postcard in the mail alerting you to local budget hearings.

Once budgets are approved, the County Treasurer compiles all the tax requests for each taxing authority (County, City, School District, Ag Society, Airport Authority, Community College, etc.). The total requests and the property available to tax within each authority’s jurisdiction are used to determine what level the mill levy must be to generate the necessary taxes to fund all the local taxing authorities. The mill levy determines your property tax.

Again, the State only generates funding from income taxes, sales taxes, and fees. Since property taxes are assessed and collected at the local level, the Legislature cannot directly lower your property tax bill. However, the Legislature has tried to lower property taxes indirectly. First, the Legislature approved a significant increase in State aid to local school districts, which account for approximately half of your property tax bill. Our hope is that more State aid will reduce districts’ reliance on local property taxes.

Second, the Legislature provides property tax credits and rebates based on what you pay for support of local school districts and community colleges. Last year, that number amounted to 30% of the property taxes you paid to those entities.

Finally, the Legislature voted this year to begin funding the operation of community colleges at the state level, as it does with state colleges and the University system. Soon, property taxes for community colleges will only be assessed to pay off existing bonded indebtedness. Ongoing support will come from state support, tuition, and grants.

So, take a deep breath when reviewing your property valuation statements because it is only one piece of the puzzle. Although you may not have improved your property over the last few years, the market value has increased due to the cost of new housing and the short supply. It is good to have your value go up, but it is bad if that increase results in higher taxes. It is up to the local taxing authorities to determine how much the increase in property values affects your tax bill.

Please feel free to reach out to me at mjacobson@leg.ne.gov or 402-471-2729 about issues impacting you. My door is always open!

Last week, I discussed the progress made by the Legislature this year to curb property taxes. This week, I’m addressing the work done on income taxes and social security taxes at the state level.

Currently, Nebraska’s current top marginal income tax rate of 6.64% ranks 31^st among all states. Although this is in the middle of the pack nationally, it is higher than any of our surrounding states. Wyoming and South Dakota have no state income tax, Colorado’s is 4.40%, Missouri’s is 4.95%, Kansas’s is 5.7%, and Iowa’s is 6.0%. However, Iowa’s Legislature has voted to reduce their highest rate to 3.9%. If we want to attract more industry to Nebraska, it is imperative that we have a competitive income tax rate.

Passed this year, LB754 was a Revenue Committee bill that made changes to our income tax system. First, LB754 lowers the rate for the top two individual income tax brackets and the corporate income tax bracket to 3.99% by 2027. The rate for the lowest income tax bracket is 2.46%.

Some have criticized the adjustments as tax cuts for the wealthy, but it is important to note how quickly individuals can move through our state income tax brackets. If you are a single person (or married but filing separately), you start to pay income taxes on income over $3,440 (Bracket 1). Bracket 2 taxes income between $3,441 – $20,590, Bracket 3 between $20,591 – $33,180, and Bracket 4 taxes any income above $33,180. If you work 40 hours per week, $33,180 represents an hourly income of $15.95/hour. Current Census data show that the median household income in Nebraska is $66,644, the average household income is $87,815, and the per capita income is $35,189. Only 6.2% of Nebraska households are “high-income” households that make over $200,000 per year.

If the rate for the top two tax brackets was 3.99% today, like it will be in 2027, that rate would apply to individual income over $20,590 and dual-income filers over $41,190. The 3.99% rate would kick in below the median, average household, and per capita individual income levels. Clearly, most Nebraskans will get a tax cut.

In addition to cutting income tax rates, LB754 also exempts 100% of Nebraskans’ Social Security income from state income tax beginning in tax year 2024. Previously, our Social Security tax was set to phase out in 2025. LB754 also allows federal retirees to exclude the amounts received as annuities under the Federal Employees Retirement System or the Civil Service Retirement System from their federal adjusted gross income.

Finally, LB754 was amended to include provisions of LB318, which authorizes the Nebraska Department of Revenue to approve up to $15 million in refundable income tax credits each year for parents and legal guardians paying for child care. The tax credit is available to qualified individuals whose child receives qualified care, is enrolled in a childcare subsidy program, or the household income is below 100 percent of the federal poverty level. The amount of credit available is based on the taxpayer’s total household income. Similarly, the measure allows for credits for contributions up to $100,000 to establish or operate eligible childcare programs. Lastly, tax credits available under the School Readiness Tax Credit Act for childcare providers and employees are increased. These provisions will go a long way toward helping make childcare more affordable and solving our challenges with workforce shortages.

Many have asked if these cuts and credit programs are sustainable. Only time will let us know how our economy will perform, but the Legislature was careful to preserve a cash reserve (rainy day fund) of nearly $1 billion. In addition, the budget approved for the next two years provides for only a 2% increase in spending. Historically, we have always had at least a 3% increase in revenue. I am optimistic that this is indeed a sustainable plan.

The income tax cuts and credits in LB754 are just one piece of the puzzle. When paired with the school funding and property tax reduction measures I discussed last week, we are doing everything we can to keep Nebraska competitive and protect taxpayers like you from being over-taxed. As a rural Senator, I will continue to advocate for an equal amount of property tax reductions to match any income tax reductions. Since the State does not assess property taxes, the only way the State can impact local property tax rates is to increase state aid to public schools, in turn allowing local taxing authorities to reduce property tax requests and/or give property taxpayers a direct property tax rebate. The Legislature is doing both.

Please continue to reach out with questions about laws passed this session or issues to address next year. You can reach me at mjacobson@leg.ne.gov or 402-471-2729. My door is always open!

Now that the Legislature has adjourned for the year, I will be spending the next few weeks analyzing the bills that were passed this session and sharing with you the impact that the new laws will have on the residents of District 42.

As we discussed previously, this legislative session was far from normal. Once the filibusters began, it became clear that getting bills passed in a conventional way would not be easy. Typically, every Senator priority bill would at least get debated, as would the 25 Speaker priority bills and each standing committees’ two priority bills. This year, however, only 56 bills were passed on Final Reading and sent to the Governor’s desk for his signature. This doesn’t necessarily mean we were less productive, though.

Committee priority bills have traditionally been sent to the floor with a few other bills in the committee’s jurisdiction grouped together in the committee amendment (also known as a Christmas tree bill). Since so few bills were able to be debated this year, most committees were only able to get one of their two priority bills heard. In addition, we were kept from doing a consent calendar or hearing many of the individual Senator or Speaker priority bills. Accordingly, the committee priority bills that made it on the agenda included many more bills in their packages than normal. In many cases, additional amendments were offered to add even more bills to the introduced bill.

In the end, of the 821 bills that were introduced, 291 bills will become law via the 56 bills that passed Final Reading. This compares favorably to the last two 90-day sessions in 2021 and 2019, where the Legislature passed 281 and 322 bills, respectively.

I thought this week might be a great time to discuss property tax progress in this legislative session. Many of you received your new property “valuations” over the past couple of weeks and are now wondering how much your property taxes will rise as a result. First, let me be clear that the valuation of your property is just one part of the tax equation. The “mill levy” is the other half of the equation. You will not know the mill levy until taxing authorities complete their budgets this fall. Once budgets are completed, the county assessor will add up all the budget requests and then divide that total into the gross property values to determine the consolidated mill levy necessary to fund the budgets.

It is important to remember that the state does not have any authority to tax real estate. The state generates its income primarily from income taxes, sales taxes, and fees. The state can, however, impact your property tax level by providing state revenue to public schools, which are the largest property taxing entity.

Nebraska historically has ranked 49^th in the country for state aid to public schools. This aid is provided through the Tax Equity and Education Opportunities Support Act (TEEOSA) formula. This formula essentially considers each school district’s needs and the value of its resources (property values) and grants state funds to schools accordingly. This is referred to as “equalization” aid. Unfortunately, only the larger school districts in the state receive equalization dollars, and nearly all the small school districts (all but one in District 42) do not receive equalization aid.

This year, the Legislature passed major education funding reforms in LB243. First, it placed $1 billion into the Education Future Fund to be used as reserve funds to ensure continued additional funding to public schools. It also expanded annual public school funding by over $300 million by increasing current state aid to equalized schools and providing $1,500 per student in aid to all unequalized schools. We also increased special education funding from 40% to 80% of special education costs.

In addition to increasing financial support, the Legislature took steps to limit annual school spending growth to 3%. Many felt the cap was necessary to ensure the new funding actually goes toward property tax reductions. If the state provides more revenue, it is expected that less revenue will come from property taxes.

Additionally, LB243 increases the minimum amount of rebates provided through the Property Tax Credit Act. This Act refunds a percentage of the property taxes paid to your local school district and your local community college. The minimum amount of funding available each year beginning in 2023 is $360 million. This amount will grow each year until it reaches $475 million in 2028. The Legislature also will be removing community colleges from the property tax rolls. Instead, the State will fund their operating needs, just as they do for the University and the State colleges today. Community college assessment will only remain to pay off existing bonds.

The work done by Legislature this year in property tax reform was monumental. There were also major strides in income tax reductions, which I will address that next week.

It has been an honor representing you this past year, and I look forward to hearing from you regarding any issues you may have. Please feel free to reach out to me directly at mjacobson@leg.ne.gov or 402-471-2729. My door is always open!