This week, the Legislature is hosting the newly elected state Senators for the semi-annual orientation to the Legislature. To put this in perspective, remember our current term-limit system of two consecutive four-year terms. With 49 Senators in the Legislature, there is no even distribution of members. My current freshman class, who served in the 108^th biennium, will move to the sophomore class when the 109^th Legislature begins. There were 14 new members when my class was elected. Meanwhile, the current incoming freshman class consists of 17 individuals. The incoming senior class consists of ten Senators, and the incoming junior class has eight members. Since some of the members of each class may have been appointed, they may have more or less than eight years to serve. Additionally, some Senators were term-limited in the past and have been re-elected for another four years.

I outline the current classes to give you an idea of the limited experience this 109^th Legislature will have to work with. Several members in my class will become committee chairs this next biennium. It should also be noted that, given the size of the junior and senior classes, there will be fewer new Senators joining the Legislature in upcoming election cycles unless incumbents fail to be re-elected or choose not to run for re-election.

Although much progress has been made during the last eight years in reducing taxes and regulations, there is much more work to be done. As I have shared in the past, the rural/urban divide is alive and well, so further progress on taxes will include placing Senators from the third caucus in positions of leadership on the committees that can make a difference. It will also mean building relationships throughout the Legislature to put us in the best position to pass meaningful legislation.

I am pleased with the new western-Nebraska Senators entering the Legislature this fall. Paul Strommen, Tanya Storer, and Stan Clouse will be ready to hit the ground running. I really look forward to working with them. I also will miss working with their predecessors: Senator Steve Erdman, Senator Tom Brewer, and Senator John Lowe, respectively. We did not agree on every issue, but we always came together on the important votes. I want to thank all of them for their service to the Legislature and to greater Nebraska.

Julie and I did have the opportunity to ride in the North Platte Veteran’s Parade last week. It is a true privilege to honor the men and women who served our country in the armed forces. Every day is a good day to honor Veterans. I will be bringing a bill to try to do more for those Veterans who return home with handicaps. It is the very least we can do.

We also made the trip to Los Angeles for the USC football game with a large group of boosters and alumni who support the Huskers, win or lose. All of you know that I hate losing, but I see Coach Rhule building something great in Lincoln. I hope everyone gives him time to do just that. Our team is loaded with true freshmen, some of whom start today. The bulk of the team consists of freshmen and sophomores. (Just like the Legislature!) I see a bright future. Meanwhile, let’s get behind the team on Saturday as they take on Wisconsin. We just need one more win to be bowl-eligible, and I believe both of the last two games are winnable if they play within their ability.

I look forward to continuing to hear from you about issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or 402-471-2729.

I want to start this week by thanking our military veterans for their service to our country. I hope everyone takes a moment on Veterans Day, on the eleventh hour of the eleventh day of the eleventh month, to reflect on the sacrifices made by the men and women in our military and their families. Particularly in a time when our nation feels very divided, our service members work to protect ideals and freedoms that are bigger than any one person and span back further than any elected official’s term. Thank you for your service and sacrifice.

I also have another set of families on my mind this week. It has come to my attention in recent weeks that United Healthcare/Optum has distributed notices to many of the state’s Applied Behavioral Analyst Therapy (ABA) providers that they intend to cut Medicaid reimbursement rates by 50% or more. ABA providers deliver therapy services to autistic children in our communities. Optum contracts with the State of Nebraska to deliver approximately 1/3 of services to low-income children and youth in the state.

I am concerned about the affects these cuts will have on our communities, particularly in rural areas. Access to services – including healthcare services – is a major factor in recruiting families to come to and stay in rural Nebraska. Although providing these services sometimes comes at a cost to the taxpayer, inability to access services come at its own expense.

For children with autism, early intervention is critical. ABA therapy programs can help increase language and communication skills; improve attention, focus, social skills, memory, and academics; and decrease problem behaviors. Therapies are most effective when delivered in-person and a robust provider network cannot be replaced purely by telehealth. It is vital that we keep quality providers in Nebraska.

Without early access to therapy services provided by ABA practitioners, many children with autism cannot be successful in school and the best they can be in their adult lives. Over many years, the Legislature has chosen to invest in these life-altering services, a critical decision which will reduce the need for a long-term financial commitment in public assistance and healthcare services. It also reduces strain and expense in our school systems, which already struggle to hire and keep paraeducators and special needs teachers.

Notices about these drastic cuts have been sent to some of the state’s largest providers. Many are concerned about their ability to keep operating in Nebraska. Optum cites a rising number of claims and higher-than-average reimbursement rates as justification for the cut. To me, the increasing claims show the need for ABA services across the state. Optum is required in its contract with the State of Nebraska to maintain an adequate network of providers. I am worried that if Nebraska takes the significant step back in rates that Optum is proposing that we will begin losing therapists and providers to other states.

I understand that there has to be a balance between insurance providers and healthcare providers. I also think it’s important that the State be strategic in how it invests taxpayer dollars. Low-income children and youth with autism are not big corporations and health systems going to battle. These are some of the most vulnerable in our communities and an early investment in their care can set them up to be good students and productive citizens in the future.

It is for these reasons I have agreed to sign-on to a letter to United Healthcare that is currently circulating asking United/Optum to “show their work” on how they justify cutting Medicaid reimbursement rates for ABA services in half without affecting network adequacy. I am not convinced that these cuts won’t hurt our children and families.

It is a privilege to represent you in the Nebraska Legislature, and I look forward to hearing from you regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.

As I sit here on Sunday afternoon, I am trying to find ways to get the Husker football loss out of my mind. I came up with two positives. First, the Huskers have a bye next week, so the odds of a loss this week is very low. Second, come Wednesday morning, all the political ads, text messages, phone calls, and emails will come to an end. Halleluiah!!

Just imagine if every political ad was fact-checked and ambiguous statements required context. That would significantly change the content of many political ads. However, it is instead up to the viewer to determine the truth from misleading statements and outright lies.

One of my favorite promises is how candidates will fix the border problem, our national debt, every other decade-old problem that ails America. If it were that easy, it would have already been solved. At the federal level, we have the Presidency, the Senate, and the House of Representatives. The President has the power to issue certain executive orders, but those are generally limited. The U.S. Senate consists of 100 members, two from each state. Control of the U.S. Senate is determined by which political party has the majority of the members. Any registered Independents can choose to caucus with one party or the other. They then are counted in the total of the party they caucus with in determining a majority. In the event of a tie vote, the Vice President breaks the tie.

It is also important to note that the U.S. Senate must confirm any appointments to the Supreme Court made by the President. If your political party does not control the Senate and the Presidency, getting a Supreme Court justice confirmed becomes virtually impossible if they have strong political leanings. Also, keep in mind that “seniority” is huge at the national level. It is seniority that determines key committee appointments and chairmanships. We all want to vote for the person but don’t forget the impact that political parties have at the national level.

When it comes to passing legislation, keep in mind that your bill must pass both houses of Congress, and get signed by the President. Since most bills are combined into several other bills before final passage, it is very possible that you will be forced to choose if the bad parts of the bill outweigh the good parts of the bill if you vote yes. But rest assured, your future opponent will be sure to point out that you voted for a bill that had the bad components in it without pointing out the positive components. That is how politics works.

At the state level, we have one house (Unicameral) that is made up of 49 state senators. Each senator represents a roughly equal number of constituents. As the state’s rural areas have lost population, the geographic size of the districts has grown. The Unicameral is non-partisan, meaning that you do not run as a Republican or a Democrat. However, political parties do play a role behind the scenes and we’re all aware of other Senator’s party affiliations. The state is divided into three caucuses. Caucus lines are determined by the lines of the legislative districts, but are relatively similar to Nebraska’s three Congressional Districts. The third caucus is represented by 16 state senators, as is the first district, and the second district is represented by the remaining 17 senators. Membership of the 14 standing committees includes members from each caucus to ensure equal representation.

If you want to pass meaningful legislation with an element of controversy, it is imperative to know that you can get 32 other state Senators to join in voting for cloture (to stop a filibuster). The battle lines are clear between conservative vs progressives, and rural vs urban. If you can build relationships, and navigate those challenges, you can get legislation passed at the state level. But just remember: If it was easy, it would already be done.

If you have not yet voted, I encourage you to do so. Every vote counts, and votes are particularly impactful at the local level. And, remember, advertisements do not always tell the entire story.

It is a privilege to represent you in the Nebraska Legislature, and I look forward to hearing from you regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.

I want to focus my comments this week on Tax Increment Financing (TIF) and why it is the best economic development tool that the state may have ever created. I say this because TIF (if properly approved) has no cost to the taxpayer while growing our total tax base and having no impact on our current tax base.

With TIF, as the name implies, the “Incremental” increase in property taxes due to the project getting built is “divided” into two portions: the base property tax value and the increase in the incremental value. The increase portion is then used to repay the TIF bond. This division of taxes stays in place for up to 20 years (if the project is in an extremely blighted area) or when the bond is repaid, whichever comes first. The local TIF authority, the Planning Commission, and the City Council must approve all traditional TIF projects, and the City Council must approve all Micro-TIF projects.

The initial TIF bond is funded by the developer (applicant). They generally will borrow those funds from their project lender. The CRA will then issue the bond and send the funds back to the developer (applicant). The developer will also hold the TIF bond, which gives them the right to receive the increase portion of the divided property taxes resulting from the project. That bond is generally pledged to the lender as additional collateral.

If the TIF project results in the developer owning the project post-construction, the developer pays all the property taxes going forward including the incremental real estate taxes. Those incremental real estate taxes then repay the TIF bond over time. If the taxes collected along the way do not produce sufficient property tax revenue over the life of the bond, it is the developer who takes the loss.

So, let’s do a quick recap. Who funds the fund? The developer. Who receives the bond proceeds? The developer. Who repays the bond? The developer. Who takes the loss if the project does not generate sufficient funding to repay the bond? The developer.

And, if the project otherwise would not have been built, would the “increment increase” ever exist? NO.

And there is much more!

A TIF bond only captures the incremental increase in “property taxes.” All of the pre-development property tax base continues to be collected by local political subdivisions. Additionally, all new sales taxes on materials purchased for the project and all new personal property taxes go to the taxing authorities.

When using TIF for housing, we make great progress in solving our housing shortage and create jobs. The new residents moving to the area to live in the new housing will fill open jobs and generate more disposable income to grow our sales tax base.

If you sit on the board of a local taxing authority and oppose TIF, I would like to know why. Do you not want to build new housing or improve existing housing in blighted areas? Do you not want to fill the open jobs? Do you not want to grow our tax base?

I also want to mention the recent audit on the use of TIF in Nebraska issued by State Auditor Foley. I have great respect for Auditor Foley and do not disagree with some of his findings. I have always believed that Omaha has used the program in a very aggressive fashion (such as the proposed street car project). He also found that a few smaller communities do not have a good system in place to monitor the progress of the TIF bond repayment, causing some taxes to continue being divided after the bond has been repaid. However, these are not problems in every community. I know firsthand that the North Platte Area CRA has a great system in place and is in full compliance with state law.

If we want to continue our current growth path, it will be imperative that our local leaders understand TIF and how it works.

It is a privilege to represent you in the Nebraska Legislature, and I look forward to hearing from you regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.

Over the past few weeks, I have gotten many calls and emails regarding Medicare Advantage and why Great Plains Health and several other rural hospitals gave notice that they will no longer be accepting those plans as of January 1, 2025.  One constituent in particular called me last week and asked that I provide the rest of the story behind the GPH decision to discontinue accepting Medicare Advantage plans.

Medicare is the federal health insurance program for Americans age 65 and older and provides a range of health service for seniors.  Medicare Advantage is a private plan alternative to traditional Medicare that is required to provide the same “minimum” levels of coverage as Medicare.  Insurance companies with Medicare Advantage plans contract with the Medicare program and receive payments for providing services on a per beneficiary basis.

Both traditional Medicare and Medicare Advantage must cover services that are “reasonable and necessary for the diagnosis or treatment of the illness or injury.  Under Traditional Medicare, patients receive care at Medicare-certified facilities, and the facility or the provider then submits a report of their cost to Medicare Administrative Contractors for processing and reimbursement determination.  These facility or provider claims are also subject to various compliance and auditing efforts to prevent improper payments.  Because they take place after care (and sometimes after payment) has been provided, these processes are sometimes called “retrospective review”.  Medicare Advance insurers by contract, frequently require patients and providers to obtain prior authorization before receiving care.  Over the years, the use of pre-authorizations as a tool to deny care and delay payment to providers has exploded.  The combination of denying pre-authorizations, not approving transfers from acute care to long-term care, and forcing providers to accept payment rates well below Traditional Medicare has brought us to the place we are today.  Let me be very clear, this problem was not caused by the hospitals, this issue is fully is in the hands of the Medicare Advantage insurers who are trying to increase profits at the expense of the providers and the patients.

On May 17, 2023, the Permanent Sub-Committee on Investigations launched an inquiry into the barriers facing seniors enrolled in Medicare Advantage in accessing care.  The following is a quote from that report.

“Although the Subcommittee’s recommendations in this report are targeted at regulators, this should not distract from the fact that it is insurers who are using prior authorization to protect billions in profits while forcing vulnerable patients into impossible choices.  This is particularly troubling when recent analyses indicate that Medicare Advantage is more expensive than Traditional Medicare, with one assessment concluding that in 2024, the government spent 22 percent more to fund Medicare Advantage plans than it would have had those beneficiaries been enrolled in Traditional Medicare.  There is a role for the free market to improve the delivery of healthcare to America’s seniors, but there is nothing inevitable about the harms done by the by the current arrangement.  Insurers can and must do better, for the sake of the American healthcare system and the patients the government entrusts to them”

It is a privilege to serve as your state Senator and I look forward to hearing from you on issues that top of mind for you.  I may not have all the answers, but my staff and I will work hard to find the answers.

Last week, the North Platte Area Chamber and Development Corporation held its annual meeting and awards dinner. Congratulations to all the deserving award winners; they all played a role in the continuing economic growth of our area.

I was honored to be asked to say a few words at the event. My remarks focused on the value of economic growth and the need to grow Nebraska. Clearly, Nebraska is a high-tax state compared to our neighbors. There are many reasons for that, but it has much to do with our population. Although South Dakota has half the population of Nebraska, they have no income tax and low property taxes, but charge a sales tax on many items. They also have fewer counties and fewer public schools. But, most importantly, a large portion of the sales tax revenue is collected from people who live outside the state but come to South Dakota for their tourist attractions.

If Nebraska wants to lower its tax burden by growing the state, we will need to see through the income tax cuts that are phasing down to 3.99%. This will make Nebraska competitive with our neighbors and neutralize the competitive disadvantage when recruiting and retaining employers. Lower income taxes help attract and retain employers who place a high priority on where they locate based on income taxes.

We will also need to have housing available if we want to attract workers to fill those newly created jobs. A large component of housing costs is our property tax rates followed closely by our high insurance rates. The insurance rates are higher almost entirely due to our high incidents of hail and wind losses. As a result, we will need to continue to be creative in providing incentives that have no direct upfront costs to the state. Today that incentive tool is Tax Increment Financing (TIF), where the developer repays bonds for improvements over time from incremental property taxes that otherwise would not be collected had the project not been built.

I believe that restoring some sales taxes that were exempted over the years and using those dollars for direct property tax relief would go a long way toward restoring the balance of our tax base. We can also take a page from the South Dakota playbook by collecting sales taxes from those traveling through Nebraska. Having non-residents help offset our high tax status is always welcome.

There will be more debate this coming session regarding ways to lower property taxes. The debate will likely focus on both state spending cuts and revenue growth to add to the property tax credit fund established through LB34 during the special session. Because of the focus on providing property tax relief, other spending bills will struggle to get traction in this coming session.

I also want to comment this week on questions I have received regarding the Corporate Transparency Act. This is a federal act that is designed to provide transparency regarding ownership of corporations, LLCs, and other partnerships. If you are an owner of a corporate entity created before 2024, you have until yearend to report the ownership makeup of the entity to FINCEN. Although most initially react to this requirement as more government overreach, we need to keep in mind that if we are serious about restricting foreign ownership of farmland and other businesses, we must know who the underlying owners of these entities are. Today, all that is on the public record for these entities is the list of board members and officers. These positions can easily be filled by U.S. residents willing to be paid to serve in these roles. If you have questions regarding this new law, I encourage you to contact the attorney who created your entity or your tax preparer to help you with the filing requirements.

I look forward to continuing to hear from you about issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or 402-471-2729.

This week, North Platte Regional Airport (Lee Bird Field) held a groundbreaking for the new Terminal Building. This is a major milestone for North Platte and the entire region. Many years of planning went into the development of the plan and the fundraising to make this project a reality. I cannot begin to adequately thank U.S. Senator Deb Fischer for her work in making this happen. It was Senator Fischer who secured an additional $7 million in federal dollars that got the funding to the finish line. Her committee role and tenure in the U.S. Senate were key. I have always appreciated her intellect and ability to get things done. We are so fortunate to have her in Washington working for us.

With the election a month out, much attention has been given to the potential election results and the impact it could have on the Nebraska Legislature. There are 15 current Senators who are either term-limited or have chosen not to run for a second term. This will bring at least 15 new Senators to the 108^th Legislature to join the Senators who are just now completing their first two years. With nearly two-thirds of the body made up of those who served less than three years, there will be many leadership changes and a significant loss of institutional knowledge. However, I am impressed with the leadership skills of many in my class and have been impressed with the backgrounds of several likely incoming Senators as well.

Once the election is over, there will be a push to identify likely standing committee chairs for the next biennium, as well as slotting the remaining Senators into the 14 standing committees. Standing committees typically meet for either one, two, or three days each week, and Senators are assigned a combination of standing committees so they have a committee meeting every day. The Appropriations Committee is the only committee that meets five days per week. The three-day committees meet on Wednesday, Thursday, and Friday, while the two-day committees meet on Monday and Tuesday. There are four one-day committees that meet either on Monday or Tuesday and the Nebraska Retirement Systems committee meets on an as-needed basis.

I currently serve as vice-chair of the Banking, Commerce and Insurance Committee and the Natural Resources Committee. I plan to run for Chair of the Banking, Commerce and Insurance Committee this next biennium and hope to move to the Revenue Committee for my three-day committee. I am also optimistic the third caucus will continue my service on the Executive Board and the Committee on Committees. There are several Special Committees and Select Committees that many of us serve on as well.

The next big legislative event will be the Annual Legislative Council Meeting to be held on December 12-13 in Kearney. This will be the first official meeting where all the returning and incoming State Senators meet to discuss potential rule changes and get a general overview from the Speaker regarding the coming legislative session.

Now that the Capitol construction is coming to an end, every Senator will be back to officing on the first or second floor of the Capitol. No one will remain in the tower. However, assigning offices is no small feat. All returning Senators will remain in their old offices until the first day of the session when leadership and standing committee chairs are elected. Every standing committee has an assigned office in the Capitol, so those newly elected chairs will move to their new offices following the election. From there, offices are assigned based on seniority. If you are an incoming Senator or a senior Senator who moves offices, you may be without a computer or phone for a day or two until all the other moves are completed. Meanwhile, bill introduction is taking place, and committee meetings are beginning. The first week of a new biennium is a real zoo, but somehow it seems to work.

I have begun drafting bills for the next session and look forward to your input regarding issues that are important to you. Now is the time to get that information to me so it can get included in newly proposed legislation. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or 402-471-2729.

I want to thank the Lincoln County Farm Bureau for hosting me at a town hall meeting at the McKinley Education Center this past Saturday night. It was a great opportunity to hear from constituents firsthand on issues important to them.

I began the meeting by updating those in attendance on the Special Session and what I believe was accomplished. Clearly, the session fell short of the Governor’s expectations, but frontloading the LB1107 income tax credit and setting up a mechanism to fund additional direct property tax relief was important. It was also important to ensure that, going forward, the local property taxing authority of cities and counties will be capped at a rate in line with inflation and real growth. Additionally, the body was able to engage in some good discussion on what items currently exempt from sales tax could, in fact, be added back to the sales tax rolls to provide additional property tax relief.

The pushback from the urban Senators on expanding the sales tax base demonstrated why the EPIC consumption tax is unlikely to ever pass the Legislature. Further, if a version of this tax were to pass by a ballot initiative, the ability to return dollars to rural Nebraska would be very challenging. It is for that reason that I remain focused on finding ways to increase funding for the new property tax credit that taxpayers will begin to see on their 2024 property tax statement, which should be sent out in early December.

Remember that the property tax credit you will receive this year will represent the dollars that would have been paid out in an income tax credit in 2025 for those who paid their school property taxes for 2023 in the 2024 calendar year. Thus, we “front-loaded” the 2023 income tax credit to a property tax credit in 2024, thus eliminating the need to file for the public school income tax credit. For those who escrow their property taxes with their house payment, you will see a house payment reduction due to the net reduction in 2023 property taxes due in 2024 once your mortgage servicer recalculates your new escrow. Keep in mind that you may see an increase in insurance costs that would reduce the total payment reduction since they too would be included in your escrow payments, but regardless, your former sales tax credit is now coming early in the form of a direct property tax credit as outlined in LB34.

For those suggesting that there is a “lost year,” it should be noted that once your real estate is sold, the seller (owner) would be required to pay real estate taxes current at the time of the sale. The so called “lost year” would be made up then with a reduced property tax payment.

There has also been much discussion this past week regarding “winner take all” as it relates to the allocation of electoral votes in Nebraska. Each state can decide if they wish to allocate their electoral votes for President based on statewide results or by Congressional District. Nebraska has five electoral votes, one for each of our U.S. Senators and one for each of our three Congressional Districts. Nebraska has voted Republican for many decades on a statewide basis. The third Congressional District overwhelmingly votes Republican, and the first district (Lincoln and several eastern Nebraska counties) generally also votes Republican. The second district, however, which is essentially the Omaha metro area and parts of Sarpy and Saunders Counties, is considered a very “purple” district that swings back and forth between voting Republican and Democrat.

Nebraska is one of two states in the union that currently allocates electoral votes by district. Maine is the other state. Nebraska is generally a red state that votes Republican and Maine is a blue state that votes Democrat. In all likelihood, if the two states would both adopt the winner-take-all method, they would likely have no effect on the election.

So how did we get here? In 1991, the Nebraska legislature adopted LB115, introduced by then-state Senator Dianna Schimek, to cast electoral votes by district. The bill passed with 25 votes and was signed into law by then-Governor Ben Nelson. The rationale was that other states would follow our lead and more candidates would come to Nebraska. No states followed, and three years later, the first of several attempts to reverse the law began. Keep in mind that California has 54 electoral votes, and they are a winner-take-all state. Does anyone ever see the Democrats in California giving up that advantage? My view is that Nebraska should conform to other states and put us on an equal playing field. It is unlikely that a special session will be called to address this issue yet this year since the votes do not seem to be there to pass such a bill with the emergency clause (33 votes). I do, however, expect that this issue will return before the 2028 General Election.

It is a privilege to represent you in the Nebraska Legislature, and I look forward to hearing from you regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.

There have been several articles written and numerous newscasts suggesting that, somehow, property taxpayers lost out on their 2023 income tax rebate with the passage of LB34. I will devote this week’s article to explaining the misunderstandings and bringing more clarity to the situation. In the end, no one lost out, but some did end up with a bonus depending upon the timing of when they paid their 2023 property taxes.

LB1107 was passed by the Legislature in 2020 and was referred to as the Nebraska Property Tax Incentive Act. It created an income tax credit to help offset the property taxes paid to your local public school district. In most cases, property taxpayers receive their property tax statement in December of each tax year after all the taxing authorities have approved their budgets. Those property taxes are then “due” on December 31 of that year, but in all counties except Douglas, Sarpy, and Lancaster, the taxes for the current tax year are not delinquent if the first half is paid on or before May 1 of the following calendar year, and the second half if paid on or before September 1, of the following calendar year. In Douglas, Sarpy, and Lancaster counties, the taxes must be paid on or before April 1, and August 1.

Property taxpayers who paid their 2019 property taxes in 2020 could claim the income tax credit on their tax return in 2021. The total credits claimed in 2021 was $82 million out of $125 million available. The difference represented those who failed to claim the credit. Property taxpayers who paid their 2020 property taxes in 2021 were able to claim their credit in 2022. Total credits claimed amounted to $422 million out of the $548 million appropriated. Taxpayers who paid their 2021 property taxes in 2022 were able to claim their credit on their 2023 income tax return. That totaled $562 million in credits claimed out of $763 available. Finally, taxpayers who paid their 2022 property taxes in 2023 were able to claim their credit on their 2024 income tax return. The total claimed was $477 million out of $809 million available.

In this summer’s special session, the Legislature passed LB34 which eliminated the LB1107 income tax credit and replaced it with a direct property tax credit; that means taxpayers will no longer need to claim a credit on their income tax return. Instead, a credit will appear on your property tax statement along with the existing property tax credit passed in 2007. This will allow all Nebraskans the ability to receive the credit without taking any further action, thus eliminating the gap between the credits paid and the credits available. The property tax credit will begin this year and will be reflected on your property tax statement be mailed to you in December 2024 by the local County Treasurer. The state will simply pay the credit directly to each county when the statements go to the taxpayers to make the counites whole.

Had LB34 not been passed, any property taxes assessed for the 2023 property tax year paid in 2024 would have been eligible for the income tax credit in 2025. Instead, you will automatically receive your credit on your 2024 property tax statement. If you pay your property taxes in the following year, you will pay the reduced property tax bill in 2025 instead of receiving an income tax credit in 2025. The amount of the property tax credit statewide will be $786 million as opposed to just over $500 million had the income tax credit still been in effect.

So, who got a windfall? Those who paid their 2023 property taxes in 2023 instead of 2024 and also claimed their income tax credit in 2024 before the special session will receive both the income tax credit and the property tax credit, but keep in mind that they also paid their real estate taxes well before they were delinquent. Regardless, all taxpayers are receiving more property tax relief because of LB34. The numbers are clear.

In the end, there was no other way to make the transition from the income tax credit, which was costly to apply for and not fully utilized, to the new property tax credit system where every property taxpayer receives their credit. It should also be noted that the state actually paid more to make the transition and every taxpayer will receive at least as much in credits as they would have under the original program. There is no lost year; it is simply a change in how the credit is received.

I want to remind everyone that the Lincoln County Farm Bureau has asked me to participate in a town hall meeting on September 21 at the McKinley Education Center beginning at 6:30 p.m. I hope you will consider attending to get any of your questions answered and share with me any concerns you have.

I look forward to continuing to hear from you regarding issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or 402-471-2729.

I spent time last week updating you on the legislative efforts to bring property taxes down. Although the Legislature has limitations on what they can do to impact property taxes – which are assessed locally – the steps we took are now coming together.

It has always made sense that cities, counties, and most local political subdivisions should fund their own needs, with some exceptions. Meanwhile, public education is one of the Constitutional responsibilities of the state.

Today, the state already provides significant funding to public schools, but most of that funding has gone to larger schools where their property tax bases are smaller in relationship to their student population and student needs. The Legislature took steps two years ago to provide $1,500/student in “foundation aid” to all schools to help take pressure off local taxpayers. Additionally, the Legislature provides funding to schools that accept transfer students who live in other school districts and are seeking a better fit for them to maximize their learning experience, which is known as “option enrollment.” This funding approximates the average cost of educating a student and helps to offset the cost to property taxpayers in the receiving district who now take on the cost of another student.

I generally support option enrollment when it is used to improve student learning and when the receiving school district uses the additional student population to maximize teacher/pupil ratios. I am concerned, however, that unless we see significant student population growth from the recent economic activity, steps will need to be taken to address overhead expenses and better utilization of facilities. In the end, every school district needs to continue to manage per-pupil costs while still maintaining sufficient teaching staff and teacher compensation.

I have been watching closely the steps that all our political subdivisions are taking during this budgeting season. Property values went up approximately 8% this past year, so mill levies must come down to stop property taxes from climbing at that same rate. My early read is that budgets are getting scrutinized, and we will indeed see mill levies drop significantly to hold property taxes in check.

As the November elections draw closer, now would be a good time to familiarize yourself with all the ballot initiatives and the candidates who will represent your interests on the various boards and commissions. There are several debates scheduled as well. Plan to attend the debates and ask the tough questions to each of the candidates to understand their views and their commitment to making decisions that align with your values.

As I wrap up my comments this week, I want to mention the lawsuit brought by a young mother suing to stop the repeal of LB1402 from going on the ballot. LB1402 was passed by the Legislature this year. It repealed the funding for the LB753 Opportunity Scholarship Program (tax credits for those donating to the program) but left the scholarship program in place with a $10 million annual appropriation to fund scholarships to low-income students who choose to attend a private school that best fits them. This program, in many ways, mirrors the public school “option enrollment” program. Conversely, the total credits in LB753 were capped at up to $25 million annually.

LB1402 was in response to a ballot initiative funded largely by the Nebraska State Education Association (NSEA) to place a repeal of the funding mechanism of LB753 on the ballot this fall. Despite the Legislature’s change in LB1402, the NSEA once again spent hundreds of thousands of dollars in paid petitioners to place an initiative on the ballot to repeal the legislative appropriation.

The lawsuit challenges the constitutionality of repealing a legislative appropriation. The Nebraska Supreme Court has bypassed the District Courts due to the timing of the suit and will hear the suit this week. This ruling could have a significant impact on future legislation.

Finally, I want to remind everyone that the Lincoln County Farm Bureau has asked me to participate in a town hall meeting at 6:30 p.m. on September 21, at the McKinley Education Center. I hope you will consider attending to get any of your questions answered and share with me any concerns you have.

I look forward to continuing to hear from you regarding issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or 402-471-2729.