I have received many questions about the likely special session. Although the Governor hasn’t officially issued the call for a special session, he has notified the Speaker of the Legislature, John Arch, that Senators should set aside July 25 as the start date and the weeks that follow. Since this notification, the Speaker has begun the planning for a special session.

The initial planning has Thursday, July 25 as the start date, with Thursday, Friday, and Saturday being used for bill introduction. After each session day, the Executive Board – which serves as the bill referencing committee – will meet to reference bills to the appropriate committees. A special session can only be called for a single subject; in this case, the subject will be property tax relief. Because of the topic, bills will likely be referenced to the Revenue Committee, Appropriations Committee, or the Executive Board, although we could also see the Education Committee and Government, Military, and Veterans Affairs Committee come into play.

Once bills are referenced, the committee chairs will schedule each bill for a public hearing beginning on Monday, July 29. Once a public hearing has been conducted, the chair can then call an executive session to discuss the bill and determine whether it should be advanced to the full Legislature for consideration. Floor debate on advanced legislation can begin as soon as the Speaker schedules the bill for General File debate. The Speaker has signaled that he will keep the time thresholds for cloture – the motion to end a filibuster – that we had during the regular session. That means eight hours for General File, four hours for Select File, and two hours on Final Reading. Bills must “lay over” at least one session day between Select File and Final Reading, and can only be amended on General File or Select File.

Although the working group will provide a basic outline of a bill brought on behalf of the Governor, it is expected that there will be multiple bills introduced during the first three days of the special session. There will also be many opportunities to amend bills. Because there are so many variables that come into play when reforming our tax structure, there are a lot of possible solutions. The working group’s proposal will only be one plan, but hopefully it will provide a basic framework to start from.

The Governor has suggested many times that he wants to reduced property taxes by 40%. Here are the numbers that come into play: The State currently provides a credit on property tax statements that cost the State $233 million last year. The State is scheduled to pay just over $565 million to property taxpayers through a credit against 30% of their property tax paid to public schools and community colleges through LB1107. Another $110 million will be distributed to counties as reimbursement for homestead exemptions. In total, these credits cost the state just over $898 million in FY2024-25. If these credits were distributed through the Property Tax Credit Fund instead of through income tax credits, it would provide a 17% property tax relief.

At this point, the working group would like to use the LB1107, combined with increased “sin” taxes and elimination of certain exemptions, to generate just over $1.7 billion to fully fund the operating budgets of Nebraska’s public schools. This would eliminate almost all of the property taxes assessed by public schools except for existing bonds. Many details remain to be worked out, including how much to increase the “sin” taxes and which exemptions to eliminate. However, if the plan is successful, property taxes could be reduced by more than 40%.

The working group proposal will also include caps on local growth to ensure property taxes don’t continue to balloon. Today, property taxes are increasing at a rate of about $1 million per day. That kind of expansion is unsustainable.

Stay tuned. It is about to get interesting.

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.