The Legislature is officially between the first and second half of the 109th Legislature. We will meet for the second session of the 109th Legislature on the first Wednesday after the first Monday in January 2026. This will be the short 60-day session. As many of you know, I announced last week that I intend to run for a second four-year term. Sitting elected officials must file to be on the ballot in February of the election year, with the non-office holder filing deadline in March. 

I continue to get questions as to what the Legislature is doing to lower property taxes. My first answer is to talk to the local political subdivisions that actually assess and collect property taxes. They are in the best position to lower property taxes by cutting spending. Absent voluntary spending reductions, the best thing the state can do to help is add limits to additional property tax collections from year to year by limiting how much property taxes can increase at the local level. We made great progress in this area during the Special Session last summer. 

LB34 (2024) accomplished two goals. First, it limited how much revenue can increase from year to year beginning July 1, 2025. The limit was the greater of inflation or zero percent plus the percentage of real growth and growth in pubic safety needs. By imposing these limits, the practice of leaving the tax levy flat and letting huge valuation increases carry property taxes will no longer happen. Second, LB34 added a new property tax credit using state funds, which will go up at least 3% per year. 

So, keep in mind that just because your property valuations are going up by double digits, that does not mean your property taxes will be growing at that same rate. By limiting tax revenue growth, we can get a handle on the tax rate. 

Always remember that your individual property tax is derived by multiplying the property value times the levy. Historically, the Legislature has either attempted to limit the rate of growth in tax value or limit the levy. In reality, it is the actual tax collection that we want to limit. I believe we want our property values to rise, but we do not want the property tax to rise above inflation. I believe that artificially setting or capping property values is a bad path to go down. It is the spending that needs to remain in check, which we can cap by limiting available revenues. As a result, higher property values must result in lower levies, vastly lower. 

Cities also collect local option sales taxes, which can generate revenue to lower the city’s reliance on property taxes. When they can grow their sales tax collections, they can lower their property tax request. Conversely, counties collect inheritance taxes, in addition to fees on motor vehicle registration, marriage licenses, and other miscellaneous services. However, the local school districts continue to lead property tax collections because they receive federal and state aid, but have no other local funding sources. The state continues to raise districts’ aid each year, but the state’s revenue sources are limited as well. Many in the Legislature want to see caps on schools before we allocate or generate any additional funding. 

Very few schools have stable demographics. School population changes, number of special education students, teaching salaries, and administrative salary costs are generally based on years of service and education levels. I am glad that LB303 was passed by the legislature this year. It created a commission to consider solutions for lowering school spending and increasing efficiencies. It will be made up of all areas of school leadership, plus a few state Senators. In the end, the Legislature will make the final decision, but input from the schools themselves will help determine what solutions are palatable. 

It is a privilege to serve as your state Senator, and I look forward to hearing from you on issues that are top of mind for you. I may not have all the answers, but my staff and I will work hard to find solutions. I can be reached at 402-471-2729 or by emailing me at mjacobson@leg.ne.gov.