I want to start this week’s article by letting you all know I’m recovering well and am looking forward to regaining more strength and stamina with the physical therapy staff at Madonna in Lincoln for the next few weeks. While there, I will keep in close touch with my legislative and Bank staff, as well as participating in calls and virtual meetings as my schedule allows.

Julie and I are tremendously grateful for all of the prayers and well-wishes; they have certainly been felt. We also appreciated Governor Pillen and First Lady Suzanne stopping by Great Plains Health for an in-person visit prior to taking in some of the NebraskaLand Days festivities. They are truly good, kind people.

Many of you will have started receiving your property tax valuations in the mail. Statewide, people can generally expect their valuations to have increased, often past the level of inflation. Valuations are based on the current market value as of January 1 of the calendar year. The valuations set the property tax base. Political subdivisions are also starting their budgeting process this time of year, and will work to finalize the budget in early- to mid-fall.

July 1, 2025, is the implementation date for LB34 (passed during last year’s special session), which set property tax revenue caps for cities and counties, so this will be the first year the caps are in place. This will limit what their property tax “ask” can be year over year, but doesn’t impact their ability to collect revenue from other sources, such as local option sales tax. Rest assured, local budgets will not be increasing at the same rate as your property valuations. Cities and counties are capped at the greater of 0% or inflation plus actual growth, plus certain allowances for public safety. I hope other non-capped political subdivisions will be conservative in their budgeting. With caps and careful budgeting, we can expect higher valuations to result in reductions in the mill levy; therefore, only a small growth in spending. This will mitigate the rate of property tax increases.

Long-term, the answer to the property tax crisis is less spending. There are a number of controllable expenses at the local level that lawmakers expect to be held down, and there are unfunded mandates that the state needs to work to address. The State continues to increase its contributions to property tax credits and public schools, including $1,500/student in foundation aid for unequalized school districts (those that wouldn’t otherwise receive state funding through TEEOSA). It has also recently begun funding community colleges with state dollars, rather than local property tax dollars.

If the State is going to undertake even more property tax relief, local political divisions must demonstrate an appetite to reduce spending. Many lawmakers are skeptical of creating new sources of revenue, such as new or increased sales taxes, without proof that local officials will reduce expenses. And that will have to include public schools, which make up the vast majority of your property tax asking. Some have likened the current system to putting water (property tax relief) in a bucket with a hole in the bottom (increased spending). I certainly understand their frustration.

Property tax relief continues to be a top priority for me and Governor Pillen’s administration. I look forward to seeing what the commission created by LB303 puts together over the interim. I will also be meeting separately with a group of fellow rural lawmakers over the summer to work on a property tax relief plan that focuses on rural Nebraska. No plan will solve the problem overnight, but I’m hopeful that local leaders will join with state lawmakers to put together a proposal that will make meaningful progress on reducing spending while maintaining quality services and education.

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.