With the legislative session over, it’s time to turn our attention to the election and the agenda for next year. Since my election in 2022, I have served on the Banking, Commerce, and Insurance Committee and, for the last two years, as its chairman. One of the high points for me during this time was the passage of LB1087, a bill I sponsored that allowed Nebraska hospitals to access nearly $1 billion for Medicaid reimbursements. The timing of this funding was a lifeline to many rural hospitals that were contemplating closure. I appreciate the Governor’s support, who agreed to participate in the program because it had no strings attached. I also appreciate the support of my colleagues in the Legislature who voted for the bill, and Congressman Mike Flood, who helped us with the federal red tape to get the program approved by CMS just prior to the passage of LB1 at the federal level. The program would have been in jeopardy if the timing were different. I can tell you firsthand that rural health care is critically important. Attracting and retaining workers and retirees to our area depends on access to quality health care.

One of the most important issues facing all Nebraskans continues to be the unsustainable rise in property taxes. To address this issue, we need to understand who sets your property taxes and, from there, focus on solutions. Keep in mind that the state has no authority to charge property taxes. State tax revenues primarily come from sales taxes and income taxes. Counties are allowed to charge property taxes and receive inheritance taxes. Cities charge property taxes and can charge a sales tax up to 2% with voter approval. Public schools charge property taxes and lead all other taxing authorities to account for over 50% of your property tax bill. A variety of other political subdivisions also have the authority to assess property taxes and do so at a lower rate. For this reason, it is important to pay attention to what candidates for school board, city council, county commissioner, and other local entities say about their focus on protecting the property taxpayer.

As elected officials, we are asked to balance providing for our constituents’ needs with the obligation to limit taxes. I have often been asked what I am doing to lower property taxes. First, I remind those who ask that the Legislature has no direct impact on your property taxes, but can take steps to reduce them or at least reduce the rate of the increase. During my time in the Legislature, we have taken operating expenses for community colleges off the property tax rolls by absorbing that expense by the state. Today, that accounts for nearly $300 million in reduced property tax expenses.

The Legislature has also increased the amount of the Tier II property tax credit that appears on your property tax statement each year. In total, the state has now offset nearly $1.7 billion in property taxes from these credits. And of course, the state provides funding for public schools through the TEEOSA formula. This includes providing all public schools with $1,500 dollars per student (“foundation aid”), in addition to any other subsidies that might be available to a district under the formula. Despite a significant funding commitment by the state to property tax relief, locally assessed property taxes continue to rise and place significant burdens on many taxpayers.

Given the state’s own budget battles, there is limited capacity to provide additional property tax relief in the current fiscal environment. As a result, the only tool available to the state is to cap the taxes that local political subdivisions can levy. The challenge will always be finding the right limits. It is challenging to legislate for every situation, and there is a significant difference between the needs of urban and rural communities. For example, the Omaha Public School District has 53,000 students while the McPherson Public School District has 53 students. The cost per pupil is over $45,000 per student for McPherson, while the OPS cost per student is around $11,000. But the mill levy in the McPherson County School District is significantly lower than in surrounding school districts because of the limited services required and the district’s land value. With so many levers that can be pulled, it is very hard to set up a fair statewide system that accounts for all variables when funding local services.

The answer to the property tax challenge really lies with making well-thought-out strategic cost reductions. Controlling overhead and limiting administrative costs are the first places to look for public schools. Teacher salaries and teaching staff are likely the last place to look. For local governments, it is important to determine which services are truly essential and to find the most cost-effective way to provide them. Conservative budgeting and spending are imperative to keep property taxes low. It will be imperative for money-conscious taxpayers to know who they are electing for every race in the upcoming election cycle.

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.