State Senators Hope Public Understands Property Tax Relief, Education Aid Bill

BEATRICE – A group of Nebraska state lawmakers hopes Nebraskans will see the value of a property tax relief and school funding plan, to be taken up in July.
The Nebraska Legislature, when it reconvenes July 20th, will consider LB 1106, which proposes reductions in the percentage valuation across agriculture, residential and commercial property.

Revenue Committee Chairperson Lou Ann Linehan, of Elkhorn feels the plan provides a more simplified way of achieving tax relief.
"Part of the problem that we face is that we have a school funding formula now, that the joke is only three people in the state understand it. A lot of senators do understand it. But, it's complicated for people, but they understand valuations....and they understand that if their valuations go up, most of the time their property taxes go up. So, if valuations come down, property taxes can come down. But, we also want to do it in a way that we don't hurt public education".

The plan focuses on replacing property tax with state aid to school districts, over a three-year-period. Albion Senator Tom Briese, whose effort to eliminate sales tax exemptions failed to gain enough support, says if Nebraskans know what’s in the plan…it will achieve the needed support.

"It lowers property valuations for every property owner in the state. It increases the amount of state dollars going to every school district in the state, and it provides a mechanism to limit property tax increases for our property taxpayers in the state. I think if Nebraskans understand that, support for this proposal will be overwhelming. While we're doing this, we're not doing, in my estimation, anything unreasonable to school districts".

In a group interview at KWBE in Beatrice, Linehan acknowledges the plan faces opposition, especially from Nebraska’s largest school districts who receive a considerable amount of state aid.
"Forty five percent goes to three schools...so they like the way it is. And, they fear that if we expand funding, somehow funding will go away from them. That's not what this does. They still get all of their money...the even get more money because we're dedicated to giving more state money to our schools. If you read anything the schools have put out over the last ten years, the reason our property taxes are so high, is because the state doesn't do its part. We're trying to do our part here...and bring down property taxes".

State Senator Myron Dorn says discussions continue over combining the property tax relief and state aid measure with a bill to create a new economic development incentive program.

"There is a group of state senators meeting and meeting with other senators to make sure everyone is informed. There's been a lot of discussions between when we ended our session and before we come back on the 20th, of July. There's been a lot of discussions about how maybe we can put these two bills and the hospital project in Omaha together, into a package. That's still a work in progress".

LB 1106 proposes reductions in the percentage of valuation on agriculture land to fund schools, setting it at 65%, then 60%...then to 55% in the third year. State Senator Tom Brandt of Plymouth says that would help agriculture, which foots a big part of the bill for education.

"Just to make a living, we're paying many multiples more in these taxes, and about two-thirds of property taxes in the state of Nebraska goes to your local school districts. That, coupled with Covid, tariffs, low prices, fighting the weather and the things we usually do...there's a tremendous amount of stress in agriculture. Our income is about one-third of what it was five years ago, but my taxes have gone down, virtually nil. This will help".

School districts in Nebraska are wary of what might happen to state support for education, after the three-year phase-in period of LB 1106 ends.