I have knocked thousands of doors in the past year and spoken with Nebraskans on their doorsteps. One issue has been consistently brought to my attention more than any other, and that is the one that I’ve been working to solve for the past four years: property taxes are too high.
Despite the massive property tax relief we’ve legislated in recent years, increases in valuations and spending beyond the rate of growth of consumer inflation have eroded most of that progress.
In short, Nebraskans no longer feel any satisfactory or substantive relief from their property tax burden.
I’ve written about this numerous times, and if you’d like a refresher, visit my website and read the blog titled “Property Tax is a Ninth-Grade Algebra Equation.” In that article, I reminded us that our property taxes are calculated by multiplying the assessed valuation (A), by the levy rate (B), to arrive at the dollar amount that is to be paid (C).
(A) Valuation x (B) Levy = (C) Your Tax Bill
I believe that “C” should be the controlling factor in the equation. “C” represents the cost of doing business for your school districts, your county, your city, your NRD, and numerous other taxing entities (all of which are managed by locally elected boards and are not state-controlled, by the way). If “C” is controlled or limited, possibly through a hard spending lid or cap, then the valuations and levies will be adjusted downward accordingly.
Believing that true and meaningful property tax reform will only come through slowing the growth of spending at the local levels, I believe legislation must be brought that will control those annual increases. My goal has been to:
• Develop a plan that “moves the needle,” creates reforms, and enhances existing law with regard to spending limitations.
• Implement that plan in cooperation with impacted parties in order to meet the needs and desires of taxpayers, while still enabling the services that are required and desired by those same taxpayers.
To that last bullet point: I met over the summer with individuals and entities who may be impacted by changes in property tax calculations and authority. They include: Millard, Elkhorn, and Omaha Public Schools; the Nebraska State Education Association; the Douglas County Sheriff’s Office; the Omaha Police Officers Association; the Nebraska Association of County Officials; the League of Municipalities; the City of Omaha; ESUs, NRDs, and numerous others.
We’ve not left every meeting in complete alignment, but each entity has a seat at the table in this conversation and will be a part of reaching a productive conclusion that does not decimate their ability to provide quality services to taxpayers.
Through those discussions, I arrived at a bill draft that I believe is meaningful but considerate. Features of that proposed legislation include the following six points.
- Growth of spending by taxing entities is capped at a 2.5% increase of the previous year’s tax ask, plus real growth. This applies to cities, counties, school districts, ESUs, and NRDs. Additionally, political subdivisions will receive an allowance for real growth of the community, and exemption of collectively bargained wages and benefits for teachers, police and firefighters (indexed to Employment Cost Index), and public safety expenditures (indexed to State and Local Consumption Expenditures). This will close an existing, uncapped loophole while ensuring we’re able to keep investing in education and our first responders.
Controlling spending is the only way to cut property tax increases!
- For taxpayers 70 years and older in owner-occupied residences valued at less than $500,000, and within certain income limitations, property tax increases of 2% will be the maximum allowed annually through a modified Homestead Exemption.
This will protect seniors from dramatic and sudden increases in value that may tax them out of their home.
- Review of the statute we passed in 2025 which ensures taxpayers 70 years and older in owner-occupied residences who currently qualify for a Homestead Exemption shall not lose that Homestead Exemption due to a valuation increase.
Vulnerable seniors qualifying for the Homestead Exemption should not fear losing that exemption for reasons beyond their control.
- For protests of valuation increases for single-family residential properties in excess of 10% when there has been no physical change or improvement to the property, the burden of proof of valuation shifts from the property owner to the assessor.
This makes the appeals process fairer to homeowners and increases the accuracy of valuations.
- Build-to-suit construction, sale-leaseback transactions, and leased fee sales will be excluded from comparable sales for assessed value calculations due to their distorting nature in values.
This will apply mostly to multi-family and commercial properties and again, should increase the accuracy of valuations by removing the outliers.
- Conversations continue regarding placing a limitation on cash reserves for carryover into future years. Reasonable cash reserves should be allowed to carry over year over year. Substantial cash reserves intended for specifically noted projects or purchases should be allowed if properly identified.
This will prevent accumulation of large amounts of cash that could be used at the board’s discretion, or worse, raising the tax-ask simply because there is room in the levy to do so.
Anyone can state that they’ll “fix property taxes.”
Anyone can bring (and has brought) a hard-cap spending bill that cuts taxes but destroys education, public safety, roads, etc.
Anyone can draft legislation in a vacuum, ignoring negative outcomes.
What is not easy is digging into the details and determining how to thread the needle for tax reform that still provides quality services. That is what I believe I have accomplished here.
My business career was spent leading a large construction business (measure twice, cut once!) with over one hundred employees and multi-million-dollar project budgets. My community service has included years leading non-profit organizations on their Boards of Directors, which requires deep and thoughtful analysis of both mission and budgets. And my service to the Great State of Nebraska has taken four years of work on the Revenue Committee combined with the lessons learned in the private sector, to produce a bill that would truly reform property taxes for the first time in a generation or more. My only regret is that it has taken so long to get to this point.
Many conversations lie ahead with the impacted parties, with my senator colleagues, and with you, the people that write the checks to local government. I look forward to continuing to fine tune this plan so that a positive impact is made for all Nebraskans.