Gov. Pillen Releases Property Tax Reduction Plan Ahead of Special Session

LINCOLN, NE – Governor Jim Pillen joined state senators Lou Ann Linehan (District 39) and Robert Clements (District 2), presenting a sweeping plan for property tax reform. The entire proposal would slash property taxes paid by Nebraskans by an average of 50 percent, representing the largest property tax cut in Nebraska history.  A copy of the plan is available on the Governor’s website. 

“This is unacceptable and it’s accelerating,” said Gov. Pillen. “In a few short years Nebraskans will be paying $1 million a day in property taxes. That’s $6 billion a year. Property taxes are hurting young people, our seniors, homeowners, renters, farmers, business owners. We need state senators to enter the upcoming special session with the determination to fix this issue immediately.”

During the news conference, Sen. Linehan outlined key objectives of the comprehensive tax proposal which include:

Slashing property taxes by an average of 50%
Having the state assume greater funding of K-12 public schools
Ensuring that investments in public safety are protected and exempt from hard caps on local government tax collections
Placing limits on local tax collections
Identifying massive savings at the state level and running state government like a business

“Local spending is a significant issue when it comes to ever-rising property taxes, and one that we need to finally address,” said Sen. Linehan. “If local governments want to collect more in property taxes, then that decision should be left to taxpayers. That is flexible and that is fair. It creates a pathway for community growth, but with reasonable controls.”

Local government spending has caused property taxes to balloon by $1 billion in the last five years.

“While we call for spending restraint at the local level, we need to do the same in state government. When we talk about running government like a business, this is integral to the goal,” said Gov. Pillen. “Money saved can be directed to providing property tax reform, which is necessary to making us more competitive and ultimately, to growing Nebraska.”

In addition to expanding state funding of public schools, which would be phased in over three years, and limiting local property tax collections, cutting state expenditures is a significant and necessary feature of reducing property taxes. The plan cuts state spending by $350 million, leverages $235 million in idle cash funds, and uses federal funds to supplant general funds.

The elimination of 114 tax exemptions would generate an estimated $950 million in property tax relief. Food and medications would remain untouched, but things like cigarettes, candy, pop, games of skill and other items would be taxable, as they are in other states.

“Special interest groups have been very successful in carving out tax exemptions,” said Gov. Pillen. “Over time, they have eroded our tax base. This proposal better balances the state’s three-legged stool and broadens that base, putting the choice to spend in the hands of consumers.”  

Further, the plan calls for retooling credits to taxpayers, so they are loaded on the front end, instead of taxpayers having to claim them on the back end. In 2022, over half of all Nebraska property taxpayers did not claim these benefits.  

Gov. Pillen wrapped up the news conference with a call to action – requesting Nebraskans contact their state senators to support the plan.   On page 10 of the published document (https://governor.nebraska.gov/nebraska-property-tax-plan.) is a QR code and email link that users can access to calculate how they will directly benefit.