Nebraska Gov. Jim Pillen vowed to pass sweeping property tax reform in 2027 after Nebraska legislators failed to deliver relief this year, despite a last-minute attempt by some lawmakers and a suite of proposed ballot measures advocating more far-reaching steps.
Pillen used his end of legislative session address to promise 2027 will be the year for property tax reform in Nebraska, according to the
Nebraska counties and municipalities "are already under
Those caps were later amended: "During the 2025 session, we negotiated with the revenue committee and the bill that passed then basically made the bill that passed in 2024 workable," she said.
The law took effect in fiscal year 2025-26, making this the first year those changes were implemented. "I think municipalities have been extremely responsible in terms of the cap itself," Rex said. "Based on our survey work, there are only a handful of municipalities that have gone above that."
The law includes exceptions to the cap for public safety and other emergencies; one municipality used the exception for bonded indebtedness for a public safety building, Rex said.
During the session that ended Friday, State Sen. Ben Hansen proposed last-minute property tax reforms as an amendment to another bill, Rex said.
Revenue Committee Chair Sen. Brad von Gillern said "it was like running down the hallway with scissors," according to Rex. Hansen
"Nebraska gives less money to municipalities and counties than almost any other state," Rex said. "Schools have received significant dollars as an offset; municipalities and counties have not."
Counties get 20% of actual tax revenue, but they're responsible for assessing, levying and collecting 100% of the taxes and distributing the revenue to other political subdivisions, said Jon Cannon, executive director of the Nebraska Association of County Officials. "All the complaints about the property tax process, we get every single one of them," he said.
Asked about the governor's vow to reform property taxes in 2027, Cannon said much depends on what that reform looks like.
A hard cap, one size fits all that "makes no exceptions for emergencies or for law enforcement or for those sorts of services that people are demanding ... that's the kind of reform that we tend to shy away from because it just says, we're going to collect less tax," he said.
"And even though our governor's fond of saying, 'You guys can do more with less,' what we've found is that we do less with less," he said.
The 501(c)4 Advocates for All Nebraskans has put forth
Eric Underwood, a former Nebraska Republican Party chair who co-founded AFAN with Tom Nesbitt, a former state patrol colonel, and Kirk Penner, a member of the Nebraska Board of Education, said they drew inspiration from across the aisle.
"The Democratic Party has been really good at petitions to move their issues across the line," he said. "Maybe this is the way that Nebraskans will get property tax relief."
AFAN is going door-to-door from a list of 242,000 "prioritized voters," Underwood said. They're seeing about a 60% door open rate, and 85% to 90% of those people "are signing all the petitions at once, because they're done," he said.
"The easiest thing to accomplish was having conversations with Nebraskans about property taxes," Underwood said. "The learning curve has been more on the organization of grassroots across the state."
In Nebraska, he said, lawmakers have sometimes said that to solve the property tax issue, "it's the people who need to be going to the property taxing authorities and solve their problems.
"In Nebraska, there's 1,700 taxing authorities," he said. "There is no way that the citizens can organize enough, let alone have enough time … and get across at a meeting, where they have three minutes to speak," the full scope of the issue.
"The other option is that they go to the state lawmakers and ask them to (fix) it," Underwood said. "The lawmakers say, 'Well, that's your job.'
"The petition process is a one-stop-shop," he said. "This is where you can solve the problems."
"They're not workable," Rex said of the statewide petitions. "It would simply gut public services. … Citizens really do want to be able to call 911 and have a police officer or a firefighter to come. They want roads that are going to sustain heavy trucks, and for bridges to hold up, as well."
Underwood voiced skepticism about the role of lobbyists in Nebraska's lawmaking process and said the property tax limits proposed in AFAN's petitions would create a virtuous cycle, leading to more spending by Nebraskans.
"In the end, the people are the ones who are voting every November," he said. "So they have the greater say."
"I've been doing tax policy for 20-some-odd years," said NACO's Cannon. "And frankly, there are two questions that you have to ask. And the first one is, what are you paying for? For counties, it's roads, bridges, law enforcement, jails, courts and elections, and then all the infrastructure that supports it. And then the second question is, Who do you want to pay?"
Also key is: How do you want them to pay?, he said. "Because that leads you to, well, what sort of tax base do we have where we can access wealth in a way that raises the necessary revenues for government? And that ends up being the property tax in almost every case."
While 2027 will be the final stage of a four-year phase-in of income tax cuts to 3.99%, which the governor backed, some areas of Nebraska might be able to get by on income taxes, Cannon said.
Douglas County, home to Omaha, or Lancaster County, with Lincoln, would probably be fine with an income tax-based system, he said. It's the smaller rural counties that desperately need property tax revenue.
"Before you make certain decisions, one has to understand the consequences on the back end," Rex said. "And it has to be carefully put together. Because there's a lot at stake."
