It was a full house as residents from Dawson and surrounding counties gathered at Central Community College in Lexington on Friday, June 28, to hear Nebraska Governor Jim Pillen speak about the one topic that affects us all – property taxes. More specifically, what he plans to do about a system that all Nebraskans agree has gotten out of control.

The governor began by sharing with the audience how stunned he has been since taking office to see how much influence lobbying groups have on policies in our state. “It takes 33 votes to do anything, and only takes 17 to stop it. The lobbying groups have an incredible ability to figure out who might be a little weak-kneed and who they might be able to crack,” the governor shared. “Lobbying groups never stop, they never give up.”

That comes into play not only as the state legislators decide on bills and policies, but also on how the state’s revenue is spent. “Joe (Lieutenant Gov. Joe Kelly) and I are fiscally conservative. We believe in running government like a business; decrease spending and improve services,” said Pillen.

“We start our new fiscal year on July 1, our projection is that we will decrease what we spent this year in state government by $200 million, and the year after that we will decrease it $400 million,” Pillen stated. “I know there are people who are saying that I don’t care about Nebraskans and I don’t care about the kids, that all I want to do is cut spending. You couldn’t be farther from the truth.”

When it comes to property taxes in Nebraska a huge amount of the revenue collected each year goes to support our public schools. “I have superintendents all across the state tell me that we have mandates in state government that are doing nothing but increasing the cost of educating our kids and have nothing to do with the outcome,” said Pillen.

One area that Pillen is trying to rectify is getting more federal dollars into the state to help offset expenses. He discovered shortly after taking office that Nebraska ranked 49th out of 50 states in receiving federal dollars, a stat he is determined to change.

“In 2023, we together paid $5.3 billion in property taxes. We were able to make progess on income tax,” the governor said. “I didn’t realize it but we were actually taxing our senior citizens income tax on their social security. That ended in 2024. By 2027 our income tax will be down to about 3.99. In 2023, we had $3.7 billion in revenue from income tax. By 2027, the revenue forecasters are saying that will decrease to $3.2 billion.

“All (leaders) say if you want to chase people away from your state and stagger your economy, have the highest property tax. We are seventh highest in the nation in property tax,” Pillen continued. “I am not going to stop until we get this solved. Just think of how many people are not coming to this state because of how messed up our property tax system is.”

Pillen said every property owner, no matter what community in Nebraska they reside, is impacted by out-of-control property taxes, and that is why he is very confident that his reform plan will get through the legislature when they convene in special session beginning today, July 25.

'In the 2024 Preliminary Property Tax Valuation estimates, 57 out of 93 counties had double digit valuation increases. Unfortunately, when valuations increase, you inevitably pay more in property taxes. Period. That’s because we have a spending problem here in Nebraska,” said Pillen. “We can solve this problem with a broad tax base and low tax rate. This will reduce the burden on homeowners, ranchers, and farmers and put more of a tax burden on the special interests that have received a free ride for the past 60 years.”

Two sessions ago the governor and legislature changed the funding structure for our state’s community colleges. Pillen’s plan is to apply that same concept to our public schools. “We were able to change the funding from property tax to having the state fund community colleges. Our plan is to follow that,” said Pillen. “We have what I call a game-changing, bold, transformative plan that will make an incredible difference for generations to come.

Pillen talked about the highly confusing, and unfair, TEOSA formula that is used to determine state aid for school districts. “The hard-core reality is 180 of our 244 school districts did not receive a penny in state funding. The state quit on our kids,” he shared. “And I don’t think we should have the state quit on our kids anymore.”