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LINCOLN — Gov. Jim Pillen’s route to property tax reform could come through the State of Nebraska taking over all funding for K-12 schools instead of using local property taxes to pay a portion of the cost.
Pillen, in his monthly radio call-in show Monday afternoon, said the “living, breathing document” that will be his property tax reform plan will include asking lawmakers to take on every penny of K-12 funding. Locally, about 60% of collected property taxes go to K-12 schools.
“Our goal of our plan is to not have property tax fund one iota of K-12 education. Zero,” Pillen said. “The [Nebraska] Constitution’s crystal clear: Our job is to educate our children. The State of Nebraska is supposed to — not property tax payers.”
Doing so would mirror legislation in 2023, when the state took on community college funding.
In 2023, Nebraskans paid about $5.3 billion in property taxes, $3.7 billion in income taxes and $2.3 billion in sales taxes. Of those taxes, Pillen said “it’s supposed to be the opposite.”
Pillen said most school board members do not have a financial background, and coupled with a confusing state aid formula for schools, Nebraska “quit on our kids.” Before changes to state law were made in 2023, the state did not give aid to about 180 of the state’s 244 school districts.
“This does nothing but strengthen [public schools],” Pillen said of his proposal. “It’s never been the intent that property taxes educate our kids.”
A caller asked Pillen to comment on valuations and tax levies, to which the governor said valuations shouldn’t be the issue because people want valuations to go up. Instead, he said, the “hard core reality” is that all taxing subdivisions — of which there are more than 2,000 in the state — always fail to lower levies, which he said goes against the current spirit of the law.
“We have hard caps [on increased spending]. Then whatever the valuations are has no impact,” Pillen said.
Pillen hopes to fund his ideas through a broad-based sales tax system, which could include ending some sales tax exemptions and increasing “sin taxes” on alcohol, vaping or cigarettes.
With “lots of work” to do with state senators, and a 12-day trade mission to Indonesia in early July, Pillen said he’s “just not prepared” to formally release his plan. However, he remained firm that lawmakers will return to Lincoln as he indicated in a “save-the-date” announcement last week.
“We don’t have them [the dates] locked down in gold yet, but somewhere between July 26 and August 15 is when we’ll ask for the special session,” Pillen said.
Pillen said he had signed a letter for the Legislature regarding a possible special session before joining the radio show, but the offices for the Clerk of the Legislature and Speaker John Arch said they had received no letter as of Monday afternoon.
Laura Strimple, a spokesperson for Pillen, said the letter will be available after it is presented to the Legislature.
