LINCOLN, NE – On July 30th, Governor Jim Pillen testified before the Legislature’s Revenue Committee on LB1, the property tax reduction bill introduced on his behalf by Sen. Lou Ann Linehan, chair of the committee. In three years, this bill aims to slash property taxes by an average of 50 percent for Nebraskans, based on the comprehensive proposal dubbed The Nebraska Plan.

“Since the last legislative session, I have toured the state and held 26 townhalls to hear directly from Nebraskans. The message is clear, Nebraskans are struggling to balance a check book and continue to afford these tax increases,” said Gov. Pillen. “LB 1 represents transformational tax reform for all Nebraskans.”

The plan outlines five components necessary for achieving significant and sustainable property tax relief:

• Controls on local spending through a hard cap of 0% or CPI, whichever is greater. Exceptions are in place to protect investments in public safety and criminal justice. It also allows flexibility to accommodate new growth and permit an override of the cap by the approval of 60% of voters.

• Implements a new tax credit fund that will be applied against school taxes paid. When fully enacted, it will eliminate general fund taxing authority for school districts from the current $1.05 down to $0.0 in 2026. This proposal also allows for local controls, including leaving education decisions to superintendents and school boards and provides allowances for collecting property taxes to support school infrastructure.

• Repurposes existing property tax programs to provide direct relief to homeowners and property owners by front loading credits instead of forcing taxpayers to claim them during the filing process.

• Broadens the sales tax base through the elimination of over 100 sales tax exemptions currently in place. Many of these changes will bring Nebraska better in line with what is assessed by other states. A series of ’principles’ previously outlined by Gov. Pillen would place limits on what is taxed and ensures there is no double taxing of any product or service.

• Cuts waste in state government and diverts those savings to the property tax plan. To date, $400 million in savings has been identified, and the state will continue to tap into federal funding where appropriate, to further ease the burden on state funding.

Gov. Pillen encouraged skeptics and opponents of the legislation to focus on the facts, rather than listening to paid lobbyists and special interest groups.

“They have called this plan a tax increase, which is simply not true,” said Gov. Pillen. “LB1 will reduce the total amount of tax collected by nearly $1 billion. It will get Nebraska in the game and make us competitive with other states. Otherwise, we face the prospect of chasing people out of the state and discouraging others from moving here in the first place. Our future depends on Nebraska’s continued growth.”