LINCOLN, NE – Governor Jim Pillen is providing state senators with the newly published 2024 School Property Tax Collection Report, aimed at providing historical context for funding of the state’s school districts, the impact of recent legislation in reigning in property tax increases and a request to state senators to consider legislation that will finally address inconsistencies in state aid to schools. The report, compiled by the Governor’s Policy and Research Office (GPRO), compares data across each of the state’s 244 school districts, accounting for the impact of state aid and property tax increases to taxpayers in those districts.

“We have newly elected state senators who may not have a complete understanding of how the state’s funding formula has worked historically, nor the impact of recent legislative initiatives when it comes to setting caps and also providing state funding to those districts,” said Gov. Pillen. “This document helps illustrate the impact of those changes and hopefully, inform discussions as we embark on the next legislative session and resume efforts to provide additional property tax relief to Nebraskans.”  

There are three key findings from the report:

1. Caps are working to slow the growth of school property taxes. It is estimated that in 2024 growth will be 2.7%, the smallest percentage increase since 2018.

2. Cuts in state aid are negatively impacting property tax relief delivery, especially for certain districts.

3. State revenues can eliminate property tax increases enacted by school districts, through the creation of a stable school aid formula.

“The majority of a taxpayer’s property tax bill is tied to their local school district – an average of 60 percent,” said GPRO Director Kenny Zoeller. “One hundred and eleven school districts have had a reduction in state aid in the current year. Some have increased property taxes to help meet that decrease and others have far exceeded it. We need to find a way to better help districts budget for the aid they do get, thereby creating some predictability and hopefully, further reduce what Nebraskans end up paying in property taxes year over year.”

The analysis calls for Nebraska lawmakers to provide greater funding certainty through the Tax Equity and Equalization opportunities Support Act (TEEOSA). That formula has undergone multiple adjustments since its creation in 1990, which has also made it more confusing and has created disparities among districts in how they manage predicting budget shortfalls that are subsequently made up through property tax increases.

“The formula is inconsistent and hits taxpayers hard. It is not fair to them or the schools. Providing certainty to school districts will allow Nebraska to have sustained property tax reductions for the first time in history,” concludes the report.

A copy of the 2024 School Property Tax Collection Report can be found on the Governor’s website: https://governor.nebraska.gov/2024-school-property-tax-collection-report.