Nebraska bill would directly fund municipalities and lower property taxes

LINCOLN, Neb. -- A bill proposed in the Nebraska Legislature aims to directly fund municipalities like schools, cities, villages, and counties.

Sen. Robert Dover introduced LB 1415, also known as the Property Tax Relief Act, at the request of Gov. Jim Pillen.

According to the bill, state municipalities would all receive direct funding from the state government in exchange for direct property tax relief.

In other words, municipalities would have to lower their property tax requests.

Each municipality would begin to receive funding in the 2024-25 fiscal year with a separate fund for each separate entity. 

The school district fund would begin with $989,600,000 to be divided between all schools.

The next fiscal year's budget would be based on the previous year's amount plus 3%.

Funding for the counties is set at $437,200,000 and increases by $15 million each fiscal year.

Municipalities (cities and villages) have a fund of $297,100,000 and increase by $10 million each fiscal year.

The amount given to schools and counties would be determined for each individual entity based on the amount available for disbursement in each fund, multiplied by the ratio of the real property valuation of the municipality to the real property valuation in the state.

Except for cities and villages whose ratio is based on the real property valuation to the real property valuation of all municipalities.

LB 1415 will be up for consideration by the revenue committee on Friday, Feb. 2.