Nebraska Gov. Jim Pillen greets attendees at one of his property tax town halls Friday, May 24, 2024, in Beatrice. (Zach Wendling/Nebraska Examiner)

LINCOLN — Nebraska Gov. Jim Pillen offered one of the clearest timelines yet Monday for when he might call a special session on property tax relief this summer.

“To any state senator reading this — clear your schedule from July 26 to August 15,” Pillen wrote in his latest column. “We have the people’s work to do.”

In his “save-the-date” announcement, Pillen made clear he will follow through with a stated goal to reduce property tax obligations for Nebraskans in 2024, after a previous plan failed to pass in this spring’s regular legislative session. At a dozen town halls across Nebraska, he has offered ideas that he says could help shave off another $1 billion for property tax relief, adding on to 2023 efforts.

The governor’s goal is that by the end of his second year in office, he will have shifted or eliminated 40%, or about $2 billion, from the state’s annual pool for local property taxes.

Official call still pending

Speaker John Arch of La Vista, who sets the Legislature’s daily agenda, said in a statement that the “save-the-date” announcement came as no surprise because property taxes are important to Nebraskans, and they need to be addressed. 

Special session costs

A special session would cost thousands, nearly $16,000 per day for a five-day session and more for lengthier sessions, according to initial estimates. Pillen has said that is “pennies compared to our property tax increases.”

Arch said he has discussed possible dates with the governor should he choose to call a special session. Pillen committed to doing so in April, telling senators they should “enjoy halftime.”

“Regardless, his recent remarks are not an official call for a special session, and I fully expect he will let members of the Legislature know of his intentions prior to making an official proclamation,” Arch said.

That proclamation would also need to stipulate the scope of legislation that can be considered.

Senators have already vowed to stretch the limits of what legislation they can introduce, such as to expand gambling or revive a proposal vetoed in April to allow lawsuits against political subdivisions in certain cases of child abuse and child sexual assault.

“So we’re legalizing marijuana, decreasing our prison population, scrapping the plan to build a $350m prison and equitably taxing people?” State Sen. Terrell McKinney of Omaha said on X, formerly Twitter.

Multiple senators reached Monday afternoon said they hadn’t received notice of the special session time frame prior to the governor’s column being released.

‘Outrage’ in property valuation increases

In his short column, Pillen focused on property valuation increases in the wake of valuation notices that have gone out recently, stating that a “common reaction … can be summed up in one word — outrage.”

“Countless Nebraskans are in disbelief when they see the recent increases in their home values,” Pillen said.

“Double digit increases in valuations year over year is not something we should accept,” he continued. “However, special interest groups have intimidated and paralyzed our Legislature.”

A preliminary report on real property tax valuation estimates for 2024 shows double-digit valuation increases in 50 of the state’s 93 counties. Boone County increased the most, at 27.93%. The three counties with the most people — Douglas, Lancaster and Sarpy — increased by 7.85%, 5.49% and 10.72% in valuations, respectively. The report does not include personal or state assessed property values.

Valuations statewide are preliminarily reported to increase 9.57%. Across the 93 counties, valuations have increased 10.55%. Cheyenne County is the only county where valuations decreased.

Rising valuations doesn’t mean the amount of property taxes collected will increase the same.

For example, in 2023, valuations increased 11.44%, up $32.7 billion at year’s end. Property taxes collected increased 5.7%, to $5.3 billion at year’s end. Taxing subdivisions, of which there are hundreds in Nebraska, then decide how much they’ll collect in taxes when deciding levies.

State Sen. Lou Ann Linehan of Elkhorn, who chairs the Legislature’s Revenue Committee, did not immediately respond to a request for comment Monday.

What’s on the table?

Pillen said it is “time we have transformational change” in the state’s tax code, which he said will be solved “with a broad tax base and low tax rate.” At his town halls, he has proposed:

The governor has hinted at tackling valuations in a special session but has not yet offered a definitive answer of how he might address them. At his town hall in  Fremont, after a woman told him  her valuation went up 113%, he said to expect legislation to be considered that would make it so taxpayers don’t need to be concerned what their valuation or tax rate is.

Pillen said property tax obligations would be reduced by 40% and kept flat. He did not specify how that goal would be accomplished.

Senators awaiting formal plan

State Sen. Machaela Cavanaugh of Omaha, who has regularly clashed with the governor, criticized Monday’s announcement on X, stating there is no agreement and no new plan.

“The only thing that’s happened since adjournment is the Gov has traveled NE holding town halls where he insulted [Nebraskans] and [the Nebraska Legislature] for not supporting a massive tax shift that DIRECTLY benefits him personally,” Cavanaugh said.

State Sen. Jana Hughes of Seward said she is a little nervous about the timing suggested for a special session without hearing a formal plan. However, she said, she is “all in on figuring out something to fund our schools and get it off the property tax.”

“We are working on some bills whether they be dropped in special session or potentially next year in regards to this,” Hughes said.

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