Revenue Committee
February 26, 2025
Committee Chair: Sen. Brad von Gillern | Bills Heard: 4 | Full Transcript (PDF)
LB81: Property Tax Credit Fund Gap Year Fix
Introduced by: Sen. Brian Hardin | Testimony: 10 proponents, 2 opponents, 0 neutral | Read bill text (PDF)
Legislature grapples with $600 million property tax relief 'gap year' created by its own 2024 special session bill. LB81 seeks to restore credits for taxpayers who paid 2023 property taxes in 2024 and lost eligibility under LB34's shift to direct property tax credits. The bill pits fairness against fiscal reality.
Why it matters: Roughly 85% of Nebraska property owners who paid taxes in arrears lost a year of relief they expected, facing unexpected tax increases of up to 18%. But the state faces a $432 million budget shortfall, and LB81 carries a $600+ million fiscal note.
What they're saying: - Proponents: "We made a mistake and must fix it." Testifiers documented real losses—one farmer lost $11,000, a CPA group called it a $550 million statewide burden. Sen. Erdman argued the state will collect $550 million in unclaimed credits anyway, making the true cost lower. - Opponents: "We can't afford it." OpenSky Policy Institute warned the bill would force cuts to education, health care, and public safety. Tax professional Terry Keebler disputed the gap exists, arguing everyone received four years of relief, just in different years.
By the numbers: 140 online proponents from 39 legislative districts; 0 opponents online. Fiscal note: $600+ million. Estimated actual missing relief: $58 million (per opponent testimony) to $550 million (per proponent testimony).
What's next: No vote taken. Sen. Hardin acknowledged the Legislature must reconcile the fairness issue with budget constraints, but did not directly answer how he would vote given the deficit. The bill remains in committee.
Committee sentiment: Supportive: Sen. Teresa Ibach, Sen. Tony Sorrentino Skeptical: Sen. Mike Jacobson Unclear: Sen. Danielle Dungan
Sentiment estimated from questions and comments — not stated positions.
LB354: Municipal Equalization Fund Limitation
Introduced by: Sen. Stan Clouse | Testimony: 0 proponents, 2 opponents, 0 neutral | Read bill text (PDF)
Sen. Clouse pulls LB354 from consideration, opting for interim study instead. The bill would have limited municipal equalization fund access to smaller cities, potentially freeing $3-4 million for property tax relief. But testimony from Sidney and Beatrice revealed the fund's critical role for communities already struggling with revenue loss and inflation.
Why it matters: The municipal equalization fund, created in the 1990s to help cities meet service needs within levy caps, is a lifeline for smaller communities. Eliminating it for larger cities could force property tax increases or service cuts.
What they're saying: - Opponents: Sidney would lose $374,000; Beatrice would lose $800,000—forcing 24.5% property tax hikes or cuts to libraries, parks, and airports. Both cities emphasized the fund's legitimacy and the hardship elimination would cause. - Sen. Clouse: The fund, like TEEOSA for schools, deserves review after 30 years to assess impact and fairness across communities of different sizes.
By the numbers: 2 proponent letters, 11 opponent letters online. Potential savings: $3-4 million for General Fund.
What's next: Bill held in committee. Sen. Clouse will introduce an interim study to examine the fund's structure and impact before any legislative action.
Committee sentiment: Unclear: Sen. Mike Jacobson, Sen. John Bostar
Sentiment estimated from questions and comments — not stated positions.
LB495: Remove Community Colleges from Truth in Taxation
Introduced by: Sen. Ben Hansen | Testimony: 3 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Community colleges exit truth in taxation process as their property tax role shrinks. LB495 removes community colleges from the Property Tax Request Act (pink postcard) notification requirement, reflecting a 2023 policy shift that slashed their levy authority from 5.4% to 1.3% of local property taxes.
Why it matters: The change is administrative housekeeping—community colleges now receive most funding through state appropriations, not property taxes. Keeping them in the truth in taxation process creates unnecessary postcard costs and compliance burden.
What they're saying: - Proponents: Community colleges themselves requested removal. The Nebraska Community College Association noted the drastic funding model change makes continued inclusion illogical. NACO confirmed community colleges have dropped from fourth to seventh in the property tax load ranking.
By the numbers: 1 proponent letter online; 0 opponents; 0 neutral. Over 1,000 Nebraskans have participated in truth in taxation hearings since LB644 passed in 2021.
What's next: No vote taken. Sen. Hansen encouraged committee members to attend pink postcard hearings to witness taxpayer engagement with the property tax process.
Committee sentiment: Supportive: Sen. Ben Hansen
Sentiment estimated from questions and comments — not stated positions.
LB679: Tax Sale Certificate Bulk Sales and Foreclosure Process
Introduced by: Sen. Beau Ballard | Testimony: 1 proponents, 2 opponents, 0 neutral | Read bill text (PDF)
Tax lien industry seeks bulk sales tool; county officials and competitors warn of unintended consequences. LB679 would let counties package delinquent tax certificates for negotiated bulk sales, a practice used in other states. But testimony revealed deep concerns about fairness, expertise, and market access.
Why it matters: Delinquent property tax sales affect homeowners, farmers, and investors. The current round-robin system ensures equal access; bulk sales could concentrate power in the hands of well-capitalized firms while locking out neighbors and small investors who might buy certificates or help distressed owners.
What they're saying: - Proponents: Bulk sales let counties partner with trusted entities willing to offer payment plans and avoid harsh foreclosure. Current system allows bad actors with hundreds of EIN numbers to exploit the process. - Opponents: The current system works. Bulk sales preclude small buyers, open the door to out-of-state companies, and give county boards—who lack expertise in this nuanced area—too much discretion. LB458 addresses statutory issues without changing the sale process.
By the numbers: 0 proponent letters, 0 opponent letters, 1 neutral letter online. Counties currently sell certificates at face value with 14% interest; bulk sales do not increase county revenue per certificate.
What's next: No vote taken. Sen. Ballard is actively working on amendments with NACO and indicated willingness to collaborate with Sen. Bostar on a unified approach.
Committee sentiment: Skeptical: Sen. Mike Jacobson, Sen. Kathleen Kauth, Sen. Brad von Gillern Unclear: Sen. John Bostar
Sentiment estimated from questions and comments — not stated positions.
Session Notes
The Revenue Committee heard four bills on February 26, 2025. LB81 (property tax credit gap year) generated the most testimony, with 10 proponents and 2 opponents, plus 140 online proponent letters from 39 legislative districts. LB354 (municipal equalization fund) was held in committee by its introducer, Sen. Clouse, who announced plans for an interim study instead. LB495 (community college truth in taxation) passed with minimal opposition. LB679 (tax sale bulk sales) remains under development with amendments being negotiated. Committee Chair von Gillern noted that committee members may come and go during hearings due to other legislative obligations. The committee used a three-minute light system for all testifiers.
Generated by NE Wire Service | Source: Nebraska Legislature Transcribers Office This is an AI-generated summary. Verify all claims against the official transcript.