Tag: valuation

Eric Underwood, former chair of the NEGOP, center, leads a news conference with his new nonprofit Advocates For All Nebraskans to announce two ballot measures intended to lower property taxes and cap annual increases to property valuations. Aug. 25, 2025. (Photo by Zach Wendling/Nebraska Examiner)

LINCOLN — Advocates launched a pair of ballot measures Monday for the 2026 election, one that aims to halve property taxes and the other to cap annual property valuation increases.

The petitions are the first of a handful being sought for 2026 by the new nonprofit “Advocates For All Nebraskans.” Leading the effort is former Nebraska Republican Party Chair Eric Underwood of Malcolm, State Board of Education member Kirk Penner of Aurora, former Nebraska State Patrol Superintendent Tom Nesbitt of Lincoln and former Lincoln talk radio host Doug Fitzgerald.

The first petition would amend state law and halve the percentage of a property’s valuation subject to property taxes after 2026 — for homes, from 100% to 50%, and for agricultural or horticultural land, from 75% to 37.5%.

A total of $5.3 billion in property taxes was assessed statewide in each of the past two years. A 50% reduction would mean a property tax savings of more than $2.6 billion. 

“This immediate property tax relief and others that are out there are literally one signature and then one vote in 2026 away from becoming reality for the people,” Underwood said at a Monday news conference launching the effort.

The second petition would amend the Nebraska Constitution to cap property valuation increases at the growth rate of Nebraska’s general fund tax receipts (as calculated at the end of each calendar year) or 3%, whichever is less.

The valuation cap would not apply when a property is built, sold or purchased.

Influence of valuations

Reducing property valuations does not mean property taxes will go down at the same rate, or at all.

There are more than 2,300 taxing subdivisions in the state, including 245 school districts, 93 counties, 528 municipalities, 408 fire districts and 327 townships. About 60% of property taxes pay for local schools, 17.2% for counties and 11.5% for municipalities.

The proposed ballot measures would offer no replacement revenue to cover immediate reductions in property valuations.

Qualifying for the ballot

Voter-led changes to state law require verified signatures from at least 7% of registered voters (about 90,000). Voter-led changes to the Nebraska Constitution require signatures from at least 10% of voters (about 126,000). 

Initiatives also need qualified signatures from at least 5% of registered voters in at least 38 of the state’s 93 counties.

Voter totals are calculated when petitions are due to the Nebraska Secretary of State’s Office.

Petitions seeking verification on the November 2026 ballot must be submitted in early July 2026.

Some local officials speaking with the Nebraska Examiner after Monday’s announcement said they were still reviewing the ballot language but noted a taxing entity at or below half of its tax-asking authority could theoretically make up the difference over time.

That would mean a school district at or below a 52.5-cent levy and counties or municipalities at or below 22.5-cent levies. The Legislature has capped how fast these three governments can increase property tax rates year over year.

School and local government officials have in the past worried that tight spending caps could hinder growth or hurt employee recruitment or retention, and some have noted local leaders are buying products facing inflationary pressures as taxpayers are.

Property tax rates can vary widely in the allowable range, such as for school districts. In the most recent year, Hyannis Public Schools and Humphrey Public Schools had mainline school levies of roughly 35 cents, while others were at or just below a $1.05 cap — public schools in Sidney, Plattsmouth, Medicine Valley, Gering or Walthill

Entities within the upper half of their tax-asking authority would absorb the reduced valuations and resulting decline in tax revenue, unless they have access to additional state funding or other sources of revenue.

In short, some Nebraskans would not receive a straight 50% reduction in property taxes.

It’s not yet clear how lower valuations might pair with changes to the state’s main funding formula for schools. A new state commission is looking at long-term fixes to that funding, with first recommendations to the Legislature due Dec. 1.

Leadership for the Nebraska State Education Association, Nebraska Association of County Officials and League of Nebraska Municipalities had no immediate comment Monday.

Underwood argued property tax savings from the ballot measure would be spent in local communities, which he said would energize and boost state and local sales or income tax revenue.

‘Rebalancing the funding structure’

Penner, who sat on the Aurora school board for 16 years before joining the State Board of Education in 2021, said he understands that property taxes play a balanced role in supporting schools. He said the ballot measures are “not about crippling local services. It’s about rebalancing the funding structure.”

Over the next 18 months, Penner challenged local governments and taxing entities to prepare and engage with constituents to find new efficiencies and sustainable funding models. He said it could be a “new era” for transparency and direct public engagement.

“This is where elected representation should always be: a purposeful engagement of government to their constituents in a time and manner that truly listens to the voice and embraces the will of the people,” Penner said.

Underwood told the Examiner he understands the effort might seem a “forceful way” forward, but he asked at what point conversations would occur without the people as the “primary driver.” He said he also believes the effort could increase voter turnout in the 2026 midterm elections.

The group intends a “staged” release of petitions for 2026, Penner said, with the first two. He pledged another petition would “ensure our schools are properly funded while still moving them away from heavy reliance on property taxes.” He said the school funding mechanism is “broke” and has been for a while.

Underwood said subsequent petitions would prioritize local control and lead to a “historical rebalancing of schools” with a focus on caring for teachers and ensuring student education.

The group did not further detail or offer a timeline for when future petitions would be released.

Countering or pairing with EPIC Option

The Nebraska Constitution requires ballot measures to contain no more than a “single subject,” barring detailed but interconnected changes from appearing as a single item and requiring signatures to be gathered across multiple petitions, with each voted on separately.

However, juggling multiple petitions has proven challenging, as indicated in past years for medical cannabis advocates or the similarly tax-centered “EPIC Option.”

The “EPIC Option,” an acronym for the effort to eliminate property, income, inheritance and corporate taxes, is trying again for November 2026 with a “2.0” version that would take effect in 2028. Instead of two petitions to detail an alternative consumption tax, supporters landed this cycle on a single sentence. 

If the EPIC Option is successful, the Legislature would be left to devise alternative revenue.

Underwood told reporters Monday that his group’s effort no way counters EPIC and can be complementary or parallel.

“We don’t think there’s going to be confusion,” Underwood said.

However, former State Sen. Steve Erdman of Bayard, an EPIC creator and spokesperson, said while the Underwood-led effort might make Nebraska’s tax system better, it won’t fix the issue.

“There’s only one way to fix it, and that’s start over,” Erdman told the Examiner.

Erdman said he is worried about confusion because the more explaining his team had to do with EPIC, it hurt signature gathering in the past year, compared to now. He also expressed concern about whether the Legislature would carry out the intended 50% property tax reduction or whether capping valuations up to 3% would instead lock in unfair valuations.

State Sens. Kathleen Kauth of Omaha and Bob Andersen of north-central Sarpy County are continuing to look at legislative ways to tackle property valuations, including a cap as Underwood’s team proposed. 

The Andersen-Kauth effort did not advance past the Revenue Committee this spring, but the pair has not given up ahead of the 2026 legislative session, with hopes to reach the 2026 ballot, too.

‘Historic, lawful power’

Underwood, who led the Nebraska Republican Party between 2022 and 2025, and his fellow ballot sponsors said the Legislature has not listened to the public on property taxes, an argument Erdman has also championed.

The 49-member, officially nonpartisan Legislature, where members do not formally caucus by party, has a Republican supermajority. Underwood and his supporters are Republicans.

Fitzgerald said he’s heard loud and clear from Nebraskans fed up with the state’s “property tax nightmare.”

Nesbitt said he appreciates the one-house Legislature, the only statehouse of its kind in the country. But he said that “over the years, I’ve watched an erosion of something fundamental: the will of the people taking a back seat to the machinery of government.”

“Our petitions aren’t radical by any means, or even partisan,” Nesbitt said. “They’re to return to a historic, lawful power of Nebraskans to legislate of, by and for the people.”

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