NE LB1038

LB1038 - Nebraska School Funding and Property Tax Reform

• Reduces the maximum school district property tax levy from $1.05 to $0.50 per $100 of taxable valuation beginning fiscal year 2026-27, while authorizing districts to levy additional amounts if state funding falls short of equalization aid requirements

• Terminates the Property Tax Credit Cash Fund and School District Property Tax Relief Credit Fund, transferring remaining balances to the Education Future Fund; limits the Property Tax Credit Act to tax years 2007-2025 and the School District Property Tax Relief Act to tax years 2024-2025

• Modifies the state aid valuation formula by reducing the percentage of actual value used for calculating state aid (from 96% to 86% for non-agricultural real property, and from 72% to 42% for agricultural/horticultural land)

• Eliminates community achievement plan aid and allocated income tax funds as formula resources for school fiscal year 2026-27 and thereafter, while establishing a base levy adjustment mechanism tied to equalization aid calculations

• Reduces the maximum special building fund levy from 14 cents to 10 cents per $100 of taxable valuation (with grandfather provisions for existing projects) and removes special building funds from the School District Property Tax Limitation Act calculations