LINCOLN — Nebraska Gov. Jim Pillen this week directed about $20 million in unused property tax relief funds and higher-than-expected casino revenues to instead be distributed to taxpayers.

Pillen, in an executive order Monday, said the state had more casino gambling revenue and unused money in two property tax relief funds than lawmakers had anticipated when they passed the state’s latest two-year budget in May.

Pillen ordered Nebraska Property Tax Administrator Sarah Scott to distribute the full increased amounts as she allocates tax credits in the coming months.

“Whenever possible, we must get bureaucracy out of the way and ensure that Nebraskans receive the full amount of property tax relief possible,” Pillen said in a Tuesday statement announcing the order. “This is a common-sense, good government measure that will help Nebraska families across the state.”

The combined result means an additional $77 million state investment in tax credits to offset local property taxes compared to last year, according to the state budget.

The executive order states that “recent events, increasing revenues, appropriation limitations and transfer timing” meant certain funds had been retained and were not being disbursed in the manner that would “produce the maximum property tax relief” for taxpayers.

Before the additional $20 million, the legislatively allocated total in the Property Tax Credit Cash Fund, with credits allocated to counties as a portion of statewide valuations, was $422 million. Total state funding in the School District Property Tax Credit Fund, which distributes credits to counties based on the prior year’s amount of local school taxes, was $780 million.

Pillen’s office did not specify how the $20 million would be divided between the two tax credit funds.

Lawmakers have sought to use the school district tax credits to supercharge property tax relief efforts, but with the state facing budgetary constraints and stiff opposition to expanding the number of items subject to sales taxes to increase property tax credits, multiple legislative and Pillen-backed efforts have failed to secure long-term, structural changes. That includes the 2024 summer special session focused on property taxes.

Property taxes levied statewide last year did decrease by $6 million out of a $5.3 billion total. It was the first time the state saw a decrease in total property taxes paid in 26 years, a feat largely the result of the state moving community colleges from property tax rolls onto state income and sales tax rolls.

However, property taxes levied statewide increased by about $300 million a year in 2022 and 2023, the largest bumps in state history.

While Pillen and lawmakers have placed some restrictions on how fast schools, cities and counties can increase property tax rates, the governor himself has acknowledged that property taxes are likely to increase next year as he and a supermajority of lawmakers struggle to see eye-to-eye on a path forward.

This spring, lawmakers approved a new statewide commission to examine school financing, with commissioners hoping to produce the first set of recommendations by December. The mostly Pillen-appointed commission next meets on Monday.

Pillen on Tuesday blamed “ideological beliefs and special interest groups” as the reason the Legislature had “unfortunately failed to deliver true and meaningful property tax relief.”

As a response, voters could face citizen-led ballot measures on the 2026 ballot seeking to eliminate property taxes or halve the amount of property valuations that could be used in calculating property tax bills.

“The state should never sit on funds that can be distributed to taxpayers,” Pillen said Tuesday. “We will continue to put all our efforts into getting the crippling property tax crisis fixed for Nebraskans.”

This story was published by Nebraska Examiner, an editorially independent newsroom providing a hard-hitting, daily flow of news. Read the original article: https://nebraskaexaminer.com/2025/09/16/pillen-adds-20-million-to-nebras...