LINCOLN — Gov. Jim Pillen is officially calling on Nebraska lawmakers to address “inconsistencies” in the state’s main school aid formula in the 2025 legislative session.

Pillen, in a Friday news release, pointed to a new report from his policy research office that compiled property tax data for new state senators. The governor noted that newly elected senators — with 16 fresh faces set to join the body in January — might not have a complete understanding of the state’s funding formula, or the impact of recent legislation.

The report includes data from Nebraska’s 244 school districts in the previous school year and indicates how decreases in state aid led to property tax increases.

“This document helps illustrate the impact of those changes and, hopefully, [will] inform discussions as we embark on the next legislative session and resume efforts to provide additional property tax relief to Nebraskans,” Pillen said in a statement.

TEEOSA breakdown

The conversation revolves around the Tax Equity and Educational Opportunities Support Act, better known as TEEOSA, which has been perennially updated since its adoption in 1990. 

TEEOSA, also known as the “equalization aid” formula, determines funding aid based on the difference of about 18 “needs” minus six “resources” for each public school district. If “resources” outweigh “needs,” the district doesn’t receive the aid and is classified as “unequalized.”

“Needs” include student growth, poverty and English as a second language. “Resources” include net option enrollment, allocated income tax funds and base aid per student.

Another “resource” is based on possible property tax collections, assuming a $1 hypothetical tax rate across each school district. This is the amount the state assumes a district could raise if it had that high of a tax rate, based on annual valuations.

This means when valuations go up, a district’s equalization aid automatically goes down, possibly to the point they are “unequalized” and lose the extra funding.

Finding stability

For example, Lincoln Public Schools, the state’s second largest district, is likely to be unequalized in the coming years. LPS lost $31.85 million in state aid this year, a decrease of 30.4%, and raised property taxes by $31.57 million in response, a 9.6% increase.

Three other school districts — Millard Public Schools, Papillion-La Vista Public Schools and Gretna Public Schools — also saw “dramatic drops in state aid.” Combined with LPS, the four districts lost $56.27 million in state aid and increased property taxes by $62.25 million. That accounts for 82% of the total increase in property taxes statewide for that period.

Kenny Zoeller, director of the governor’s policy research office, said state aid decreased for 111 school districts for the 2024-25 school year.

“We need to find a way to better help districts budget for the aid they do get, thereby creating some predictability and, hopefully, further reduce what Nebraskans end up paying in property taxes year over year,” Zoeller said in a statement.

Pillen and Zoeller do not explain how to provide more stability. However, they state that initial research indicates newly placed soft “caps” on how much school districts can increase their property taxes slowed total increases to 2.5%, or about $75.82 million.

That’s the smallest annual increase since 2018 and the smallest percentage increase this century.

‘They’re on pins and needles’

Multiple state lawmakers proposed addressing TEEOSA in the Pillen-led special session on property taxes this summer, including State Sens. Lou Ann Linehan of Elkhorn and Jana Hughes of Seward.

Linehan, the Legislature’s outgoing Revenue Committee chair, called for eliminating the “resources” side of the funding formula, to better calculate each district’s needs. She later proposed using TEEOSA to distribute increased sales and “sin” tax revenue to districts for property tax relief. Linehan is term-limited and won’t return next year.

Hughes, a former school board member in Seward, worked with a bipartisan group of lawmakers on a proposal to reform TEEOSA over 10 years, or sooner if possible. Her proposal would have decreased maximum school property tax rates gradually over 10 years.

Pillen had proposed having the state take over nearly all local operational property taxes, which account for an average of 60% of Nebraskans’ property tax bills. However, when Linehan introduced Pillen’s core proposal, it did not include that component.

Hughes said she agrees TEEOSA needs to be a focus but thinks it will take time and an in-depth look, such as what happened when TEEOSA was first created, with the Revenue and Education Committees collaborating on the proposal, and relying on years of research and design.

“I get this sense from schools right now, every year they’re on pins and needles of what is going to change or what is the legislative body going to do?” Hughes said.

‘The formula is inconsistent’

In 2023, the Legislature helped to increase aid to schools by doubling special education reimbursements from 40% of expenditures to 80% and set a baseline “foundation aid,” about $1,500 per student in each public school district.

Hughes said some school districts “hunker down” and ask residents to invest through property taxes to prevent budget cuts or to react to uncertainty of whether future funds will be available.

“It’s just a little vicious cycle a bit when valuations go up,” Hughes said.

State Sen. Brad von Gillern of Elkhorn, vice chair of the Legislature’s Revenue Committee, said he hadn’t yet digested the report but agreed with its main findings. He said he’s aware of people encouraging a reconsideration of TEEOSA and is “supportive of a thoughtful and patient process that includes all stakeholders, to improve the state funding calculation.”

Hughes said she and a team of lawmakers will return with a 2025 proposal that will be smaller but still “take a little bite” out of reforming TEEOSA.

Pillen has requested that lawmakers consider similar legislation.

“The formula is inconsistent and hits taxpayers hard,” the policy research office report states. “It is not fair to them or the schools. Providing certainty to school districts will allow Nebraska to have sustained property tax reductions for the first time in history.”

The Lincoln Children’s Zoo in Nebraska announced the arrival of three red panda cubs on Thursday, born on August 10, marking a major success for the zoo’s conservation program.

The triplets—two males and one female—were born to third-time mom Tián and second-time dad Rowan. Though the cubs have yet to be named, their healthy birth represents a happy moment in efforts to conserve the endangered red panda species.

“Red pandas are the smaller cousins of giant pandas—they’re not raccoons,” Ruth Marcec-Greaves, the zoo’s general curator, told Newsweek.

Native to high-altitude temperate forests across the eastern Himalayas and southwestern China, red pandas face increasing threats from habitat destruction and climate change, which are reducing their cold, bamboo-rich forest homes.

“Their habitat is slowly diminishing and the change in climate is definitely threatening them,” Marcec-Greaves added.

The Lincoln Children’s Zoo, which is part of the Association of Zoos and Aquariums’ Species Survival Plan Program, has carefully crafted an environment that allows Tián to raise her cubs naturally.

Zookeepers provided six nest boxes lined with bamboo and wood wool, mimicking the tree hollows or rock crevices a red panda mother would typically use.

Red pandas are known to be vigilant and adaptive mothers, often moving their cubs to different nests for protection or when facing stressors.

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In this secure setting, Tián has chosen her preferred nest box and has been diligently caring for the cubs, who are now 3 months old and beginning to explore their environment by learning to climb.

While triplet red panda births are not uncommon, the survival of all three triplets is a noteworthy achievement, attributed to Tián’s attentive care.

“We’re very, very excited in this case that our mother was just such a good mother. She successfully raised all three of these without any help,” Marcec-Greaves said.

As a species classified as endangered on the International Union for Conservation of Nature Red List, red pandas are at high risk of extinction, with populations in the wild halving over the past 20 years because of ongoing threats such as habitat loss.

“The birth of these triplets is important for animal conservation efforts, and the red pandas at the Zoo help to raise awareness of the threats their counterparts face in the wild,” Evan Killeen, CEO of Lincoln Children’s Zoo, said in a statement.

While the cubs are not yet on public display, the zoo expects to debut them by December. In the meantime, zoo staff hope these new additions will inspire a new generation of conservationists.

“Where else are you going to see a red panda? Not everyone can get to the Himalayas to see them in the wild,” Marcec-Greaves said. “In a zoo where we can tell you about them, tell you about their lives, and you can see them playing together, that’s a huge, huge help to their conservation.”

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GRETNA — The pursuit of the “good life” in Nebraska made a few key strides this week — as measured by progress toward building Good Life Districts aimed at luring new tourism, retailers and other pizzazz to the state.

To date, the Nebraska Department of Economic Development has designated four geographical areas as Good Life Districts. Five in total are allowed under recently passed state legislation, which makes the districts eligible for public incentives to help create unique tourist-oriented campuses expected to generate jobs and economic activity.

Among the latest developments: 

• In Omaha, unofficial election results show that voters approved a measure on Tuesday’s ballot that empowers city officials to create an “economic development program” to guide development in a Good Life District near 192nd Street and West Dodge Road. Voter approval is needed to tap financial incentives that private developer Curt Hofer can use to help build out the 200-acre Avenue One district, which anticipates luring $1.4 billion in investment and 4,083 jobs. 
• In Gretna, City Council members on Tuesday voted to schedule a Jan. 14 special election that will ask local voters to pass a similar Good Life measure. Gretna’s is the largest of the state’s Good Life Districts, with boundaries including and surrounding the Nebraska Crossing shopping center. Rod Yates, who owns the mall and also is the district applicant, envisions up to 4,500 acres of sports-centric training facilities, professional teams, residential buildings and more. 

Time of the essence

Per Good Life legislation passed in 2023 and refined in 2024, the state has reduced the state sales tax within the boundaries of the Gretna area and Omaha Good Life Districts — from 5.5% to 2.75%. The idea was for that money to be redirected instead to help develop the respective districts, but first needed is the voter approval.

Perhaps nowhere more than Gretna is time, at this point, of the essence. That’s because an average of nearly $300,000 a month in state sales tax has been forfeited since the rate was reduced in April.

Nebraska Crossing stores are within the district’s boundaries. According to the Nebraska Department of Revenue, the state has forgone nearly $1.3 million in state sales tax from April through August. April collections were incomplete, and figures for the last two months were not available.

Yates said in an interview he had asked that the state sales tax rate not be reduced until after his proposal was farther along. He said he was told that was not possible, and that the timing related to the DED approval date and legislation language.

Grant Pille, president of the Gretna Area Chamber of Commerce, urged Gretna not to dawdle.

“The longer this is delayed, the longer the city misses out on $300,000-$500,000 per month in Good Life revenue,” he said in a letter urging the council to move on scheduling the special election.

City officials said that the council earlier had delayed setting the election, upon the state’s recommendation.

No ‘gap’ in Grand Island

In Grand Island — where a Good Life District is being led by Omaha-based Woodsonia Real Estate — there was “no gap” in which revenue was lost, said City Administrator Laura McAloon.

That city held its special election related to a Good Life District on Aug. 14. Voters approved it, and the City Council adopted an economic development program the following month. 

The program called for the city to essentially recoup the eliminated portion of the state sales tax via a new 2.75% occupation tax on all items subject to the state sales and use tax.

All revenue derived from the occupation tax is deposited into a fund to be used for development within the 875-acre Grand Island district, which includes an existing retail corridor as well as a largely undeveloped city-owned tract.

“We’re not losing any revenue,” McAloon said. “We’re moving quickly. We don’t want a penny to go unused.”

McAloon said the city will use a portion of the new occupation tax revenue to pay for a master planning process aimed at transforming the city tract within the district into a sports complex that will serve locals but also draw regional tourism.

According to its DED application, the Grand Island project estimates creating $550 million in investment and 5,000 new jobs.

Statewide updates

Updates on other districts:

In Omaha, unofficial election results as of Thursday showed about 97,000 voters for and 78,500 against establishing an economic development program for Omaha’s Good Life District.

Next, the Omaha City Council would create the program that lays out how to capture and redirect the eliminated state sales tax to help pay for what developer Hofer envisions as a 200-acre western gateway to Omaha.

The reduction of the state sales tax rate in the Omaha district boundaries in April has had relatively little impact, as Hofer’s proposed stores and commercial structures have yet to rise.

According to his DED application, the estimated $1.4 billion project site would create 4,083 jobs. Hofer said he hopes to announce significant tenants in the spring, and “go vertical” with new buildings later next year.

“We’ve been very patient,” he said, adding that he is courting unique residential, restaurant and entertainment venues.

In Bellevue, the applicant for the Good Life District is the city, not a private developer. The biggest regional and national draws at the site near Highways 75 and 34 will be either city-owned or city-supported projects.

Since the city won’t be remitting any tax revenue collection to a private developer, there is no need for a special election, said Harrison Johnson, director of community and economic development.

Occupation taxes assessed in the district essentially will recoup the eliminated state sales tax, he said, and help the city pay for infrastructure and construction of amenities on the site. 

The entertainment-focused project is to be anchored by a water park with a retractable roof and a resort-style recreation area. A mix of commercial venues includes a theater and golf sports complex.

“The project’s new-to-market feature will be the year-round climate controlled walkways facilitating the resort recreation style development that will act as the center draw for all future attractions,” said a city document outlining the district vision.

According to Bellevue’s application, the estimated $1.36 billion investment is to create 7,820 jobs. Approved in July, the Bellevue district was the fourth approved by the DED.

One more opening

Still under the agency’s review are competing applications for Good Life Districts in Papillion and in Kearney. The Papillion project, according to a DED spokeswoman, would create $1.6 billion in estimated investment and 2,906 new jobs. The estimated $225 million Kearney project is envisioned to bring more than 6,500 jobs.

Certain criteria must exist to become a Good Life district eligible for related incentives. The applicant, for instance, must demonstrate minimum levels of new investment, tourism, jobs and new-to-Nebraska retail entertainment and dining attractions. 

The expectation is that economic activity will multiply in and around the districts.

Gretna Mayor Mike Evans said he is looking forward to his city’s special election related to the Good Life District. The City Council voted unanimously to set the Jan. 14 election date.

While the Gretna City Council on Tuesday also unanimously rejected the terms of Yates’ Good Life District proposal, Evans said the city remains open and ready to negotiate. 

Another property owner within the district is also interested in developing a tourism-related project, said Evans. He said the city believes that property owners beyond Yates, who applied for the district designation, can seek to use revenue derived from a “replacement” tax the city would approve to recoup eliminated state sales tax.

“We feel there can be multiple developers within the district,” said Evans. “As long as they’re meeting the expectations of the DED and the statute — transformative change, tourism, et cetera.”