Chapter 27: Nebraska

Historically, funding for Nebraska’s public schools was based on the local property tax. Property taxes were solely established to fund public education under the Common Schools Act, which was passed by the Nebraska Territorial Legislature in 1855. Until the mid-1960s, the general property tax was laid at both local and state levels. Indeed, the entirety of state government was financed primarily through property taxes until 1954 when voters approved a constitutional amendment adopting an income and/or sales tax meant to automatically eliminate the general property tax, although no enabling statutory action was taken. In 1965, the legislature developed the first income tax, triggering the 1954 amendment for the first time. As a result, until 1965 the property tax functioned as the principal funding source for all state governmental revenue in Nebraska.