PREPARED BY: John Wiemer
LB 272 DATE PREPARED: January 28, 2025
PHONE: 402-471-0051
Revision: 00
FISCAL NOTE
LEGISLATIVE FISCAL ANALYST ESTIMATE
ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS $62,980,000
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS $62,980,000
Any Fiscal Notes received from state agencies and political su bdivisions are attached following the Legislative Fiscal Analyst Estimate.
LB 272 amends section 77-3506 regarding the Homestead Exemption Program.
Section 77-3506 is amended so that there s hall be exempt from taxation, on any homestead described in subdivision (2)(g), a
percentage of the exempt amount. The percentage of the exempt amount shall be equal to the disability per centage of the veteran of
the homestead.
Subdivision (2)(g) is added to statutes and requ ires that beginning January 1, 2026, a vet eran who was discharged or otherwise
separated with a characterization of honorable or general (under hon orable conditions), who is drawing compensation from the United
States Department of Veterans Affairs because the veteran is at le ast 10% disabled but less than 100% disabled due to a service-
connected disability, and who is not eligible for total exemption under sections 77- 3526 to 77-3528, an unremarried surviving spouse of
such a veteran, or a surviving spouse of such a veteran who remarries after attaining the age of 57 years is eligible for the homestead
exemption amount described ab ove.
The Department of Revenue (DOR) estimates the following increase to General Fund expenditures as a result of the bill:
• FY26: $0
• FY27: $62,980,000
• FY28: $66,565,000
• FY29: $70,353,000
The DOR estimates minimal costs to it to implement the bill.
There is no basis to disagree with these estimates by the DOR.
Political subdivisions are estimated to be reimbursed by the state for property tax losses as a result of changes to the Homestead
Program under this bill.
The Douglas County Assessor/Register of Deeds Office estimates the need for 1 FTE to process additional Homestead applications as
a result of the bill.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 272 AM: AGENCY/POLT. SUB: Department of Revenue
REVIEWED BY: Ryan Yang DATE: 1/24/2025 PHONE: (402) 471-4178
COMMENTS: No basis to disagree with the Department of Revenue assessment of fiscal impact from LB 272.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 272 AM: AGENCY/POLT. SUB: Douglas County Assessor/Register of Deeds
REVIEWED BY: Ryan Yang DATE: 1/23/2025 PHONE: (402) 471-4178
COMMENTS: No basis to disagree with the Douglas County Assessor/Register of Deeds assessment of fiscal impact
from LB 272.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 272 AM: AGENCY/POLT. SUB: Lancaster County Assessor/Register of Deeds
REVIEWED BY: Ryan Yang DA TE: 1/22/2025 PHONE: (402) 471-4178
COMMENTS: No basis to disagree with the Lancaster County Assessor/Register of Deeds assessment of no fiscal impact
from LB 272.
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 272 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Douglas County Assessor/Register of Deeds Office
Prepared by:
(3) Michael Goodwillie Date Prepared:
(4)
1/22/2025 Phone:
(5)
402-444-6703
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
$48,900 $49,800
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
$48,900 $49,800
Explanation of Estimate:
LB 272, beginning in 2026, would expand the homestead exemption to include veterans
who are at least 10% but less than 100% disabled due to a service- connected disability. They would be
eligible for a percentage exemption on the value of their home based on their disability percentage. Because
they are in the service- connected disability group, the exemption would not be limited by the value of their
home or their income—a means test that applies to other classes of homestead applicants. As with the other
recipients of homestead exemption, the “tax loss” to local political subdivisions would be reimbursed by the
state of Nebraska.
A version of this bill was proposed last year. At that time, we estimated the potential cost of the bill to this
office, using figures obtained from County Veterans’ Services. We have sought to update our numbers from
them on the number of potential applicants but have yet to receive the data. Our suspicion is that the figures
regarding the number of veterans in this category will not significantly change.
According to the Douglas County Veterans Services Office, 7,363 veterans in Douglas County were rated at
less than 100% disability. We don’t know if all of them have service- connected disabilities and are owner-
occupants of dwellings as defined by the Homestead Exemption statutes and because of that we don’t know
how much value would be exempt and how large the “tax loss” reimbursed by the state to local political
subdivisions would be. That 7000+ number is the outer edge of potential applicants of that class. For 2024,
the average single-family dwelling in Douglas County had a value of $272,000. Hypothetically, if 1,000 people
from this class applied and owned a house worth the average value amount, that represents $272,000,000 in
value. Multiplied by a 2.03% tax rate (the consolidated rate in OPS) , that represents $5, 521,600 in property
taxes. Because the people in this class would be percentage qualifiers, based on their disability percentage,
the tax loss would be something less than that. Without any empirical basis, if you just said that the average
disability rating was 50%, you would have a tax loss for this class of $2,760,800. Under current law, the State
of Nebraska would reimburse the local political subdivisions for that tax loss. Generally, Douglas County
represents between 25 and 30% of the homestead tax loss statewide. This added class could add somewhere
in the neighborhood of $11,000,000 to the state reimbursement amount. I realize that these are, at best,
somewhat educated guesses because there are pieces related to the home ownership and value of those
homes for people in this class that we simply don’t know. But there certainly would be an uptick in applicants,
the amount of tax loss, and the amount the state would need to reimburse political subdivisions.
Administratively, there would be some additional work for this office in processing additional applications. It is
hard to estimate what that would be without having a more precise idea of how many more applications we will
get. But as a metric, we have just under 15,000 currently in the homestead exemption program and those
applications are reviewed and processed by a staff of nine. Those nine people also process business personal
property returns in the same time window as the homestead exemption application period. We think the
potential added applications would necessitate the addition of one staffer at a cost of $48,900.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Assessor Support Tech I 1 1 $48,900 $49,800
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… ..... $48,900 $49,800
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 272 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Lancaster County Assessor/Register of Deeds
Prepared by:
(3) Dan Nolte Date Prepared:
(4)
01/21/25 Phone:
(5)
402-441-7463
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate: The proposed legislation will hav e no fiscal impact on this office.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Benefits………………………………... ……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....
LB 272 Fiscal Note 2025
State Agency Estimate
State Agency Name: Department of Revenue Date Due LFO:
Approved by: James R. Kamm Date Prepared: 01/24/2025 Phone: 471-5896
FY 2025-2026 FY 2026-2027 FY 2027-2028
Expenditures Revenue Expenditures Revenue Expenditures Revenue
General Funds $ 0 $62,980,000 $66,565,000
Cash Funds
Federal Funds
Other Funds
Total Funds $ 0 $62,980,000 $66,565,000
Major Objects of Expenditure
25-26 26-27 27-28 25-26 26-27 27-28
Class Code Classification Title FTE FTE FTE Expenditures Expenditures Expenditures
Benefits………………………………………………………………………………………………………….
Operating Costs………………………………………………………………………………………………….
Travel……………………………………………………………………………………………………………
Capital Outlay…………………………………………………………………………………………………...
Capital Improvements…………………………………………………………………………………………...
Total…………………………………………………………………………………………………………….
Currently, Veterans with 100% service-connected permanent disability, veterans with 100% service-connected
temporary disability and paraplegic or multiple amputee veterans are eligible for the homestead exemption but
those with less than 100% service -connected disability are not. LB 272 would exempt veterans having at least
10% but less than 100% service-connected disability in proportion to their percentage of disability. The
unremarried surviving spouse of such veteran or one who remarries after reaching age 57 would also qualify.
Would require annual application as is already done with those temporarily disabled.
It is estimated that LB 272 will have the following impact on the General Fund expenditures:
Fiscal Year
General Fund
expenditures
FY 2025-2026 $ -
FY 2026-2027 $ 62,980,000
FY 2027-2028 $ 66,565,000
FY 2028-2029 $ 70,353,000
It is estimated that there will be minimal costs to the Department of Revenue to implement this bill.
The operative date for this bill is three months after adjournment of the Legislature. Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 272 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Nebraska Association of County Officials
Prepared by:
(3) Elaine Menzel Date Prepared:
(4)
1/21 /2025 Phone:
(5)
402.434.5660
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate:
LB272 would add a homestead exemption applicable to disabled veterans and surviving spouses. The
exemption would begin January 1, 2026 , and apply to a veteran who was discharged or otherwise separated
with a characterization of honorable or general (under honorable conditions), who is drawing compensation
from the United States Department of Veterans Affairs because the veteran is at least 10 % disabled but less
than 100 % disabled due to a service- connected disability, and who is not eligible for total exemption, an
unremarried surviving spouse such a veteran, or a surviving spouse of such a veteran who remarries after
attaining the age of 57 years.
According to the U.S. Bureau of Labor Statistics (2023), 5.9% of veterans have a 30% or less disability, 5.1%
have a 30-50% disability, and 16.4% have a 60% or higher disability. A pplying these percentages to
Nebraska's veteran population of 114,353 (as estimated by figures and projections from the U.S. Department
of Veterans Affairs, 2024), this means that of Nebraska veterans, 6,741 have a 30% or less disability, 5,865
have a 30-50% disability, and 18,804 have a 60% of higher disability. According to Zillow, the median sale
price of a Nebraska home is $260,000. According to the Nebraska Department of Revenue, the average tax
rate in Nebraska counties was 1.5326, meaning that approximately $125,161,312 is currently collected from
Nebraska veterans with disabilities. R educing this amount based on the percentage of disability for each class
of veterans would yield $77,350,169, or a loss of $47,811,143 of tax.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....