Since taking office, property tax relief for Nebraskans has been my top priority. Working with the Legislature, we increased the Property Tax Credit Relief Fund by 60 percent over the past four years. Right now, I have three property tax relief proposals before the Legislature. This week, I will be testifying on two of them during a hearing in the Revenue Committee.
The first proposal is LR 8 CA from Senator Lou Ann Linehan of Elkhorn, a constitutional amendment to cap property tax increases by local governments. Since 1980, property taxes have increased on average at the rate of five percent annually. Right now, there is no limit on how much your property taxes can go up each year. With 2,500 local units of government and thousands of people on their local boards making decisions about property taxes, it’s tough to get everyone moving towards property tax relief. Putting a cap on tax increases gives Nebraskans certainty about their tax picture, and makes the local property tax system more transparent and accountable. It also maintains local control. If taxpayers believe local governments need additional property tax resources, a vote of the people can override the three percent cap.
The second proposal is LB 303 from Senator Brett Lindstrom of Omaha, which ensures that Nebraska’s property owners receive at least $275 million of relief annually through the Property Tax Credit Relief Fund. In my first four years, the Legislature and I worked together to increase the Property Tax Credit Relief Fund from $140 million to $224 million annually. This year, I have recommended an additional $51 million, a 23 percent increase, to bring the fund to $275 million of relief annually, nearly doubling the amount of tax relief Nebraskans were receiving five years ago. At this time, the tax relief delivered through this fund must be appropriated by the Legislature every two years. Putting a requirement for a minimum amount in law would give taxpayers more certainty about ongoing relief, and would be a preventative measure against future Legislatures taking the tax relief away from taxpayers.
At the hearing on these two proposals, I look forward to making the case for property tax relief this session. The Legislature has its work cut out for it on this issue. Past Legislatures tried a number of approaches, but have not been able to tackle the nuts and bolts of structural reform needed to change our property tax system. Many previous attempts have focused on raising other taxes in the name of property tax relief. Because these efforts did not cut or control property taxes, they continue to grow today. It is important we get something done this year that actually cuts taxes and reforms our property tax code.
Here is another idea that can help. Senator Steve Erdman of Bayard has a bill to change the way agricultural land is valued for property tax purposes. Currently, ag land is valued based on market sales, which means a few high priced land sales can drive up everyone’s property valuations and consequently their taxes, too, pretty quickly even if your land hasn’t sold in years. Senator Erdman is proposing to move to an income potential valuation system, which considers how much income you can earn off the land you own. Ag states with this system include North Dakota, South Dakota, Kansas, Iowa, Wisconsin, Illinois, Indiana, and Ohio. This system is much fairer, more standard, and would help make Nebraska more competitive.
These are just a few of the ideas under consideration in the Legislature that could help move us closer to delivering property tax relief and fixing our broken tax code. I hope you will write your Senator and let them know that you support getting LR 8 CA and LB 303 passed to help achieve these goals. You can find all their contact information at www.NebraskaLegislature.gov. If you have questions on this or any other matter, please email me at email@example.com or call 402-471-2244.