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Property tax relief remains elusive in Nebraska

LEAD Comment: The Legislature passed several bills that affect agriculture, but the lack of progress on the property tax issue was a disappointment.

June 7, 2024

4 Min Read
Nebraska capital building
SHORT SESSION: Ag bills dealing with updating monitoring of foreign owners of farmland in the state, increasing the corn checkoff and an incentive for reducing nitrogen applications all gained passage in the recent Nebraska Unicameral. Curt Arens

by Fred Meyer

I am a graduate of LEAD Class 14, and I was appointed by Gov. Jim Pillen in November to replace Sen. Tom Briese, who resigned, to represent District 41 in the Nebraska Legislature.

Over the years, I’ve been a member of Ag Builders of Nebraska; Nebraska Cattlemen; Nebraska Farm Bureau; Christ Lutheran Church; St. Paul Library Foundation; and I’m serving as vice president of the KAAPA Co-op board.

The Nebraska Legislature's 60-day short session, which wrapped up this spring, operated somewhat smoother than last year's 90-day session. I don't think any senators wanted to go back and revisit the raucous 2023 session.

The main line budget bill is always passed in the long session, so only relatively minor adjustments had to be made this year —  the largest being a nearly $100 million increase in the TEEOSA school funding formula. That increase used nearly half of the new funds that would have been available for other uses, such as property tax relief.

Ag bills

A number of bills affecting agriculture were passed, including an increase in the corn checkoff from a half-cent to 1 cent per bushel. The checkoff program started in 1978 and has had several small increases over the years and had been the same since 2012.

Our corn markets have thrived with this farmer-driven and directed fund. The movement toward sustainable aircraft fuel (SAF) is on the horizon and both ethanol and soy oil will be major players in this new and exciting market.

LB 1368 establishes a nitrogen reduction incentive program. This new program will be overseen by the Department of Natural Resources and is designed to incentivize the reduction of nitrates by incorporating a qualifying product into the farmer's nutrient program.

There are several products that enhance the utilization of N by the plant. The program will provide an incentive of $10 per acre to farmers who verify a reduction of either 40 pounds per acre, or 15%, by incorporating those new products. There is a one-time $1 million transfer from the Water Resources Cash Fund and $100,000 in general funds in both fiscal 2024-25 and 2025-26.

LB 1301 was passed on behalf of Gov. Jim Pillen and provides for much greater scrutiny of foreign individuals or foreign-owned companies of Nebraska farmland. This was a very necessary step to ensure the safety and security of the U.S.

Nebraska is home to several large miliary installations, and they must be protected at all costs. Nebraska farmland is an excellent investment, but it must remain in the hands of American agriculturists. Our farmland is our nation's most valuable natural resource.

Lack of progress

A major disappointment was the failure to make progress on the crippling real estate tax problem in Nebraska. Nebraskans recently received their new valuations on real estate from their local county assessors. Once again, property owners will see a large increase varying by real estate class.

Homeowners are expected to see some of the largest increases ever. Ag land will be seeing modest increases on cropland and larger increases on grazing land. Projections point to a $1 million per day increase in real estate taxes this year. Yes, you read that correctly.

Such an increase is simply not sustainable nor healthy for the economy of Nebraska. Some state senators have stated that they simply will not support a shift to other taxes, such as reducing the number of sales tax exemptions. The reality is that the steady shift from other taxes to real estate has been happening for more than 20 years. A major re-balancing of our tax structure is long overdue.

Nebraska currently does not charge sales tax on any services and has a long list of exemptions that past legislatures have granted to special interests. Our neighboring states all have a much broader sales tax base and, in some cases, a lower sales tax rate. Most economists would say that is a much healthier tax climate. Pillen has indicated that he intends to call a special session to work on this issue. It will not be an easy task, but changes absolutely must be made.

In closing, we have seen over 10 inches of rain in the month of May at our farm. We are thankful for the lush pastures and great-looking crops after the past four years of very limited rainfall. The drought monitor map for Nebraska is looking much better, and for that, we give thanks.

Meyer is a Nebraska state senator and graduate of LEAD Class 14.

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