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Another year, another legislative session; will this be the year Nebraskans get some form of relief?

Tyler Harris, Editor

January 30, 2019

3 Min Read
corn field
PERENNIAL PROBLEM: While property taxes have been an issue for Nebraska farmers, ranchers and landowners for years, passing legislation providing property tax relief has been a challenge over the past few years.

As I'm writing this in late January, this year's unicameral legislative session kicked off only a few weeks ago. It's a longer, 90-day session this year, and there have been several bills introduced to help address Nebraska's ongoing issue of property tax relief.

This includes LB314 introduced by Sen. Tom Briese, which would adopt the Remote Seller Sales Tax Collection Act and also would add $468 million to the Property Tax Credit Fund — bringing the direct property tax relief fund total to $692 million; LB662, sponsored by Sen. Curt Friesen, which would terminate the Tax Equity and Educational Opportunities Support Act (over time, changes to the TEEOSA formula have led to less state aid going to public schools, leaving property tax payers to shoulder more of the burden); and LB483, sponsored by Sen. Steve Erdman, which would change Nebraska's land valuation system to one that is income-based.

It goes without saying that property taxes are a perennial issue for Nebraska and have been since at least the 1930s — see related article: Property taxes on the mind of state legislators in 1935. It is said that Nebraska farmers pay anywhere from $80 to $120 per acre in property taxes, and Nebraska consistently ranks among the top-10 states for highest property taxes. However, passing legislation providing property tax relief has been a challenge over the past few years.

Last year, several bills that would have provided new revenue for school funding, and that would have established a refundable income tax credit were introduced, but none received the 33 votes needed to break a filibuster. Most were postponed indefinitely and never made it to the governor's desk for approval. Critics argued these proposals didn't provide enough relief.

After no property tax relief was provided through legislation, the Yes to Property Tax Relief Committee collected signatures for a ballot initiative to provide $1 billion in property tax relief by creating a 50% refundable income tax credit for property taxes paid for K-12 education. However, last spring, the group announced it was abandoning its petition drive and would focus on another avenue for property tax relief.

This year, several proposals have been introduced, including Gov. Pete Ricketts' own proposals, which would establish a statutory floor of $275 million for the Property Tax Credit Relief Fund, establish a 3% cap on property tax increases by local governments, and provide $51 million in new property tax relief through the Property Tax Credit Relief Fund.

Ricketts has voiced his opposition to LB314 and the Remote Seller Sales Tax Collection Act, stating he would not raise any taxes to provide property tax relief, and has indicated that meaningful property tax relief packages would need the support of both urban and rural senators — something he said is not likely to happen.

Meanwhile, critics of Ricketts' proposals have argued that they don't provide enough tax relief soon enough, and farmers and ag organizations alike have called for a more balanced three-legged stool of property, income and sales tax.

Of course, by the time this article sees print, one of these proposals may have been signed, and others may have been killed on the floor. Time will tell if any bill providing property tax relief is passed this session.

While it's fair to say that fixing the property tax issue in the long run will take a big-picture approach by either creating new revenue or increasing taxes on income or sales, it's also true that some relief is better than no relief. We must start somewhere, even if it is a small step forward.

About the Author(s)

Tyler Harris

Editor, Wallaces Farmer

Tyler Harris is the editor for Wallaces Farmer. He started at Farm Progress as a field editor, covering Missouri, Kansas and Iowa. Before joining Farm Progress, Tyler got his feet wet covering agriculture and rural issues while attending the University of Iowa, taking any chance he could to get outside the city limits and get on to the farm. This included working for Kalona News, south of Iowa City in the town of Kalona, followed by an internship at Wallaces Farmer in Des Moines after graduation.

Coming from a farm family in southwest Iowa, Tyler is largely interested in how issues impact people at the producer level. True to the reason he started reporting, he loves getting out of town and meeting with producers on the farm, which also gives him a firsthand look at how agriculture and urban interact.

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