In the remaining days of the 2018 Nebraska legislative session, Gov. Pete Ricketts, along with several organizations representing Nebraska businesses, homeowners, farmers and ranchers, are asking for unified support of LB947, the Property Tax Cuts and Opportunities Act. Yesterday, the group held a press conference at the state capitol to show their support for LB947.

"LB947, the Nebraska Tax Cuts and Opportunity Act, is the vehicle that we can achieve tax relief this year. This bill delivers major property tax relief. Together, with the Property Tax Credit Relief Fund, this bill will deliver over $4.5 billion of tax relief over the next ten years, more than doubling the amount of property tax relief that is coming from the state this year," said Gov. Ricketts. "It also addresses issues with regard to our business income taxes and workforce development."

As originally introduced, the bill would have eliminated the state's current property tax credit program. However, LB947 was amended by the Revenue Committee to keep the Property Tax Credit Relief Fund at $224 million per year, and retain the Personal Property Tax Exemption. In addition, the bill creates a new refundable income tax credit, starting at 2% of property taxes paid on ag land and 1% on residential property starting in 2018, and growing until reaching 20%.

It also reduces the top corporate income tax rate to 6.84% over five years to match the top individual income tax rate, and dedicates $5 million each year to go toward workforce development funds starting in 2018.

The state's cash reserve fund would be used to pay for these changes for the first year.

Ricketts noted that property taxes are a serious burden on ag land owners in the state – especially with lower farm incomes in recent years.

"We know that farm income has been cut in half since 2013, and the USDA is predicting that farm income will go down again this year. We're the eleventh highest when it comes to property taxes. Our high property tax burden has made it difficult to sustain our family farms and ranches," Ricketts added. "We know we have to address that to continue to have a strong farm economy here in our state. And agriculture is our state's No. 1 industry. It's incredibly important we address property tax relief this year."

Sen. Jim Smith, chairman of the Revenue Committee who introduced LB947, noted the path forward for property tax relief narrow, but the passage of LB947 is a step in the right direction – and provides relief this year.

"LB947 remains the best and only option that provides substantial property tax relief, the best and only option that sends pro-growth signals to our business communities, and the best and only option that does all of this in a responsible and measured way," said Sen. Smith. "I appreciate the Revenue Committee voting to advance LB947 to the floor of the legislature, where we will have a robust conversation in the coming days about tax relief and how we grow our state's economy."

Steve Nelson, Nebraska Farm Bureau President, noted that while Farm Bureau and other ag organizations have supported a ballot initiative to provide property tax relief, Farm Bureau's preference has always been a legislative solution to property taxes. That ballot measure, which would provide an income tax credit equal to 50% of the local school property taxes paid. If enough signatures are gathered by July, the measure will appear on the November ballot.

However, now is the time to act on property tax relief, Nelson said in support of LB947.

"Signatures are being gathered as we speak on a property tax ballot measure, because property tax relief has not happened. It's a ballot measure that Nebraska Farm Bureau has and continues to support," said Nelson. "With that said, I can tell you that if LB947, as amended by the committee, is signed into law, we have indicated to Gov. Ricketts that Nebraska Farm Bureau will divert its resources from the ballot measure and fully invest those resources to work with him, the legislature, the chambers of commerce, the education community, and others to address the way we fund public schools, and the ways those funds are spent."

If the bill is passed, Ricketts added, it will allow groups to focus on other property tax-related issues – like school equalization aid and property valuations. "We will be able to set aside the ballot initiative, and focus on some of the things that were talked about here with regard to, for example looking at our evaluations on ag land, looking at how do we do school aid reform," Ricketts said. "All of these things are also big issues that require a lot of work and working together."