The content of these pages is developed and maintained by, and is the sole responsibility of, the individual senator's office and may not reflect the views of the Nebraska Legislature. Questions and comments about the content should be directed to the senator's office at firstname.lastname@example.org
The Legislature gave first-round approval to both bills introduced on behalf of Governor Ricketts, containing his plan for property tax relief. However, the bills have been completely rewritten through the amendment process.
LB 959, as amended by committee amendments, eliminates the minimum levy penalty which reduces state aid to districts with levies less than .95 cents, removes the levy criteria from the averaging adjustment calculation, and caps the special levy school districts can use to address health, safety and accessibility problems in school buildings at 3 cents, down from 5.2 cents. LB 959 will allow a number of school districts to reduce their levy and will also provide more state aid to some districts that depend heavily on property taxes to fund their schools.
LB 958, as introduced, would have affected local governments by placing limitations on the budget of restricted funds and reducing the number of exclusions to the property tax levy limit. It also would have limited the state-wide increase in agricultural land valuations to 3 percent. Following the public hearing, when the committee heard significant opposition from representatives of cities and other political subdivisions, LB 958 was advanced from the Revenue Committee with committee amendments that rewrote the bill. Although a portion of the original bill remained in the committee amendments, pertaining to the unused restricted funds authority for community colleges, the sponsor of the bill has filed an amendment to strike this portion during the second round of debate, as he doesn’t want it to hinder the passage of the bill.
Under the committee amendments, LB 958 proposed a $30 million increase in the Property Tax Credit program, targeted for agricultural landowners. This would be accomplished by valuing agricultural land for purposes of the Property Tax Credit program at full market value rather than 75% of market value. With the additional funding, on top of the $204 million already appropriated for the program, the credit for agricultural landowners would result in an approximate 10% reduction in property taxes.
During debate on LB 958, urban senators felt that all taxpayers should receive tax relief, not just rural landowners, and an amendment was offered to strike the provisions of the bill, replacing it with an income tax reduction. Following several hours of contentious debate, a compromise amendment was offered to reduce the additional funding for rural landowners through the Property Tax Credit program to approximately $20 million annually. I was disappointed that we had to compromise in order to get LB 958 advanced. Considering that property taxes collected statewide on agricultural land increased 176% over the last 10 years, compared with a 35% increase in residential property and a 49% increase in commercial property, it was obvious that agricultural landowners deserved some immediate relief. However, the Legislature must continue to work to provide significant relief for all taxpayers.
LB 1032, is Nebraska’s fourth attempt at expanding Medicaid, as part of the federal Affordable Care Act. After about an hour of debate, a motion was offered to bracket the bill until April 20, which is the last day of session. The motion was successful, meaning that the bill is essentially killed for this session.
The Health and Human Services Committee amendments to LB 1032 proposed to add a sunset date in three years. The amendments also proposed to appropriate $63 million from the Health Care Cash Fund to fund the state match for the coverage of the newly eligible.
In addition to the sunset, LB 1032 also states that if the federal share falls below 90%, the coverage for newly eligible individuals shall terminate. Although the intent of the bill is to ensure no appeals to the loss of eligibility if the program terminates, this could be problematic. Federal law classifies the new Medicaid expansion population as a “mandatory population” for states that opt into the expansion.
Furthermore, senators questioned whether the source of funding was sustainable. When federal reimbursement falls to 90% in 2020, the projected cost to the state for the expanded population would be approximately $58 million annually. Although the Health Care Cash fund has a positive balance currently, it only brings in approximately $59 million annually and is used to fund many other programs as well, such as tobacco-cessation programs, biomedical research, and behavior health and substance abuse services. Senators sympathized with those who fall in the gap, making too much to qualify for Medicaid, but not enough to be eligible for subsidies. However, the majority feared that the program could end up costing more than our state could afford, thereby requiring cuts in other essential programs and services.
With just a few days left in this legislative session, I still encourage you to contact me with your opinion on issues before us. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is email@example.com and my telephone number is (402) 471-2733.
The Legislature gave first-round approval to the budget package this past week. Senators also stopped a measure that proposed to repeal the motorcycle helmet law for riders 21 years of age and older.
Progress has been made this past week on property tax relief, although it isn’t as comprehensive as hoped. LB 958, introduced on behalf of the Governor, sought to slow the increase in agricultural land valuation by capping statewide agricultural land valuation growth at 3% per year. It also aimed to slow the growth of property taxes levied by political subdivisions. After significant opposition was encountered from representatives of cities and other political subdivisions, the committee eliminated most of the bill, except for the portion that limits the unused restricted fund authority for community colleges to 3% of their prior year’s restricted funds. In the amendment proposed by the Revenue Committee, instead of the 3% cap on valuation, the committee is proposing an increase in the Property Tax Credit program. This program provides direct property tax relief for property owners through a credit on their property tax statement. Last year, funding for this program was increased by $64 million to $204 million in annual funding. This year, the proposed increase in credits would be directed to agricultural land owners. Since this is a new concept, the Revenue Committee will hold a public hearing on the proposed amendment on Thursday, March 24. After calculations are completed, an amount of funding will be added to the amendment.
A companion bill, LB 959, also introduced on behalf of the Governor, intended to slow the growth of spending and property taxes levied by school districts. It was advanced from the Education Committee, after being substantially amended. The bill now proposes to eliminate the minimum levy adjustment, which takes away state funding from schools with levies below $0.95. Additionally, it would tighten limits on a special project fund that schools use to address safety, environmental hazards, accessibility barriers and mold in existing buildings.
Two other bills promising property tax relief encountered roadblocks this past week. LB 717, introduced by Senator Mike Groene, proposed to use a 5-year history of comparable sales, excluding 20% of sales with the lowest valuation to sale price ratio, in an effort to remove abnormal high priced sales. It also would have frozen 2016 valuations at the 2015 level. An attorney general’s opinion stated that the bill is likely unconstitutional as it would appear to result in property within the same class being assessed at values that are not uniform and proportionate relative to their market value.
LB 883, introduced by Senator Jim Scheer and eleven other senators, including myself, was killed by the Education Committee. This legislation proposed to add a per student foundation aid component to the K-12 school funding formula, in an effort to reduce property taxes by giving every school district some base funding through the state aid formula. Currently, almost two-thirds of our school districts don’t receive equalization aid because their resources from property taxes exceed their needs, which illustrates the high dependence on property taxes in our school funding formula. This concept would require additional revenue to implement and I feel that this is a discussion that needs to take place.
According to calculations made by Senator Scheer’s office, under LB 883, schools in District #1 would have seen substantial increases in state aid. Following is the projected amount of additional state aid that schools would receive over the current amount, with the addition of $3,000 per student in foundation aid. Sterling Public Schools – $587,467; Johnson County Central Public Schools – $1,515,000; Johnson-Brock Public Schools – $389,596; Auburn Public Schools – $198,681; Syracuse-Dunbar-Avoca Schools – $2,123,988; Nebraska City Public Schools – $580,394; Palmyra District OR 1 – $1,135,510; Pawnee City Public Schools – $306,458; Lewiston Consolidated Schools – $37,773; Falls City Public Schools – $2,455,119; and HTRS Public Schools – $1,029,000.
Property taxes bear a disproportionate burden in support of our school districts, especially in our rural areas. I believe the concept of foundation aid has merit and I am hopeful that it plays a major role in the Legislature’s continued discussion of property tax relief this year and in following years.
As we begin late night sessions, I encourage your input on legislation of interest to you. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.