During my campaign for Legislature, a primary concern expressed by voters of District 38 was the overwhelming burden presented by property taxes. Nebraska’s farmers and ranchers have seen property taxes increase by 162 percent over the past decade, with businesses and homeowners seeing an increase of 40 percent. In fact, according to a 2011 NEDED study, property taxes levied on Nebraska’s agricultural land are greater than Kansas, Colorado, South Dakota, North Dakota, Wyoming and Montana combined.
I recognize the troubling tax environment and am committed to addressing the situation. It will not be an overnight fix. The increases in property taxes have been incremental over time, and solutions will take time to develop and implement. This session, there have been several bills proposed and referred to the Legislature’s Revenue Committee with the objective of reducing the tax burden across Nebraska.
Some of the highlights of the legislation introduced with the aim of reducing property taxes include:
LB 350, introduced by Sen. Lydia Brasch, and which I co-signed, reduces the assessed value of ag land from 75% to 65% for all tax purposes. LB 351, also introduced by Sen. Brasch, reestablishes the intended level of income tax funding to the state education aid formula.
LB 178, introduced by Sen. Dan Watermeier, would gradually reduce the valuation of agricultural land from 75 percent to 55 percent of its actual value for the sole purpose K-12 school district taxation.
LB 280, introduced by Sen. Al Davis, creates a local income tax tied to a reduction in property taxes, reduces agricultural land valuation from 75 percent to 65 percent for K-12 education funding, and establishes a per-pupil amount to go to every district to restore aid to the 159 school districts that have lost equalization funding.
LB 259, introduced by Sen. Mike Gloor, exempts the first $25,000 worth of personal property value for each personal property tax return.
In addition, a number of bills introduced include the transfer funds from the state’s “rainy day fund” into the Property Tax Credit Fund. These amounts vary from fifty million dollars to one hundred and fifty million dollars over the next two years.
As I keep an eye on the situation in the Revenue Committee and these ideas advance to the floor, my top priority is ensuring that we implement a long-term solution to the burden imposed by property taxes. I hope to avoid simply “kicking the can down the road”.
It may take longer than one year to achieve structural reform, but I look forward to working with my fellow colleagues to discuss and develop comprehensive reforms that will benefit the taxpayers of District 38 and all residents of Nebraska.
Senator John Kuehn, District 38