As we enter September, harvest is just around the corner, fall sports have begun, and all our local taxing authorities are finalizing their annual budgets.

As discussed in previous articles, property taxes are assessed at the local level by local taxing authorities, who are represented by locally elected boards. As voters, you have the ability to attend meetings held by your taxing authorities and can decide who represents you on each board with your vote. Far too many voters fail to take advantage of the opportunity to better understand how each taxing authority operates and give their input regarding their spending proposals.

The property tax journey begins on January 1, which is the “as of” date for determining the value of your property for the current tax year. Once the values are confirmed, each property owner is notified of any changes in their property value. This, in turn, gives property owners the opportunity to protest the valuation, if they believe the value is incorrect. Once all of the property protests have been settled, the assessor can now determine the total property tax “base” for each taxing authority.

To be clear, every property is located inside certain taxing districts. If your property is within municipal limits, you are subject to city or village taxes. You also will pay taxes for your county, but your school district taxes will depend on where your property is located as well. Ultimately, your property tax is determined once all the taxing authorities where your property is located have finalized their budgets. The tax rate (mill levy) for that political subdivision is then determined by dividing their total budget needs into the total tax (value) base of the property within their taxing authority. The County Treasurer simply adds up all the mill levies for each taxing authority your property is located within and multiplies the total mill levy by the assessed value of your property to determine your property tax.

This past week, the city of North Platte met to develop its proposed budget. If it receives final approval, it will reduce its property tax request by $57,538, which will help reduce the total property tax bill for those with property located within the city limits of North Platte. Keep in mind that the actual property tax “value” of property within the city limits of North Platte increased by 8.6% year over year. So, as we have stated before, it is not the value of your property that determines your property tax, but instead, it is the combination of your property value and the mill levy that determines your property tax.

It is important to remember that strong sales tax revenues helped to reduce their property tax need, but growth in sales taxes has been possible because city leaders chose to support major new developments by backing important incentives necessary to make these developments possible.

It is also important to keep in mind that our local political subdivisions are dealing with the impact of inflation, just like every consumer and business. All employees expect annual raises and benefit costs to continue to rise, especially the cost of health insurance. At the same time, the cost of fuel, electricity, repairs, and materials are up as well. That is why it is important to remain focused on growing our tax bases. This has happened in North Platte as new construction continues to increase the size of the property tax base. Additionally, the sales tax base continues to increase sales tax collections. There is an old saying that says, “If you are not growing, you are shrinking.” This happens because you must grow your tax “base” to offset the annual growth in expenditures.

Although the school districts have the greatest impact on local property taxes, the city of North Platte’s proposed budget is a great start for those owning property in North Platte. I expect most of the villages within District 42 will see their school districts limit their tax asks due to the new funding coming from the Legislature through the “Foundation Aid” of $1,500/student and the higher state aid for special education funding. But, school districts have a very high number of employees compared to their total budget. This makes it more challenging to hold the line on total expenditures. Nonetheless, the new state aid will certainly help reduce the otherwise larger revenue needs. We will continue to watch as the budgets continue to be released.

Please continue to contact me on this and other issues at mjacobson@leg.ne.gov, or feel free to call my office 402-471-2729. My door is always open!