Some of you may have received a “Pink Postcard” in the mail. This is a signal that one or more of the political subdivisions that assess a tax against your property will be requesting a property tax revenue increase that exceeds the state’s allowable growth limit compared to the previous year. Naturally, this has renewed the public outcry about the cost of property taxes. Although the state has taken steps to reduce the “net” taxes you owe, property taxes continue to rise.

The purpose behind the pink notices is to let you know when public hearings will be held to discuss the upcoming budget and taxing process when the tax increase will pass a certain threshold. If you are concerned about a tax ask, now is the time to say something! I can’t speak for all elected officials, but I can tell you that I care about what my constituents think, and most others will as well. Local control requires local engagement by both the public and the elected officials. It is up to you to help guide priorities.

Even if you don’t want to say anything, these meetings can be a good way to understand why the political subdivision’s tax asking is going up. Just like with everyday consumers, the cost of operating is increasing, and there may be a special project that is being undertaken. But shining a light on a budget and asking tough questions is important to ensure conservative spending.

Keep in mind that the increase in property taxes is not due to your property “value” rising. The mill levy is set based on the available taxable property, and that is what really determines what you pay. Your taxes are calculated with the equation A = B x C. A is the amount requested, B is the tax levy, and C is the tax value. If the tax ask increases (A) and the tax value goes up (C), then the tax levy (B) is adjusted to generate enough funding to meet the tax ask (A). If the tax base (C) goes down and the tax ask (A) goes up, the tax levy (B) must go up to balance the equation. In the end, it is the tax ask (A) that impacts your tax liability.

Also keep in mind that if your individual property value went up due to inflation, then your neighbors’ values went up as well. If the tax ask (A) holds steady and the tax value (C) goes up, then the tax levy (B) will be reduced. When politicians tell you they left the levy flat when values went up significantly, that is a sign spending is going up.

Political subdivisions should not be setting their budgets until after public hearings, including those noticed on the Pink Postcard. Even then, this will not be the full picture of your property taxes for the upcoming year. The state now fully funds community colleges, taking over the local property tax assessment. We have also made significant investments in property tax credits that will further reduce your bill. The credit related to K-12 public school funding has increased by $750 million for each of the last three years. This is in addition to providing $1,500 per student to each public school in the form of “foundation aid.” The state also provides over $1.2 billion per year in TEEOSA funding to schools with higher needs and lower tax bases.

In addition to carefully managing spending, we also need to grow our property tax base. This means building more houses, attracting more businesses, improving properties, and recruiting more individuals to our communities. Even when incentives like TIF are used to make this happen, the base eventually is increased. Many projects that were TIF-ed several years ago are now fully on the property tax rolls. Had they not been incentivized, they may never have been built, and the sales taxes and income taxes created by new jobs would never have happened. We need to grow if we want to stay ahead of inflation pressures.

It is a privilege to represent you in the Nebraska Legislature, and I look forward to hearing from you regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mike.jacobson@leg.ne.gov.