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I hope everyone is enjoying this Christmas Season and is well on their way to completing all their holiday preparations. As we get closer to the start of the 2019 session we are starting to hear more again about changing the way we value agricultural real estate for taxation purposes. Some people have begun touting switching from a “recent sales” valuation based system to an “income potential” valuation based system. The main reason it is being promoted is the belief that it will deliver property tax relief to the owners of farm and ranch land. I disagree.
Changing how we determine the value will not reduce the number of tax dollars owed, especially if you live in an unequalized school district. Property tax relief, to me, is reducing the amount of property tax dollars being paid. In my recent travels across the 44th District and talking to citizens, I am hearing that land values are beginning to come down from the highs of a couple of years ago. Low commodity prices and increases in interest rates are both significant factors in this trend. While this trend will eventually reduce the tax burden on agriculture real estate it will not be providing relief quickly enough for some of our producers. If we are going to provide property tax relief it must be for everyone.
Residential, commercial, and agricultural taxpayers need to see substantial reductions in their tax bills. If we are going to achieve this we are going to have to raise revenue from other sources. I think we should be looking at removing some sales tax exemptions. Some people are not a fan of raising one tax to pay for another, but we are already doing that with the Property Tax Relief Fund. Those dollars are sales and income tax dollars collected by the state and distributed back to the counties to reduce property taxes.
Our current system of funding our schools is out of whack and needs to be addressed. If the value of everyone’s home had quadrupled and the subsequent explosion in property taxes being collected under our current law would have taken place, we would not be having this discussion because it would already have been taken care of. The sentiment of, if you don’t like paying the taxes, you can always sell it, takes on a little different hue under that scenario.
In my mind, our government should not be picking winners and losers. We should be trying to level the playing field so one group doesn’t have an unfair advantage or suffer a significant disadvantage compared to another. There are lots of ideas being discussed among my colleagues and myself about how to deliver property tax relief, but more importantly how to pay for it. There will be a big change in the membership of the Revenue Committee in the Legislature this coming January and I am hopeful the new members of that committee will heed the call from everyone across Nebraska that WE NEED PROPERTY TAX RELIEF NOW!