This week I want to continue my explanation of LB 34 and what it means to you as a property tax payer. Three lawmakers, Sen. Steve Halloran (LD33), Sen. Justin Wayne (LD13), and myself did a press release last week, alerting members of the public to the fact that taxpayers will not be able to claim their property tax credit for their 2023 property taxes paid. That press release got the attention of the members of the Legislature’s Revenue Committee and the Nebraska Department of Revenue, who are now trying to protect the State’s so-called money. Therefore, I will explain exactly what LB34 will do to taxpayers who paid their property taxes for 2023 in the calendar year of 2024.

To start, let’s assume for the moment that your tax credit for the property taxes you paid in 2023 amounts to $1000. In that case, the property tax credit that you would ordinarily claim on your 2024 income tax return would be $1,000. Because you would file that income tax return at the end of the two-year cycle, which occurs in the year 2025, you then should be eligible to receive a total credit of $2000 – That is, $1,000 for your 2023 taxes and another $1000 for your 2024 taxes.

So, what’s the problem? After the passage of LB 34, you will no longer be able to collect the $1000 credit for your 2023 property taxes. Instead, you will now get a $1000 credit that you won’t have to file to collect on your income taxes for your 2024 property taxes. After the two-year property tax cycle, under LB 34, you will have received only a $1000 total credit. You will never see the $1,000 credit owed to you for your 2023 property taxes. It’s now gone. It has disappeared into thin air.

The language of LB 34 means that you have forever lost the opportunity to collect the credit of $1000 owed to you for your 2023 property taxes. Therefore, you have personally funded your own property tax relief for 2024 with the credit you should have received for your 2023 property taxes.

The Governor’s Office, the Nebraska Department of Revenue, and the Legislature’s Revenue Committee want you to believe that you are being held harmless because you will be receiving a $1000 credit frontloaded for your 24 taxes, but nothing could be further from the truth. As you see from this example, you have lost the $1,000 that you should have received for your 2023 property taxes. In other words, this is a retroactive property tax increase for the property taxes you paid for 2023.

It is now known that the members of the Legislature’s Revenue Committee, the Legislature’s Budget Office, and several other State Senators knew this before the vote was ever taken on LB 34. They knew beforehand that the bill was going to remove your opportunity to collect your credit for your 2023 property taxes. Now they are spending a significant amount of time trying to convince you that you did not lose anything simply because you will receive a nice credit on your 24 property taxes. it is quite obvious now that the old saying rings true that “Figures don’t lie, but liars figure.”

Over the past four years, those who have been eligible to claim their property tax credit but who never did so, constitute a significant percentage of the population of the state. 45 percent of the money that was appropriated for the credit was never claimed because, for whatever reason, those taxpayers never filed the necessary paperwork to get the credit. That total amount is just over $700 million. If those people would have filed for the credit, the state would’ve had to give away that $700 million in the form of credits to those taxpayers, so the State’s revenue has increased over the last four years by $700 million because those people never claimed their credits. So, the question now must be asked: Who does the money belong to? You guessed it. It’s the people’s money. The State of Nebraska does not really have any money, because everything it has comes from the taxpayer.

Another issue that LB 34 has created for those who pay quarterly estimates on their income taxes is that they may find themselves short.  This is so because they have been paying their estimates considering the reduction by the credits of the property taxes that went to the schools in the past years.  The good news is that the Revenue Department said they will not fine people for under-funding their payments.

Please contact the Governor’s Office and your State Senator and tell them that they must fix this issue before we all file our income taxes next spring.