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During my campaign for Legislature, a primary concern expressed by voters of District 48 was the overwhelming burden presented by property taxes. According to an article printed on January 26 in the Omaha World Herald, 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.
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, reduces the assessed value of Ag land from 75 percent to 65 percent 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 of 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 186, introduced by Sen. Boltz, creates the Property Tax Circuit Breaker Act, and provides for a refundable income tax credit available to Nebraska residential property owners and renters based upon income. Under this plan, low income taxpayers get the most property tax relief. LB 186 is estimated to cost $206 million the first year and up to $215 million in three years.
Governor Ricketts weighed in on the discussions in his proposed budget. His top priority is an increase of $60 million per year in state finance direct property tax relief. This is a 43 percent increase. This addition results in $200 million in total property tax relief per year. The Governor also supports a reduction in the assessed valuation of ag land for taxation purposes from 75 percent of actual value to 65 percent of actual value. His budget allocates $9.5 million for the first year and anticipated increases by allocating $19 million and $30 million in the next two years. His tax relief credit depends on the amount of property tax paid. The more you pay, the bigger the credit on your property tax statement next year.
LB 633 is a bill that I introduced to address property tax relief. State government shares some of the blame for increasing property taxes and for cuts to local services. State aid was given to replace the personal property tax base lost to municipalities and counties by tax exemptions given by the State. The State did not keep its side of the bargain. In order to balance the State’s budget, aid to counties and cities has been reduced from $17.9 million in 1991 to $0 in 2010. The Municipal Infrastructure Redevelopment Fund was reduced for $4.5 million in 1989 to $0 in 2009. Both municipalities and county government had to either cut services or raise taxes to fund core services. In the meantime, the infrastructure in our cities and counties now desperately needs repair and replacement.
What LB 633 would do is appropriate $20 million per year to both municipalities and the counties to repair and replace infrastructure, such as roads and bridges. Without infrastructure we cannot expect to reduce property taxes or to develop the State’s economy. State aid is a way to shift from property taxes to the state’s tax base of sales and income taxes. I believe we must discuss this option in all fairness to municipalities and counties.
I need your help by providing your thoughts. What do you think of these options for property tax relief? My contact information is: Senator John Stinner, P.O. Box 94604, Lincoln, Nebraska 68509, Phone (402) 471-2802. My email address is firstname.lastname@example.org
I invite your participation and welcome your views.