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[Author: Mark Othmer, Nebraska Field Director, 03.2017 | Keywords: Nebraska Field Notes, Property Taxes, Taxes]

Those of you who have been lucky enough to attend one of our Summer Legislative Meetings have heard me talk about property taxes. Often, I stress the importance of keeping local taxes and state taxes straight and understanding which entity is responsible for imposing both. 

Nebraska’s state government has not levied a property tax since 1967 when voters (in 1966) approved a ballot initiative prohibiting the state from levying and collecting property taxes. That initiative 50 years ago was carried out in the name of “property tax relief.” Over the decades that followed, the legislature tried several times to shift the tax burden in hopes of lowering local property taxes. To date, no tax shift devised by state lawmakers has worked as intended. Mark Chart

Nebraska currently has the nation’s 13th highest property taxes, according to the Census Bureau. There are more than 30 types of political subdivisions in Nebraska and many of them levy property taxes. Taxes paid to school districts comprise 60% of the average property tax bill imposed by Nebraska’s local entities.

Several property tax relief bills have been introduced in the current legislative session with hearings already held before the Revenue Committee for most. Hearings on these bills have become all too predictable, with large farm organizations and individuals testifying that high property taxes have caused them to lose money and possibly go out of business. Some of these same individuals have testified on these types of bills for several years, so their story of going broke is beginning to lose its credibility.

This is not to say that property taxes aren’t a detrimental force to profitable agriculture in Nebraska. They are. But finding a real solution remains elusive and will continue to be as long as so few land owners are pitted against a more populated city and town electorate. In some school districts where uncontrolled spending is a problem, landowners typically don’t have enough votes to bring spending under control.

The problem will never be solved when a landowner, who is most likely paying tens of thousands of dollars in property taxes, has the same voice as a homeowner who only pays thousands of dollars in property taxes. That is why several of the remedies attempted to decrease the value taxed on ag farmland by various percentages (such as 25%). However as the chart shows, ag land would have to be valued at only 10% of the market to make it an even playing field. That is unlikely to ever happen.

The only thing all sides agree on is that everyone wants excellent schools in Nebraska and we all feel we have achieved that goal. The concern is if everyone is paying their share of the cost (or if not), how would the playing field be leveled? This discussion will continue, but an easy solution is not on the immediate horizon.

 


About the Author

Mark Othmer

For nearly 20 years, Mark has traveled across Nebraska calling on members. A “regular” at the State Capitol, Mark keeps his finger on the pulse of legislative issues affecting members. When he’s not driving across Nebraska, Mark can be found golfing, cheering on the Nebraska Cornhuskers and spending lazy afternoons at the family farm.