Tag Archives: Property Taxes

LINCOLN, NEB. – A legislative proposal to make fundamental changes in the way Nebraska funds K-12 schools and in the process deliver an estimated $500 million in property tax relief has earned the support of several Nebraska agriculture organizations. The groups announced their support leading into first round legislative debate on LB 289, a bill advanced by the Legislature’s Revenue Committee.


“LB 289 provides much needed fundamental reforms to help break the cycle of overreliance on property taxes for funding K-12 education,” said Steve Nelson, Nebraska Farm Bureau president. “This is no property tax band-aid. We’re talking about major tax and education funding reform, the likes of which we have not seen from the Legislature in a long, long time.”


The groups’ support for the bill is founded in the fact it addresses two major issues, specifically the state’s overreliance on property taxes for funding K-12 education and the state’s failure to provide funding to help cover education costs for all K-12 students.


“Today the state picks up the majority education funding costs for students in some school districts, while doing little to nothing to help cover the costs of education for others. The state clearly has a responsibility to help all our students no matter where they live, or the school they attend. LB 289 would help achieve that,” said Robert Johnston, Nebraska Soybean Association president.


LB 289 would address student funding inequities by establishing per-student Foundation aid for every school in the state. In addition, the bill would establish a minimum aid guarantee to ensure one-third of an individual school’s needs are covered by the state.


The bill tackles the overreliance on property taxes to fund schools by replacing those dollars with new sources of revenue, including elimination of numerous service-based sales tax exemptions, increasing state’s sales tax rate, increasing cigarette taxes, and eliminating the state’s personal property tax exemption among other items.


“Nebraska’s three-legged tax stool of property, sales, and income taxes has long been out of balance with property taxes being a major contributor to funding state priorities. LB 289 will help better balance our tax system by increase the sales tax contribution, while offsetting reductions in property taxes used for school funding,” said Dan Nerud, Nebraska Corn Growers Association president.


When fully implemented, LB 289 would lower Nebraskans property tax bills anywhere between seven to 20 percent, with Nebraskans seeing reductions in taxes paid for schools in the range of 15 to 40 percent, depending on the school district where their property is located.


“LB 289 puts Nebraska on the right track for funding our schools and in the process delivers significant property tax relief for all Nebraskans. This is not the state’s largest tax increase as the Governor and others have suggested, but rather, this bill reflects one of the largest property tax reductions in our state’s history,” said Tim Chancellor, Nebraska Pork Producers Association president.


To help ensure the new revenues generated under the bill translate into property tax relief, LB 289 contains measures to slow growth in school spending by limiting growth in schools’ budget authority to the Consumer Price Index or between 0 – 2.5 percent. In addition to limiting school spending, there are several other benefits associated with the bill, including the timeframe in which property tax relief is delivered.


“LB 289 would start providing property tax relief in fiscal year 2019-20. This isn’t a drawn-out phase-in of relief. The property tax relief in this bill would start immediately and with the key structural changes, continue to deliver relief every year thereafter,” said Mike Guenther, Nebraska State Dairy Association vice-president.


According to the groups, the bill also provides a solution to the issue of runaway property tax bills when land valuations climb. Much like they did in the recent past on agricultural land valuation increases.


“By the state taking on responsibility for covering one-third of a school districts funding needs, LB 289 is helping prevent jumps in property valuations from instantly translating into massive increases in property taxes on property owners, regardless if it is residential, commercial, or agricultural property,” said Mark Spurgin, Nebraska Wheat Growers Association president.


According the organizations, the choice facing Nebraska lawmakers is very clear.


“This bill will deliver the much-needed school funding reform and tax relief that Nebraskans have been asking for. You’d be hard pressed to find a state senator who hasn’t said property taxes are the number one issue they hear about from constituents. All our groups agree that the time to fix these issues is now and the solution is before the Legislature. From our perspective, a “YES” vote for LB 289 is a vote for property tax relief and a vote in support of Nebraska property taxpayers. A “NO” vote on LB 289 is nothing short of a vote against Nebraska’s property taxpayers,” said Steve Nelson.

LINCOLN, NEB. – Elected leaders of Nebraska’s agricultural organizations thanked members of the Legislature’s Revenue, Education, and Retirement Committees for their efforts to find a solution to high property taxes in Nebraska, but urged lawmakers to avoid repurposing dollars from the state’s Property Tax Credit Fund as a means to fund the Revenue Committee’s new property tax relief proposal. The request was made in testimony during an April 24 hearing on an amendment to the Revenue Committee’s LB 289.


Ken Herz, a rancher from Lawrence, provided testimony on behalf of the Agriculture Leaders Working Group representing the member-elected leaders from the Nebraska Cattlemen, Nebraska Corn Growers Association, Nebraska Farm Bureau, Nebraska Pork Producers Association, Nebraska Soybean Association, Nebraska State Dairy Association, and Nebraska Wheat Growers Association.


The Property Tax Credit Fund is a state fund that provides $224 million in property tax relief to Nebraska taxpayers on an annual basis. The amendment to LB 289 would take the $224 million from the Property Tax Credit Fund and use it to help pay for a new Revenue Committee proposal estimated to provide an additional $412 million in property tax relief above and beyond the $224 million delivered through the Property Tax Credit Fund.  The Revenue Committee’s amendment to LB 289 would lower valuations for commercial, residential, and agricultural lands, provide foundation aid to schools, provide for a minimum state aid guarantee based on a school’s needs in the state aid formula, and lower the local effort rate for schools, among other provisions.


In urging the committees to leave the Property Tax Credit Fund intact, the Agriculture Leaders asked the committees to look at alternative ways to fund the Revenue Committee’s new property tax relief proposal, noting the amendment already included provisions to increase the state’s sales tax rate and to broaden the state’s sales tax base by eliminating sales tax exemptions.


The Agriculture Leaders continues to offer support for both increasing the state sales tax rate and broadening the sales tax base as a way to offset property tax reductions and provide a means for the state to take on greater financial responsibility for providing state funding to all of Nebraska’s K-12 schools.