Nebraska farm and ranch families seeking relief from a property tax burden that has skyrocketed over the last decade and left agriculture landowners to shoulder a disproportionate share of the property tax burden statewide, would find relief under a series of legislative bills the Nebraska Farm Bureau Federation believes should serve as the foundation for property tax relief efforts in the 2015 Legislative session.
“The pieces necessary to provide a foundation for meaningful property tax relief have been introduced for consideration in the Legislature and we are very appreciative of those who have introduced those bills and of others who have brought ideas to the table,” said Nebraska Farm Bureau President Steve Nelson, Jan. 20.
Nebraska farmers and ranchers account for less than three percent of the state’s population but now pay nearly 30 percent of the total property taxes collected statewide, a trend that began in 2008 when taxes collected on agricultural land began to climb at an accelerated rate in comparison to commercial and residential sectors. During that same time not only did farmers’ and ranchers’ share of property tax responsibilities grow, the amount of property taxes collected reached unprecedented levels. Nebraska farm and ranch families now pay the third highest property taxes in the country. Only agriculture land owners in California and Texas pay more in property taxes.
“We know there are a lot of ideas out there about how to tackle the property tax issue. The bills we are backing address several issues. Among them is the inequity in the property tax system as it relates to Nebraska farm and ranch families. It also reflect opportunities to provide immediate tax relief, but also start down the path of providing long-term property tax reform by limiting property tax growth and starting the process of addressing how we fund schools, the largest user of property taxes. We believe the combination of approaches in these bills would provide relief to farmers, ranchers and all Nebraskans seeking property tax relief,” said Nelson.
The bills Farm Bureau believes should serve as the foundation for tax relief include:
LB 178 – Introduced by Sen. Dan Watermeier of Syracuse, the bill reduces the level of taxable value for agricultural land for school taxation purposes. The measure would lower the taxable value from 75 percent of market to 55 percent of market over a four year period, with similar adjustments being made in the calculation of state aid to schools.
LB 350 – Introduced by Sen. Lydia Brasch of Bancroft, the bill would reduce the value of agricultural land from 75 percent of market value to 65 percent of value for taxation purposes.
LB 351 – Introduced by Sen. Lydia Brasch of Bancroft, the bill would send 20 percent of the state income taxes collected in a local school district, back to the district for school funding purposes. Current state law calls for 12 percent of income taxes collected locally to be returned to the district. The bill also removes the minimum levy penalty in the state aid to schools formula that penalizes districts for having lower tax levies.
LB 364 – Introduced by Sen. Dan Watermeier of Syracuse, the bill would allocate an additional $60 million per year for the next two years to the state’s Property Tax Credit Program. The program provides direct relief to all Nebraskans who pay property taxes.
“Property taxes are the number one issue I hear about from constituents. Putting more dollars into the Property Tax Credit Program will provide immediate and direct relief to individuals in my district and individuals statewide. The additional $60 million dollars for the Property Tax Credit Program would not only reduce the overall collection of property taxes, but provide nearly $50 million in property tax savings for farm and ranch families through the Property Tax Credit Program,” said Sen. Dan Watermeier.
“Lowering the value of agricultural land from 75 percent of value to 65 percent of value for tax purposes will provide direct relief to our agriculture families and do so in a uniform manner. In addition, the concept of returning a greater percent of income taxes to local schools would ensure all schools receives some form of state funding assistance. That’s an issue that has been a concern for schools that receive no equalization aid and for tax payers in those districts,” said Sen. Lydia Brasch.
Nebraska Farm Bureau president Nelson said the organization looks forward to further working with members of the Legislature and the Governor to discuss the merits of the ideas contained in these proposals.
“We are confident the Legislature understands the need for property tax relief and it is imperative we work collectively to make that happen. We believe the core of these bills present a path to move forward to address the property tax issue,” said Nelson.
The Nebraska Farm Bureau Federation is a grassroots, state-wide organization dedicated to supporting farm and ranch families and working for the benefit of all Nebraskans through a wide variety of educational, service and advocacy efforts. More than 59,000 families across Nebraska are Farm Bureau members, working together to achieve rural and urban prosperity as agriculture is a key fuel to Nebraska’s economy. For more information about Nebraska Farm Bureau and agriculture, visit nefb.org.