A Big Deal for Nebraska
By Governor Pete Ricketts
August 25, 2020
Governor’s official photo here.
As Governor, property tax relief has been my number one priority. Every year, I’ve worked with State Senators to increase the amount of state relief from local property taxes. From 2015-2019, we nearly doubled the amount of direct property tax relief from $140 million annually to $275 million annually. This relief helps pay your annual property tax bill. It is applied directly to your property tax bill, and appears as a credit on your statement. I have also proposed many other ideas about how to make structural changes to Nebraska’s property tax system over the years.
Last week, we celebrated a giant step forward in delivering substantial property tax relief. In the final days of the recent legislative session, senators voted to approve LB 1107, which incorporates some of the property tax relief measures I’ve advocated over the years. This bill not only delivers significant property tax relief to Nebraskans, but also reforms our business incentives and puts Nebraska in the running for a $1 billion federal investment in the University of Nebraska Medical Center (UNMC). LB 1107 is a big deal for our state. Getting the bill to the finish line was a generational accomplishment that will grow Nebraska for years to come.
Property tax relief is LB 1107’s biggest priority by far, which is a good thing for our farmers, ranchers, and working families. From historic flooding to the ongoing pandemic, Nebraskans have encountered unprecedented challenges over the last 18 months.
The bill delivers property tax relief in two forms. One, it puts into law a minimum level of funding of $275 million annually for the existing Property Tax Credit Relief Fund. This is the same relief mentioned above that is applied directly to your property tax bill. This measure will ensure that this level of relief continues into the future.
Second, it creates a new refundable income tax credit based on your property taxes paid to schools. Once the tax credit is phased in, the state will provide an additional $375 million in property tax relief. The relief from this credit will be delivered to you when you file your state income tax return. After the credit is phased in, the amount of credit from the state will grow as property valuations grow.
What will this relief mean for you? In Lancaster County, a home valued at $201,584 with a property tax bill of $3,395 will experience a 17% overall reduction in its property tax bill. A 980-acre farm in Hamilton County will see $14,179 of property tax relief for a 21% reduction on its property tax bill. These scenarios are based on property tax data available to us today.
Under these property tax relief programs, the state will deliver a total of $650 million in annual property tax relief. This is more than a four-fold increase in relief since I took office. And relief will continue to grow in the coming years. LB 1107 contains an escalator that grows the property tax relief as property valuations go up, helping to ensure that relief from the state continues to make a difference on your property tax bill.
In addition to property tax relief, LB 1107 also makes important reforms to the state’s business tax incentive program. Reforming and renewing our tax incentives keeps Nebraska economically competitive. Unlike other state incentive programs, Nebraska’s tax incentives are performance-based. Tax benefits aren’t given in the hopes of future investment. They’re only earned by businesses that have already created verifiable jobs in the Cornhusker State. This feature ensures that incentives reward actual job creation in Nebraska. Action by Senators ensures that Nebraska will continue to have this important tool to help recruit great jobs to communities across our state.
Finally, LB 1107 supports Nebraska’s bid for a major project at UNMC in Omaha. Due to coronavirus, Nebraskans are more familiar than ever with the great work done at UNMC. UNMC is in the running for a huge federal investment in an academic medical facility that would put UNMC at the forefront of the United States’ strategic response to future pandemics and other public health hazards. Additionally, the project has the potential to create 8,700 great-paying jobs.
The significance of LB 1107 cannot be overstated. This is a major win for Nebraskans and the communities we live in across the state. And it wouldn’t have happened without the commitment of so many everyday people who have been coming to the Capitol, writing their Senators, and asking for property tax relief for years. I want to extend a major thank you to the citizens of Nebraska who persisted in contacting their Senators and giving voice to the urgent need for property tax relief. I also want to thank Speaker Jim Scheer of Norfolk who helped shepherd LB 1107 through the legislative process. His leadership was critical to the tax relief bill’s success.
As we continue to work to get Nebraska growing in the coming months, LB 1107 will give the people of our state major relief from property taxes and help us bring more great job opportunities here to the Good Life. If you have questions about what LB 1107 will mean for your family or business, please email email@example.com or call 402-471-2244. Thank you to each and every one of you who put time and energy into making property tax relief happen in 2020!