As Nebraska emerges from pandemic restrictions related to coronavirus, the Legislature is preparing to return to Lincoln to complete the last 17 days of the legislative session for the year. There are several priorities they will consider in the short time remaining, but one looms large: property tax relief.
Over the last five years, the State has made progress in delivering relief from high local property taxes for hardworking Nebraskans. In 2019, Senators and I delivered significant tax relief by increasing the property tax credit relief fund by over 20 percent. That fund has nearly doubled during my time as Governor, from $140 million to $275 million per year. This is direct property tax relief from the state credited on your property tax statement.
While the State has made progress, Nebraska remains at a competitive disadvantage. In my travels across the state, Nebraskans consistently name property tax relief as their number one concern. Given the negative impact that high property taxes are having on Nebraska’s working families, both rural and urban, property tax relief remains my number one priority for the Legislature as it reconvenes. This year, LB1106 is the vehicle for property tax relief. If approved, it will provide significant state resources to schools while controlling their spending.
Nebraska’s farmers and ranchers pay more in property taxes than any of our neighboring states. In fact, the latest Census of Agriculture report by the U.S. Department of Agriculture shows that Nebraska’s property taxes on ag producers rank second in the nation only to California. Given the low commodity prices, flooding, and other factors that have compounded pressures on our family farms and ranches, higher property taxes have added another burden making it difficult for farm families to make ends meet.
Ag producers aren’t the only ones hurt by high taxes. A Wallet Hub study released in February showed Nebraska has the 8th heaviest overall property tax burden in the country. Nebraskans pay an effective property tax rate that is higher than every single one of our neighboring states. Our rate is 234% higher than Colorado, 190% higher than Wyoming, 82% higher than Missouri, 45% higher than South Dakota, 26% higher than Kansas, and 13% higher than Iowa.
As we work on property tax relief, it’s important to remember who has the authority to raise and lower your property taxes. Property taxes are exclusively collected and spent by local political subdivisions such as schools, counties, cities, community colleges, and natural resources districts. Of these units of government, schools collect and spend roughly 60% of property taxes. Nebraska schools spend $12,491 per student – far more per student on K-12 education than surrounding states. That’s $759 more per pupil than Iowa, $838 more than Kansas; $1,681 more than Missouri; and over $2,200 more per student than either South Dakota or Colorado!
While many agree we need property tax relief, the challenge for Senators will be to come to agreement on a plan. A clear majority of Senators support property tax relief, however, in the Unicameral a two-thirds supermajority (33 out of 49 Senators) is needed to pass major legislation. If you want to see property tax relief this session, it’s important that they hear from you. You can find State Senator contact information at www.NebraskaLegislature.gov.
There are special interests that will make arguments to try and defeat property tax relief. Nebraska, however, remains in a strong position to make progress on this critical issue. So far, our economy has been the most lightly affected by pandemic-related restrictions. We have the lowest unemployment rate in the nation, and our GDP was the least affected among all states in the first quarter of the year. Additionally, tax receipts through 11 months of the fiscal year which ended June 30, 2020 were tracking to the forecast of July 2019. This is despite the fact that a significant portion of projected income taxes were deferred to the new fiscal year starting July 1st.
Failure to act on LB1106 would have far-reaching consequences beyond higher property tax bills. Many Senators and I believe that we must deliver property tax relief for Nebraska families before we consider corporate incentives. Thus, a failure to move on property taxes would risk our business tax incentives and a major project for the University of Nebraska Medical Center.
As we enter the final days of the legislative session, we are at a critical moment for our state’s future. I will continue to work with Senators, so we can come together around a plan that moves property tax relief forward to grow our state. I urge Nebraskans to engage their Senators on these important issues as they return to work here at the State Capitol. If you have questions about the current tax relief package or any other matter, you are always welcome to email email@example.com or call 402-471-2244.