Property Tax Relief for Nebraskans
By Governor Pete Ricketts
January 18, 2019
Official photo here.
During my State of the State address to the Legislature, I outlined a series of initiatives to grow Nebraska as we take advantage of opportunities and overcome challenges ahead of us. The budget I presented during the address reflects those priorities. As I prepared this new budget, I put Nebraskans first. We have a responsibility to the people we care for and the people who pay the bills, the taxpayers. My top two priorities in this budget reflect the ones Nebraskans share with me for state government: Controlling spending and property tax relief.
In all my budgets, I have worked to keep the rate of growth at about 3 percent or less. The budget I presented to the Legislature is no different, and keeps the rate of spending growth to 3.1 percent. It is important to note that a significant portion of this spending increase is attributable to the voter-approved Medicaid expansion initiative and state aid to public schools. In my budget, state agencies continue to control spending growth with an average operations increase of just 2.3 percent annually.
Controlling spending is one of the keys to tax relief. The more state government controls spending, the more we can turn hard-earned money back to taxpayers like you. I continue to prioritize property tax relief as I have the last four years. Property tax relief is the number one priority Nebraskans want as I travel the state. Over the past decade, local property taxes have risen over 57 percent. From farmers and ranchers to homeowners, Nebraskans are bearing the burden of the 11th highest property taxes in the nation. It is time for the Legislature to take action.
This year, I have three property tax relief proposals.
First, my budget provides $51 million in new, direct property tax relief through the Property Tax Credit Relief Fund each year. This is a 23 percent increase in property tax relief from this fund to all Nebraska property owners. If the Legislature approves my proposed budget, we will have increased the amount of relief delivered to all property owners through the Property Tax Credit Relief Fund by almost double during my time as Governor.
Second, Senator Brett Lindstrom of Omaha and I are recommending that we establish a statutory floor of $275 million for the Property Tax Credit Relief Fund. This will give taxpayers more certainty about future relief. Right now, the money in this fund must be appropriated by the Legislature every two years. Putting a floor in law would ensure that taxpayers get ongoing relief, and would be a preventative measure against future Legislatures taking funding for property tax relief away from taxpayers.
Third, Senator Lou Ann Linehan of Elkhorn and I are proposing to establish a three percent cap on property tax increases by local governments. To deliver long-term, structural relief, it is important that we limit the growth of property taxes. Our proposal comes in the form of a constitutional amendment, which must be approved by the people after receiving the Legislature’s consideration. While the state can, and will continue to, provide direct property tax relief, an overall limit on local government property tax increases makes the local property tax system more transparent and accountable. If taxpayers believe that local governments need additional property tax resources, a vote of the people can override the three percent cap.
Taken together, these proposals will help deliver immediate relief and structural reform. Furthermore, I am ready to work with State Senators on additional property tax relief proposals. One such proposal is being brought by Senator Steve Erdman of Bayard to create an income potential valuation system for agricultural land, which would help deliver much-needed reform to the valuation of agricultural land for property tax purposes.
This session, I know there will be many proposals introduced by State Senators. Some of them will be innovative ideas that will help deliver true tax relief, and other proposals may attempt to raise taxes under the guise of relief. As I work on property tax relief with the Legislature, I have three principles: Any proposal should help control spending, fit in the budget, and cannot raise taxes on one group of people to reduce taxes on another group.
In the coming weeks, I will be traveling the state to share more about the initiatives I am working on with the Legislature. I hope that you will contact your State Senator to urge them to support this plan for property tax relief. You can find all their information at www.NebraskaLegislature.gov. I also encourage you to watch www.Governor.Nebraska.gov for updates on the session. If you have any questions about property tax relief or any other matter, you are welcome to contact me at email@example.com or call 402-471-2244.
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