Nebraska Legislature Passes Historic Tax Relief Proposal
The work of the Nebraska Farm Bureau in the 107th legislative session has culminated into a massive property tax reduction and one of the largest tax cuts in Nebraska state history. On Thursday, April 6, LB 873 passed final reading and is now awaiting signature by Governor Ricketts.
This nearly billion-dollar tax relief bill will save an estimated $886 million in property taxes over the next five years.
The property tax savings in this bill build upon the extremely successful refundable income tax credits delivered in 2020 through LB 1107. Those tax credits, which can be claimed on property taxes paid towards public education, delivered a 25 percent savings this last year, averaging $6,319 per farm/ranch. LB 873 creates a floor under those credits ensuring that those savings can never decrease and will grow annually up to 5 percent according to economic growth. LB 873 also creates refundable income tax credits to be claimed on property taxes paid towards community colleges.
When fully implemented, key elements of LB 873 include:
- An estimated $886 million for property tax relief.
- $681 million for property taxes paid to K-12 schools by putting a floor under the current refundable income tax credits created in 2020, and
- $205 million more in relief for property taxes paid to community colleges.
- Property tax savings in both areas will increase based on property valuation growth up to 5 percent annually to mirror average inflation.
- Tax savings for property taxes paid to community colleges will be phased in over five years and are estimated to grow from 20 percent to 60 percent of the property taxes paid.
- Reduction of income taxes over the next five years, by:
- Lowering the individual income tax rate from 6.84 percent to 5.84 percent, and
- Lowering the corporate income tax rate from 7.1 percent to 5.84 percent.
- Elimination of income taxes on social security income.
“This tax relief bill is transformative for farmers and ranchers and all Nebraskans across the state. The successes we saw from the refundable income tax credits passed in 2020 were outstanding, and to be able to secure those successes and ensure even further property tax relief for Nebraskans is a windfall,” Nebraska Farm Bureau President Mark McHargue said.
USDA to Provide Payments to Livestock Producers Impacted by Drought or Wildfire
The U.S Department of Agriculture (USDA) announced that ranchers who have approved applications through the 2021 Livestock Forage Disaster Program (LFP) for forage losses due to severe drought or wildfire in 2021 will soon begin receiving emergency relief payments for increases in supplemental feed costs in 2021 through the Farm Service Agency’s (FSA) new Emergency Livestock Relief Program (ELRP).
To help agricultural producers offset the impacts of natural disasters in 2020 and 2021, Congress included emergency relief funding in the Extending Government Funding and Delivering Emergency Assistance Act. This law targets at least $750 million for livestock producers impacted by drought or wildfires.
“Producers of grazing livestock experienced catastrophic losses of available forage as well as higher costs for supplemental feed in 2021. Unfortunately, the conditions driving these losses have not improved for many and have even worsened for some, as drought spreads across the U.S.,” said Agriculture Secretary Tom Vilsack. “In order to deliver much-needed assistance as efficiently as possible, phase one of the ELRP will use certain data from the Livestock Forage Disaster Program (LFP), allowing USDA to distribute payments within days to livestock producers.”
High Stakes at the High Court
As the Voice of Agriculture in Washington, the American Farm Bureau advocates for policies and regulations that respect America’s farmers and ranchers and the thoughtful choices we make every day in caring for our land and animals. Sometimes our efforts lead us to the nation’s highest court, which is the case this week.
The U.S. Supreme Court has agreed to hear a lawsuit we filed with the National Pork Producers Council to stop California’s Prop 12 from going into effect. California’s proposal would ban the sale of pork unless the sow that gave birth to the pig was housed according to the state’s arbitrary production standards. Here’s the giant red flag, the California law would apply to pork raised on farms outside of California, too, essentially giving one state the power to set the law of the land across the country.
That’s why American Farm Bureau filed a lawsuit to challenge Prop 12. The fact that the Supreme Court agreed to hear the case tells us they recognize how high the stakes are for agriculture. The Court only accepts 1 percent of the cases filed there, making this decision even more important for farmers, ranchers and consumers. The fact that at least four of the nine justices agreed to hear the case demonstrates how important this issue is. Their decision could set a precedent for how regulations in one state can impact food production across the country.