The property tax portion of the Nebraska Legislature’s push for a tax relief package took a major step toward passage as senators passed Legislative Bill 243 on first round debate. Reducing Nebraska’s overreliance on property taxes and seeking a more balanced system to fund education in the state is a top priority for Nebraska Farm Bureau. A package of bills, now making its way through the Legislature, would be a big step toward achieving NEFB’s policy goal. Albion Sen. Tom Briese is championing the portion of the package that would provide property tax relief to all Nebraskans.
“LB 243, in its amended version, does several things. It puts additional dollars into the property tax credit fund that goes to all Nebraska property owners and is weighted toward agriculture and rural Nebraska. It also provides an escalator in that fund after we get these additional dollars in there. It removes the 5% cap on the LB 1107 income tax credits, which is probably worth on average $9 to $10 million per year to Nebraskans. It also places generally a 3% cap on revenue growth of public schools in Nebraska. By doing that, then we reduce increases in property taxes and hopefully drive down property taxes under the right circumstances. But there are several exceptions built into that, to ensure that school districts can do their job. You know, we don’t want to choke off public schools in Nebraska. But we do want to ensure that public schools are spending dollars wisely,” said Briese. LB 243 also eliminates the property taxing authority of community colleges.
The combination of all these components yields a significant amount of property tax relief. Senators introduced the comprehensive package of bills focused on income taxes, property taxes and education funding reform on behalf of Gov. Jim Pillen. Nebraska Farm Bureau is very interested collectively in how these all move through the Legislature.
“As we modeled the numbers, we we’re confident that it would be very beneficial to Nebraska farmers and ranchers. But ultimately, we want to make sure that for every dollar that goes into income tax reduction, the same amount will go into property tax relief as well,” said Mark McHargue, president of the Nebraska Farm Bureau.
LB 754 aims to lower income tax rates for corporations and individuals, including farmers and ranchers. The education funding reform part of the package, LB 583, provides $1,500 dollars per student per year to public schools as a foundation aid and increases special education funding.
“It’s very important when we do that, we must ensure those dollars yield property tax relief. And that’s why the cap provision in LB 243 is extremely important. These things all must work together to accomplish what we need to accomplish. But it is a package of income tax relief, property tax relief, education funding reform, and they are all tied together. One doesn’t go without the other. But I am very optimistic about the chances of the passage of these packages. And they represent a very substantial amount of tax relief for our farmers and ranchers,” Briese said.
The goal of the package is to provide $3.4 billion dollars in income tax relief and match that amount in property tax relief. A dollar-for-dollar tax relief, which is what Nebraska Farm Bureau is working toward.
“Folks have questioned the sustainability of what we’re doing here, but all of our models strongly indicate that this package is very sustainable. It is fiscally responsible to get these dollars back in the hands of our taxpayers. I want to make sure this happens this session,” Briese said.
The package also includes putting $1 billion into an Education Future Fund that would help the long-term sustainability of funding public education while providing property tax relief.
“I would encourage Farm Bureau members to reach out to their senators in Lincoln and remind them that additional property tax relief, income tax relief, the entire package is the Legislature’s No. 1 priority to pass. We have made some substantial strides when it comes to property tax relief with the passage of LB 1107 and LB 873. But there is more work to be done, and we need to get it done for farmers, ranchers and every Nebraskan,” Briese stressed.
LB 243 provides additional property tax relief. LB 583 provides education funding. LB 754 provides income tax relief. All three bills are working their way through the legislative process.