Not All Values Uniform
Often changes in the values of agricultural property are talked about as if property markets are uniform across the state. Increases or decreases in values are brought up as if applicable to all property no matter where it’s located. Land characteristics, land uses, and local circumstances vary markedly across the state, and property markets reflect these differences. Figure 4 illustrates the differences. It shows, by county, the percentage changes in taxable values for agricultural property between 2015-2020 based on data from the Nebraska Department of Revenue. Agricultural land, outbuildings, farm sites, and machinery and equipment are included as agricultural property—however, 92 percent of the property base is agricultural land.
Figure 4. Percentage Changes in Agricultural Property Values, 2015-2020
Statewide, the value of agricultural property in Nebraska declined 5 percent between 2015 and 2020. Yet while value overall declined, values increased in nearly one-third of counties with the largest increases centered in Sandhills counties, with values in Hooker County increasing 43 percent. Counties on the periphery of the Sandhills also experienced increases, but at lower levels. In contrast, most counties in eastern and southern Nebraska experienced declines, the exception being a pocket of five counties in eastern Nebraska which also saw increases.
The differences reflect underlying land uses and market conditions. Land in counties in eastern and southern Nebraska is mostly cropped. Crop prices peaked in 2011-2012 and had already started to fall by 2015 dragging the value of cropland down too. Land in the sandhills is grazed. Cattle prices did not peak until 2015, meaning the peak in pasture values lagged cropland values and were captured in the valuation changes during the time period examined, 2015-2020. Market differences, and consequent tax differences, are one reason policy makers find it difficult to fashion property tax policy effective for all taxpayers. Different market conditions and experiences mean varying results across taxpayers.