Discussions on how to provide property tax relief to Nebraskans will ramp up next week when the Legislature’s Revenue Committee holds its public hearing on LB 958, one of two bills introduced on behalf of Gov. Ricketts targeted to addressing property taxes. Nebraska Farm Bureau has taken a position in support of the bill that seeks to tighten spending and levy limits on local governments and limit the aggregate statewide value increase on agricultural land to three percent per year.

Sen. Mike Gloor of Grand Island, chair of the Revenue Committee, introduced LB 958 on the Governor’s behalf. The public hearing on the measure will be held Thur., Feb. 4.

Nebraska Farm Bureau is also supporting LB 959, the second bill introduced on the Governor’s behalf. Sen. Kate Sullivan of Cedar Rapids, chair of the Education Committee introduced LB 959 which seeks to limit schools spending by removing certain budget exclusions, changing authorities of school boards as it relates to spending, limiting growth in school district cash reserves and adjustments in the state aid to schools formula, among other provisions. No official date has been set for the hearing on LB 959.

“Farm Bureau appreciates the work of Gov. Ricketts, Sen. Mike Gloor and Sen. Kate Sullivan in drafting legislative bills 958 and 959; both aimed at controlling costs of government supported entities and limiting the future growth in valuations on agricultural land to three percent per year,” said Steve Nelson, Nebraska Farm Bureau president.

In addition to supporting those two bills, Farm Bureau is evaluating numerous other bills targeted at addressing our state’s property tax problem to see how they might compliment the Governor’s proposals.

“There are several proposals that would set some remedies in motion this year; however, all of Nebraska’s property owners are seeking relief from the disproportionate burden of property taxes. To that end, Farm Bureau will continue to work on additional measures for consideration in future years that will bring real structural reform to the way our state funds schools and other local government entities,” said Nelson.

Bill Summary – LB 958
Gloor, at the request of the governor – Seeks to reduce property taxes through a three-component initiative which would: 1. Tighten current spending limits on all local governments (excluding schools), 2. Tighten current levy limits on all local governments; and 3. Limit the aggregate statewide value increase on agricultural land to 3% per year. Tightens local spending limits by: 1. Eliminating exceptions to the budget limits for capital improvements, qualified sinking funds for equipment purchases, and expenditures in support of inter-local agreements; 2. Removing authority to exceed budget limits at a meeting of registered voters of a local subdivision; and 3. Limiting carryover of unused budget authority to 3% of the budget. Tightens levy lids by: 1. Eliminating levy limit exceptions for voluntary termination agreements and court judgments; 2. Requiring all exceptions for bonded debts and levy limit overrides to be voted for by a majority of the voters in an election; and 3. Assuring that the levy limits that have been in place for many years are not exceeded except under extraordinary circumstances. Limits the statewide aggregate increase in the class of agricultural property to 3% per year. An adjustment factor would be applied against all parcels of agricultural land if the aggregate exceeds 3%.

Bill Summary – LB 959
Sullivan, at the request of the governor – Seeks to restrict school spending by removing retirement payments, grants and telecommunications costs as budget exclusions and removing the authority of school boards to increase spending by 2% with a 75% affirmative vote. Limits annual growth in school district cash reserves and limits the unused budget authority that may be carried into the future to 5% of the budget. Revises the stabilization factor in TEEOSA stipulating that needs calculated cannot fall below 98%, or exceed 105%, of the prior year’s calculated needs plus student growth. Presently the range falls between 100-112%. Decreases the amount ESU calculated needs for state aid can exceed budgeted funds from 110% to 105%. Removes levy exceptions for environmental hazard abatement, qualified zone academy bonds, and ARRA bonds. Reduces maximum special building fund levy amount from 14 cents to 10 cents.