KEARNEY, NEB – The President of Nebraska’s largest general farm organization called on Gov. Pete Ricketts and members of the Nebraska Legislature to pass legislation initiating state tax reform that would broaden Nebraska’s sales tax base as a means to offset and reduce the reliance on property taxes. Nebraska Farm Bureau President Steve Nelson made the remarks during his annual address to attendees at the Nebraska Farm Bureau Annual Meeting and Convention, Dec. 5 in Kearney. Nelson emphasized the need for a revenue neutral solution that ensures every dollar generated in expanded sales tax would be used to provide dollar for dollar reductions in property taxes.
“Residential, commercial and agricultural property taxpayers are being punished by a broken tax system,” said Nelson. “It’s time for the governor and every state senator who campaigned on the promise of addressing property taxes to step up and address this issue head on.”
Nebraskans now pay the 7th highest property taxes in the nation with property taxes accounting for almost half (48 percent) of the three major revenue sources of property, state sales and state income taxes.
“We must have a more balanced tax system that doesn’t put the burden of funding schools and other state priorities so heavily on property taxes paid by homeowners, businesses and agriculture. Our tax system has allowed our three-legged tax stool to grow further and further out of balance,” said Nelson.
In remarks, Nelson said there’s been a “seismic shift” onto property taxes over the last decade that must be fixed and the solution to rebalancing the burden between property, sales and income taxes involves tax reform that includes broadening the state’s sales tax base. Sales taxes account for only 19 percent of contributions to Nebraska’s three-legged tax stool in comparison to 48 percent for property taxes.
“Today I call on our governor and the legislature to pass tax reform legislation in 2017 that broadens our state sales tax base as a means to offset and lower our property tax burden, and in a manner that is revenue neutral, ensuring every dollar from expanded sales taxes is dedicated specifically to provide dollar for dollar reductions in property taxes. This is the direction we must go to re-balance our broken tax system,” said Nelson.
Nelson also said there is no room for excuses when it comes to initiating tax reform.
“The state’s budget shortfall is not an excuse to avoid working for long-term tax reforms that balance our tax burden for current and future generations of Nebraskans. Nor is it acceptable to say that property taxes are not a state issue,” said Nelson. “K-12 schools are the largest user of property taxes in Nebraska and it is clear the vast majority of the costs associated with local school funding can be directly attributed to mandates from the state. Property taxes are very much a state issue for the governor and the legislature to address.”
Nelson also said the property tax problem isn’t just a major issue for farmers and ranchers, pointing to a coalition of homeowners, businesses and agriculture interests that recently formed to oppose and successfully defeat a $369 million community college bond in Southeast Nebraska. Nebraska Farm Bureau and its members partnered in the effort.
“There was a strong message in the vote that defeated the community college bond. Voters support education, but property taxes are just too high. The voice of Nebraska taxpayers is rising. Nebraskans want tax reform that fixes the property tax problem. Nebraska Farm Bureau will continue to lead the charge and we will continue to push forward in partnership with those who share our belief that the time for reform is now,” said Nelson.
The Nebraska Farm Bureau is a grassroots, state-wide organization dedicated to supporting farm and ranch families and working for the benefit of all Nebraskan’s through a wide variety of educational, service and advocacy efforts. More than 61,000 families across Nebraska are Farm Bureau members, working together to achieve rural and urban prosperity as agriculture is a key fuel to Nebraska’s economy. For more information about Nebraska Farm Bureau and agriculture, visit www.nefb.org.