Truth in Taxation Law

You may be receiving a postcard saying your property taxes will be raised by more than two percent (2%) and there is a public hearing about the increase. The reason for the postcard is because of a change in state law that requires counties to notify property taxpayers when the property tax asking has increased by more than 2% over real growth.

Below are a few Q&As about the Truth in Taxation law:

Why am I receiving this postcard?

You are receiving this postcard because one or more of the following – city, county, school board, and/or community college – intends to raise property taxes by more than 2% next year. A change in state law requires political subdivisions to notify property taxpayers when the property tax asking has increased by more than 2% over real growth. The “real growth percentage” is defined as an increase in real property valuation due to: Improvements to real property as a result of new construction and additions to existing buildings.

What will be on the postcard?

The postcard will include the date, time, and location of the public hearing to discuss the increase in property taxes.

When are the public hearings?

Public hearings are required to be held September 17-28, with at least seven days-notice given to property owners.

What can you expect at the hearing?

You can expect to hear why your taxes are being raised. You may even hear there is nothing that can be done about it this year. The best you may be able to expect is that you are putting your elected leaders on notice that you will be more engaged in the entire process next year. Only after the public hearing can a political subdivision take a recorded vote to increase property taxes and formally approve its budget.

What can you do to make a difference?

One of the most effective ways to control spending and/or tax increases is for local taxpayers to attend, listen, learn, and participate in open meetings held by local political subdivisions such as schools, cities, counties, and community colleges. The knowledge gained by attending those meetings will lead to more pressure on elected officials to keep property taxes under control.

Even with the recent property tax relief gained in the Legislature, a breaking point may not be that far off if Nebraska continues down its path of over-reliance on unsustainable property tax increases. The more elected officials realize people like you are paying attention, the sooner it will change.

Here are points to think about while attending the hearing:

• Why does the political subdivision need more money in property taxes this year over last year?
• Why can’t the political subdivision(s) lower their levy to keep property taxes and/or their budget from going up?
• Where do these taxes go?
• What is the timeline and process for establishing the political subdivision’s budget next year?
• What does it take to change the decision of the elected leaders before the tax increases tax effect?
• What caused valuations to increase and how much did they go up?

Background

Nebraskans have been asking for truth and transparency about how their property taxes are set. A new law provides taxpayers a well-defined time and place to let their elected officials know how they feel about plans to raise their property taxes.

With the passage of LB 644 in 2022, cities, counties, school boards, and community colleges are required to engage directly with taxpayers when they decide to increase property taxes by two percent (2%) or more on existing property. Increases due to growth like new construction, improvements and additions to existing buildings is not included.

Nebraska became the third state to adopt a “Truth in Taxation” law following Kansas and Utah. (LB 644 adds teeth to LB 103 which the Legislature passed in 2019.) That bill modified the hearing and resolution process for political subdivisions to protect Nebraskans from automatic tax increases when property values increase. As a result, local taxing authorities are required to hold both a public hearing and cast an affirmative vote to collect more in property taxes before taking advantage of increased valuations. Unfortunately, not all political subdivisions were complying with LB 103 by failing to publish notice of the hearing in a local paper. With the passage of LB 644, taxpayers will now receive a postcard alerting them to increases in their property taxes.