NTF issue paper: legwatch304.doc. 3-24.
NEBRASKA TAXPAYERS FOR FREEDOM ISSUE PAPER:
THE MOST IMPORTANT TAX BILL TO PASS INTO LAW: LB 1241.
BACKGROUND. State senators introduced a flurry of property tax reform bills in the 2024 Unicameral session. The Governor incorporated few of them into his inadequate omnibus tax relief bill. Our NTF group selected LB 1241 as the bill of primary importance to pass in the Legislature. Five NTF members testified in favor of this bill at its public hearing on Jan. 31. Naturally, local property taxing authorities appeared in force to oppose the bill. Property taxes have risen by 49% from 2013 to 2023. Levied property taxes have grown 20% higher than the 2013-2023 inflation rate. NE state spending has exceeded this inflation rate. Suffering NE property owners demand and deserve relief now.
THE BILL. LB 1241 would require every local property taxing authority like cities, counties, and school districts to lower their property tax levy by the same percentage that property valuations rose in their subdivisions. If the annual increase in property valuations is 5%, the taxing authority must lower its property tax levy by 5%. Taxing authorities will become more accountable to the taxpayer and not benefit from $$ windfalls from spiking valuations. Bill sponsor Sen. Brad von Gillern met with and listened to representatives of several taxing authorities, including school boards, and subsequently amended the bill somewhat, but the bill still is imperative for taxpaying urban and rural property owners. The bill now amended to allow taxing authorities to benefit from valuation growth. Local government will have to ask taxpayers to vote for additional property tax revenue.
OTHER TESTIMONIES IN FAVOR. A NE Farm Bureau rep: Farm valuations and property taxes have risen despite property tax credits. Property taxes should not hurt rural housing. Ag has witnessed the most rapid rise in property taxes during the last few years. Property taxes as a line item in farm expenses have risen higher than other expenses. Lincoln Chamber of Commerce: Likes zero-based budgeting, which LB 1241 encourages. The bill will bring additional taxpayers to budget hearings. Taking advantage of allowable valuation growth in a subdivision would help taxing authorities. NE Federation of Independent Business: It is a fair bill to small businesses.
OPPOSITION TESTIMONY. Nebraska Association of County Officials: Bill would cause financial hardships to counties. Greater NE Schools Assoc.: The bill will not bring additional state aid to public schools. Rural school districts would suffer most financially, because if you freeze property taxes for these districts, less state aid forthcoming. Taxpayers must fund needs, because schools must provide for basics. Sarpy Co. Commissioners: Roads, public safety, and employee insurance would suffer most. County will require additional property tax to maintain current service levels. The county would have to cut staff and halt projects. (Sarpy could raise taxes on the Google complex, which already received tax incentives). NE Assoc. of School Boards: Bill would cripple school districts financially. Lincoln Public Schools: Major financial problems if passed. District suffers from $30 million lower state aid. NE Council of School Administrators: Bill will cause loss of state aid now used for basic learning. NE Community College Assoc.: The bill conflicts with existing law regarding community colleges collecting property tax if state aid not forthcoming (Sen. von Gillern solved this problem in the bill). Leftist Open Sky Institute: Financial disaster will ensue. Gretna & Elkhorn Fire Depts.: Now converting from volunteer to paid personnel, so they need more money. All revenues needed for core services. Millard Fire Chief: Area is growing rapidly. Increased number of calls for service. Lancaster Co. Board: Population is increasing, so services increasing for core services. Rural School Districts: A disparity in property taxes across NE. State should re-appropriate state aid among school districts, targeting rural schools. Papillion-La Vista Schools: Property taxes have risen, but state aid has dropped. The district cannot make up the difference. Omaha Public Schools: Districts already have limits on taxes and revenue growth.
TAKE ACTION NOW. Despite NE urban and rural property owners livid about skyrocketing valuations and property taxes, there is no guarantee that our legislature will ever offer us meaningful tax relief in either area while local taxing authorities refuse to streamline spending. Using your personal and business experiences with spiking valuations and property taxes and the information above, lobby your state senator today to advance LB 1241 to passage. Email netaxpayers@gmail.com for state senator contact information and to join our NTF Legislature Watch Project.