By Scout Nelson
Nebraska faces a significant challenge with its rising property tax burden, increasing by approximately $285 million annually. Recognizing the strain this places on homeowners and farmers, state legislators are actively pursuing solutions to provide meaningful relief.
One of the central efforts is Legislative Bill 34 (LB 34), which aims to streamline the property tax credit system. Previously, property owners had to apply for income tax credits to offset their property taxes. LB 34 proposes an automatic credit system, ensuring that taxpayers receive relief directly on their property tax statements, simplifying the process and increasing accessibility.
Additionally, the bill introduces caps on the growth of property tax collections by local governments. Starting in 2025, municipalities and counties will be restricted to increasing their property tax revenues by no more than the rate of inflation or 0%, whichever is greater. This measure is designed to curb unchecked growth in property taxes and promote fiscal responsibility at the local level.
Governor Jim Pillen has been a vocal advocate for substantial property tax reform. His proposals include the Agricultural Value Fairness Act, which seeks to adjust land valuations based on land type and region, with a statewide growth cap of 3.5%. Furthermore, he supports shifting the funding of community colleges from property tax revenues to state support, potentially resulting in a 5.3% average property tax cut statewide.
Despite these initiatives, challenges remain. Some lawmakers express concerns about the potential impact on the state's budget, especially given projected shortfalls. For instance, the implementation of LB 81, aimed at correcting an oversight in LB 34 regarding the 2024 tax year, could result in a significant reduction in the state's General Fund revenue.
Nevertheless, the collective efforts of Nebraska's legislators signify a committed approach to addressing the property tax issue. By introducing reforms that simplify tax credits, cap local tax growth, and reallocate funding responsibilities, the state aims to alleviate the financial burden on its residents and promote economic stability.
Photo Credit: istock-alenamozhjer
Categories: Nebraska, Government & Policy