Legislature begins debate on property tax relief bill

Wednesday marked the opening day of debate in the Nebraska Legislature on a new bill, LB 974, that targets property tax relief.
Providing substantial property tax relief, particularly in rural Nebraska, has proved to be an elusive mission for the Legislature. When Sen. Dan Hughes first went to Lincoln, property tax relief was his primary goal. Six years later, he’s still battling for it.
Paying for the education of our children represents the greatest portion of property taxes at the local level.
There was a time when rural school districts actually got some state aid for education. But over time, that aid shrunk to where many rural school districts now get none!
So, to cover that gap, a bigger share of the load fell on local property tax payers.
The complex school state aid formula has been tweaked time and time again by the Legislature, and over time, it was the metro area schools that came out as the winners. Any coincidence since the largest representation in the Legislature comes from Lincoln and Omaha?
When commodity prices soared early in the decade, so did the cost of agland. As the valuation on that property rose, so did their share of the property tax bill.
Then, commodity prices sunk. Over time, the price of agland fell as well. But it takes three to four years before those lower prices average into property valuation.
The goal of LB 974 is for the state to resume their constitutional responsibility to provide educational aid for all students.
The bill would phase in foundation aid over three years, eventually reaching 15% of state tax dollars — or an estimated $2,416.15 per student.
That provides much more fairness, regardless of the size or location of the school.
In addition, agland would eventually be taxed at 55% of assessed value and residential and commercial property would be taxed at 87% of assessed value.
Passage of this bill will be the first real attempt to reduce the load on local property tax.
Rural senators have tied passage of a economic development incentive package for the state to passage of tangible property tax relief. That’s a strategy we support and encourage Sen. Hughes to stand fast in his efforts to reduce property taxes across Nebraska.