Shift to ag real estate taxes unsustainable

Thursday, January 4, 2018

The second session of the 105th Legislature started on Wednesday, Jan. 3 and will finish with our 60 working day on April 18. This was my fourth opening day and I am always reminded of a statement by a senior senator on my first opening day.

“This is one of only two days each session we all like each other.” Of course, the other day is closing day. That is a very true statement. Each senator works hard and is passionate about doing what they feel is right for their constituents and the state. But we have different opinions and personal priorities about how and when we need to get things done.

This year as with every year my main priority will be property tax relief. I know this might come as a shock to most of you, but I get criticism from a few every time I talk about property tax relief in my articles. This is good because it forces me to keep looking for new ways to make the point to my colleagues in Lincoln. Recently, I have looked at the amount of tax dollars collected in Nebraska and came up with some astounding numbers as to why farmers and ranchers, in particular, are complaining loudly about their property tax burden. I looked at the amount of dollars collected by category of tax to fund government across the state. These are dollars used by government of all levels in Nebraska to provide services to us the citizens. In this comparison, I am using only the amount of DOLLARS collected by each category of tax and comparing what we collected 10 years ago to what we collect today. Sales tax dollars collected, up 17.64 percent in 10 years. Individual Income tax dollars collected, up 32.78 percent in 10 years. Corporate Income tax dollars collected, up 40.55 percent in 10 years. Residential Real Estate tax dollars collected, up 26.86 percent in 10 years.

Agricultural Real Estate tax dollars collected up, 102.44 percent in 10 years. We all know the cost of living and providing services goes up every year. But these numbers clearly show one sector of our economy is being forced to shoulder an ever larger burden of our government costs. K-12 education is the largest recipient of property tax dollars in Nebraska. It is the State of Nebraska’s responsibility to educate our children, not the local property taxpayer. Property tax is not a local tax. There has been a tremendous shift of tax revenue used to fund K-12 education from sales and income tax dollars to Ag real estate taxes. That is a shift that is unfair and unsustainable, especially with the current slump in the agriculture industry. There will be several ideas and bills brought before the Legislature this year to try and re-balance the tax playing field. As with any issue, there are numerous sides and the ripple effect of any legislation needs to be carefully considered before passage.

I will be putting together an article each week throughout the legislative session to give everyone in the 44th District additional information about the progress of the legislature. As always, I appreciate your feedback. Happy New Year!

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  • I do hear Ag land owners complain about property taxes. They are organized, lobby and are the most vocal. For the vast majority of Nebraskans income taxes are what draws the most concern. The Nebraska Chamber held meetings across the state. The results of those meetings and their studies show personal and corporate income taxes are the main tax concern for those that are not farmer/ranchers. If property tax shifts happen and Ag land property tax reduced little will change in retaining individuals living in Nebraska. Little will change in business remaining in Nebraska or moving to Nebraska. If income taxes were reduced Nebraska would be more competitive with neighboring states and we could see growth. Implementation of a sales tax on internet sales would help off set the revenue lost by the state and local communities (which could lower property taxes). No doubt Ag land property taxes are too high but income taxes are too high also and that impacts more citizens in Nebraska.

    -- Posted by dennis on Thu, Jan 4, 2018, at 2:41 PM
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