Property Tax Relief Plan Gets Revenue Committee Hearing

LINCOLN, Neb – A plan to lower Nebraska property taxes by lowering the percentage of land value that can be taxed to support schools and replacing the lost revenue with increased state aid had a public hearing Wednesday before the Legislature’s Revenue Committee.

The state’s top agricultural and business groups spoke in favor of the plan while districts of all sizes testified against the bill. The committee took no action with chairman lou Ann Linehan saying the measure is a work in progress.

Many supporters of the plan said while it was far from perfect, it was an important first step. Nebraska Farm Bureau President Steve Nelson told the senators that while farmers and ranchers desperately need property tax relief, the bill would help all landowners.

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The bill calls for increasing state aid $500-million dollars, funded mostly by income and sales taxes, to make up for cutting taxes on ag land from 75% of valuation to 50%.

Nicole Fox of the conservative-leaning Platte Institute think tank said limiting the taxing power of schools must be a key part of any workable plan to reduce property taxes.

Opposition was offered from schools for a variety of reasons. For Milford School Board President Dave Welsch, it was loss of local control.

The biggest worry for school officials seemed to be that if the state can’t meet its full funding obligation, school districts could raise property taxes only enough to cover 75% of the lost revenue.

John Schwartz from a coalition of 19 mid-sized districts called STANCE – Schools Taking Action For Nebraska Children’s Education – warned that Nebraska state revenue is too volatile to be depended on to provide the promised funding.

Chairman LInehan challenged the idea that the funding plan was based on short-term surpluses, saying it was actually based on the average growth in state revenue over the past 20 years.

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