Revenue Plan Would Target Farmers' Property Tax First

The Nebraska Legislature’s Revenue Committee is informally endorsing a plan to use higher-than-expected state revenues to lower property taxes for farmers, homeowners and businesses.

It’s a multi-year plan the Revenue Committee discussed Friday. In the first year, the tax value of agricultural land would be reduced from 75 to 55 percent of market value. Schools would lose an estimated $100 million in reduced tax dollars, an amount the state would cover instead.

A petition drive currently underway would go much farther. It would require the state to refund 35 percent of what everybody pays in property tax, with no indication of where the $1.5 billion cost of that plan would come from. Revenue Committee Chair Sen. Lou Ann Linehan was asked if the prospect of $100 million is enough to stop support for a $1.5 billion property tax reduction:

In: No, $100 million is not enough. But remember, that’s just the first step in

Out: this

Time: 08

In years two and three, the plan discussed Friday calls for reducing tax values on residential and commercial property in increments of $100 million a year, if money is available. Linehan said Gov. Pete Ricketts has not yet signed off on the plan, but she plans to talk to him this weekend.

To put all this in perspective, property taxes levied in Nebraska have increased by more than $100 million every year this century. Since 2007, governors and the Legislature have tried to soften that increase through a property tax credit fund that has the state pay part of what people would otherwise owe. That fund is now spending $275 million a year – offsetting about 7 percent of what people would otherwise owe in property taxes.