Lowering the valuation of agricultural property from its current level of 75 percent of full market value is not the way to lower property taxes in Nebraska. It is most likely to result in higher property taxes, particularly in rural Nebraska.
Ironically, LB 670 would put those in our state’s most rural areas in the toughest spot. There are not many residential and business property owners to shift taxes onto in these parts of the state. Lowering the agricultural land valuation would create a $100 million hole in local property tax revenue. To fill that hole rural residents can either increase property tax levies – getting rid of most of the tax cut caused by the decreased valuations – or they can make cuts to schools, roads, law enforcement and other key services.
Alternatively, the Unicameral could restore some of the aid it has taken from schools, counties and other localities in recent years. After all, those aid cuts helped drive property taxes up in the first place. With state coffers now recovering from the recession, restoring aid to local government aid would seem to be a natural and logical way to help lower property taxes.
Nebraska also could consider agricultural property tax relief known as “circuit breakers,” such as that proposed by Senator Annette Dubas in LB 1038. Circuit breakers provide income tax credits to those who pay high property taxes in relation to their incomes, ensuring that property tax relief goes to those who need it most.
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