What would you do about property tax relief?
I am a mother, grandmother, farmer, neighbor, retired educator and wife of the late Ron Raikes. My family and I share your concerns about agriculture. Just like yours, our property taxes are sky high, the livestock market and commodity prices are low, and now, in the coronavirus recession, prices are going even lower. Corn prices are dropping, and ethanol markets are dropping out of sight. I am not telling you anything you do not already know. We have seen bad markets and high costs before, but this time it’s different.
We continue to have some of the highest property taxes in the nation. Our farmers pay twice more than farmers and landowners in neighboring states. While land values have escalated and have stayed high, our farmers are paying approximately 40% of all their earnings on property taxes. This cannot be sustained.
We need a strong response.
State senators have said they want to help, but the Legislature has achieved little to alleviate the stranglehold property taxes have on farmers and rural landowners. It is time for a change in the Legislature—new ideas, new voices and strong leadership.
In the long run, we must: (1) lower reliance on local property tax for public schools, (2) broaden the tax base, and (3) develop new ag markets and new revenues, so we can bring more money into Nebraska.
- First, our property taxes are among the highest in the country. Our state aid financial contribution to public schools is 48th in the country. We need to find a way for the state to provide more support for our local public schools to more equitably share the burden with property taxpayers.
- Second, we can look to our neighboring states for ways to consider remodeling the tax base. South Dakota has a broad sales and service tax base. There are other ways to think about restructuring the tax structure in Nebraska. We need to be open to all options.
- Third, many neighboring states have revenue sources from production of hemp to gaming. Thousands or even millions of Nebraska dollars are flowing to our neighboring states for goods and services. We need to examine new revenue possibilities and find those that are right for Nebraska.
I would put all of these on the table in order to create a tax structure that doesn’t rely so heavily on property owners. This will not happen in one year, and will require building coalitions and working with both parties, the governor and interested groups, including business groups. As an Independent, I have no partisan affiliation and am ready to work in the Unicameral to get these important issues resolved. I have experience in bringing people together to solve difficult problems, and I’m ready to do this for our District.
In the short run, there are other actions possible. State aid to public schools is based on a simple formula: Needs minus Resources equals Aid. To reduce property taxes, I would
- Lower local effort by reducing levy caps and the percentage of ag value used in the state aid formula to calculate revenues from property taxes. That will bring in more state contributions and automatically lower property taxes. I would also make a new and concerted effort to bring property tax payers to budget hearings with school boards and administrators and model setting final levy levels together to create a less adversarial process at the local level.
- Continue to Increase the existing Property Tax Credit My opponent argues he has improved tax relief by 23% by voting for two-year increases in this fund. The Legislature voted to add to the Tax Relief Fund. This has reduced property taxes for some farmers and property owners by a small amount. It only scratches the surface of needed changes. Most property owners see very little difference in their tax bill. We need to continue to build this fund so it can provide significant relief. But be clear, this is not the major solution.
- Give counties state funds for bridges, which are badly in need of repair – and reduce the need for these property tax funds at the local level.
- Reduce the share of community college expenses paid by property taxes to increase the state’s contribution, given the overall benefit to the state labor force from community colleges.
No one strategy can fix the problem; it will take a combination. These actions will provide some relief relatively quickly.
Have the actions/inactions of the past four years in the Legislature done anything substantial to remedy the unfair burden on landowners? Are farmers and landowners better off than they were four years ago? There were several bills introduced in the Legislature this past session that aimed to shift the local and state efforts for schools, but none could obtain the votes for passage. However, the bills introduced did not go far enough. As examples, the final leading contender, LB 1106, would have reduced property tax by a three-year average of only 1.15% in East Butler, 1.27% in David City, 1.33% in Shelby/Rising City, .66% in Ashland, 3.9% in Wahoo, 3.59% in Raymond Central and 6.06% in Schuyler school districts. With all the posturing, it scratched the surface while introducing new unrealistic constraints on public schools. We need real leadership to move beyond the impasses of the current session.
Let the record speak. First, my opponent claims credit for reducing property taxes by 23% because he voted for the increments in the Property Tax Relief Fund that amounted to minimal change in tax bills. In fact, he voted NO seven times on the total budget bill that included this increment (and that passed without his support), and only once for the amendment that supported this increment. Second, he also supported the Revenue Committee’s bills (LB 974 and LB 1106) that were not passed, because they lacked important provisions for all parties needing to agree. He did not lead, did not introduce any bills or amendments for property tax relief, did not speak during the floor debate on these matters, and as far as I know, did not contribute to the negotiations needed for successful passage of lasting reform.
It will take real leadership to make the changes needed.
I understand how difficult the problem is and I won’t pursue or support short term fixes. I have experience working across rural and urban interests. I will work to bring together farm and school groups as well as Democrats and Republicans for thoughtful problem solving in troubled times– for real property tax relief and a fair tax structure for Nebraska.