For Nebraskans who want property tax reform this week is important. The Nebraska Legislature has been debating a number of tax and education funding measures. On Friday, the Legislature is scheduled to debate LB461, a measure that prioritizes income tax reform and Reform for Nebraska’s Future has announced their opposition to such a measure with an updated Legislative Report Card.
The need for property tax reform for the vast majority of Nebraskans is clear. According to a poll released by Reform for Nebraska’s Future, 77 percent of Nebraskans support property tax reform and 62 percent of Nebraskans believe it is the top priority. But, property tax reform does not appear to be the top priority of Governor Pete Ricketts and Senator Jim Smith, the champions of LB461.
Some claim that LB461 provides property tax relief, but those who would benefit would barely notice a change in their property tax bills. The purpose of this bill is to change the way that agricultural land is valued, which even Nebraskan’s agricultural groups question whether this is the right action. In fact, all of the agricultural groups oppose this bill. Beyond its impact on ag property owners, LB461 provides absolutely no relief for home owners who have seen a 35 percent increase in property taxes over the past decade.
If you care about property tax reform, you should oppose LB461 because it only provides $1 of property tax relief compared to every $10 of income tax relief. This proposal has its priorities backwards.
Nebraska’s two major newspapers agree that LB461 is misguided. On April 14th, the Lincoln Journal Star warned that there are still too many questions unanswered to support such a measure. One question they raised is who will benefit and a recent study “estimated that 74 percent of the income tax benefits would go to the top 20 percent of income earners.”
Today, the Omaha World Herald opposed LB461 saying, “Nebraska lawmakers should turn a skeptical eye toward a state tax-cut proposal known as Legislative Bill 461.” One part of their opposition focused on the fact that LB461 provides agriculture property owners some relief, but fails to provide commercial and residential property owners anything at all. “LB461 would cap the annual increases in ag-land valuations at 3.5 percent but wouldn’t cap increases on residential or commercial valuations.”
LB461 in its current form is not what Nebraskans want. It provides little property tax relief to just one group of Nebraskans when all Nebraska property owners – residential, commercial, and agricultural – need property tax relief. Additionally, the current proposal’s intent is more to provide Nebraska’s wealthiest with an income tax cut, which only 14 percent of Nebraskans said was a priority in our January poll.
LB461 has misplaced priorities and does nothing to fix the problems Nebraskans currently face.