09 Jan Property tax plan could do the trick
Kearney Hub, Opinion —
Tax policy is a complicated topic, but it appears the Revenue Committee of the Nebraska Legislature has devised a way to simplify tax reform, and the simplification could be the best selling point in pushing the committee’s plan through the full Legislature.
Passage of tax reform is essential this year for a number of reasons, top of which is fairness.
For almost a decade, Nebraska’s farmers and ranchers have been overtaxed on their property to support schools and county government.
The heavy burden they’ve carried has harmed their operations. In some cases they’ve been forced to borrow money to cover their tax obligations. Placing such a heavy tax load on Nebraska’s principle industry is killing the goose that lays the golden egg.
Overtaxing farmers is unfair and it’s foolish, so it’s time that lawmakers addressed the situation.
The Revenue Committee, chaired by Sen. Lou Ann Linehan of Elkhorn, has proposed reducing property tax bills for school patrons by about 15 percent by boosting state aid to education.
Here’s how it would work:
Property tax relief would be delivered mainly through “foundation aid,” which would send school districts $695 in state aid per student in the first year and increase that to $2,265 by the third year, at which time state aid to schools would have increased by $530 million.
Under the new plan, residential and commercial property eventually would be taxed on 85 percent of its actual value for school funding only, down from the current 100 percent. Farmland valuations would drop from the current 75 percent to 55 percent.
Some of the state’s smallest school districts would see state aid increases of tenfold to twentyfold, while the largest districts — which get the bulk of state aid now — would see just modest increases.
Reading between the lines of the three bullet points, the Revenue Committee’s plan would boost state funding for rural districts while reducing the property tax liability of farm ground. It would seem the committee has achieved a workable solution and one that would deal farmers and ranchers more fairness on their tax bills.
In particular, we believe the proposal would allow the Legislature to fine tune state aid by tweaking the per-student foundation aid and the percentages at which the various classes of property are taxed.
It’s simple enough that Nebraskans should be able to understand the workings of their tax system, and that means it’s an accountable and open system.
Not every Nebraskan is going to approve. There’s always someone who feels they’re being cheated. However, the Revenue Committee has come through with a plan that’s worthy of serious debate.