Fact check on debate of property tax bills

Last week a lot of numbers and rankings were discussed and reported during debate on LB 958, LB 959 and LB 1067 – bills related to property taxes that were amended and advanced. Below we clarify some of these figures.

Property tax credit for agricultural land owners, LB 958

• The legislature gave first round approval to increase the property tax credit for agricultural land owners beginning in 2017, so that the credit is based upon 90 percent of market value instead of 75 percent of market value, the taxable value of agricultural land.
• The cost of the credit will be $20 million in its first year.
• If the credit had in place for 2016, agricultural land owners would have received property tax credits of $108 per $100,000 of taxable valuation, $18 more than without LB 958. For $100,000 of market valuation, the credit would have been $81 in 2016, $14 more than they would receive under current law.

Shortfall impact

• According to the Legislative Fiscal Office General Fund Financial Status as of April 1, thebudget shortfall for next biennium will grow to $248 million if these and other bills that are likely to pass are enacted.
• The shortfall total may change based on a compromise lawmakers are working on regarding LB 1067.
• $248 million is more than one quarter of what the state spends a year on K-12 funding and four times what the state spends annually on the Nebraska State Patrol.

How measures will be funded

• The amended proposals do not spell out how they would be funded.
• Without a way to fund the measures, projected funding for key services like schools, roads and public safety will need to be cut.
• There has been talk of using $100 million from various cash funds, but that would still leave more than half of the shortfall to be addressed through cuts to projected spending.

Rankings

• Nebraska ranks 23^rd in state and local taxes as a share of personal income, according to U.S. Census data. (Personal income tax rates rank 25^th; corporate income tax rates, 26^th; sales tax rates, 24^th; and property tax rates, 14^th.)
• The Tax Foundation’s State-Local Tax Burden ranks Nebraska 30^th, No. 1 being the highest tax burden.

Second-round debate on all three bills is likely to occur this week and can be viewed on NET 2 and NET Nebraska will stream the debate live. OpenSky will provide updates on our Twitter page.