Direct notification of property tax hearings advances in Legislature

Direct notification of property tax hearings advances in Legislature

LB644, otherwise known as a Truth in Taxation bill, passed first round debate in the Nebraska Legislature, 36-1. Nine members were “present not voting.”

The legislation moves Nebraska one step closer to providing more taxpayer engagement and transparency when local governments increase their property tax request. Under an approved amendment, LB644 will apply only to a county, city, school district or community college – the largest of the taxing entities. Frequently, when property valuations have risen, these subdivisions have voted to keep tax levies the same, resulting in a windfall for the local government.

The legislation adds teeth to a 2019 law,  LB103, which requires a separate public hearing when property taxes rise because of a valuation increase. While voters want information about these public hearings, polling from the Platte Institute shows 57% of taxpayers either don’t know or are unsure about whether they’re happening at all.

State Sen. Ben Hansen’s LB644 is modeled after a taxpayer-friendly Utah law that requires local government to go through a notification and hearing process if they want to exceed the certified tax rate or property tax asking. If the act is adopted, property owners will get a brightly colored postcard that will notify the taxpayer of the proposed tax increase. It is a great opportunity for local taxpayers who are concerned to engage with government officials, and for those officials to explain the proposed budget and tax increase to their constituents.

Of course, if there is no increase in the tax asking, then there is no hearing or notification required.

Truth in Taxation is a policy that wins bipartisan approval. Last month, for example, the Kansas House and Senate overwhelmingly passed a Truth in Taxation bill, which was signed into law by Gov. Laura Kelly, a Democrat.

One reason Kansas and Nebraska are moving forward with this legislation is that it worked really well in Utah to hold the line on property tax increases, where it has been law since 1985. At its adoption, Utah had the 24th lowest property tax in the nation, but has now improved to 14th lowest. According to the Utah Taxpayers Association, “the purpose of truth in taxation is to provide notification, disclosure, and the elimination of automatic property tax increases. Local governments should not receive an automatic 12% revenue increase simply because property valuations increased 12%.”

Continue following the Platte Institute for updated coverage on LB644 and other key tax legislation in Nebraska.

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