How Nebraska Can Improve Truth-in-Taxation: Lessons from Utah’s Property Tax Reform

Utah passed the nation’s first Truth-in-Taxation (TNT) law in 1985, giving the Beehive State 40 years to refine and finesse their property tax program.  

Nebraska has adopted a similar law which can be improved by adjusting the schedule for when Truth-in-Taxation hearings occur so that the TNT process precedes budget adoption. 

Utah’s tax transparency procedure occurs before the local government budget is set, thus allowing the property tax transparency process to fully inform governance decisions. This provides a more transparent and accountable local governance system. 

Utah’s procedure occurs in three steps: 

1. Resolution declaring intent and scheduling hearing – This is a resolution by a local government adopted at a public meeting declaring intent to exceed the rollback tax rate. In Utah, the rollback tax rate is the rate necessary to collect the same revenues as the previous year, even if valuations have increased.
2. Truth-in-Taxation Hearing – A public hearing is held to let taxpayers hear the purpose for adopting a higher tax rate than the rollback rate. This hearing is preceded by notification to taxpayers about how the tax change will impact their individual tax bill. 
3. Adopt Final Budget and Tax Rate – The local government votes to adopt a budget and tax rate after the TNT hearing and transparency process. 

A public hearing notification for Alta, Utah lays out what this process looks like in the Beehive State. The timing of these hearings varies along two schedules in Utah depending upon whether the local government operates on a calendar year or fiscal year. But either way, the TNT process precedes the final budget adoption. 

In contrast, local governments in Nebraska often go through budget processes and make key budget decisions before any September hearings for property tax increases subject to Nebraska’s TNT law.  

Furthermore, Nebraska allows property tax revenues to increase beyond the prior year’s collections without triggering the Truth-in-Taxation process. 

Nebraska can significantly improve transparency and accountability by changing the timeline for Truth-in-Taxation to ensure local constituent voices are heard before budgets are decided upon. And TNT hearings should be triggered upon the first dollar of additional property tax revenues. LB 575, introduced by Senator Robert Hallstrom, fixes both of these problems with Nebraska’s Truth-in-Taxation law.