Jim Vokal’s Weekly Email: I’m Frustrated Again…
I’m frustrated – again. It’s the time of year when we are all braving the heat and the release of countless budgets across the state. And the majority of the elected officials crafting and approving budgets are making the case not only for a Special Legislative Session to reduce property taxes, but reinforcing my number one property tax pet peeve.
What is it you might ask? It’s not anything you haven’t heard me talk about before. I often refer to it as the shell or blame game elected officials make about increasing spending and property taxes in Nebraska. To illustrate this landscape, I am going to pick on my city, Omaha.
And to preface my beef, the City of Omaha is not the lone offender. It happens all across the state and throughout your property tax bill with countless political entities. Regardless, it’s the GREATEST catalyst for why we are in this property tax predicament and why we are all paying more, often times annually.
Valuations go up and so does spending. Governor Pillen rightly recently said, “excessive spending by local governments is the root cause of state’s property tax problem, rather than property valuations.” So, when I recently heard Omaha Mayor Jean Stothert blame the problem on valuation increases not spending decisions, I get frustrated. “I disagree with the governor,” Stothert said. “The valuation system is the problem.”
Assessors, by state law, are to value your property as close to market value. What causes taxes to go down, stay the same, or go up then depends on what spending decisions elected officials do with the windfalls from the valuation increases. Granted, we’ve seen some recent double digit growth across the state and that’s hard on family budgets. I’ve got two kids in college starting this fall – I get it!
What defines a property tax increase is if a city, county, school district, as examples, collect more in property tax revenue than the prior year. Simple as that. In the case of the city of Omaha, here are property tax collections over the last six budgets:
2020 $182.1 million
2021 $193.4 million
2022 $198 million
2023 $210.5 million
2024 $227.5 million
2025 (proposed) $232.7 million.
That’s six straight years of property tax increases despite any rhetoric that rates stay the same or are slightly decreased. This is what you as taxpayers need to pay attention to, and tune out the noise about rates, unless they go down enough so you are paying less or at least the same amount you paid the prior year. Now imagine if all of the ten plus property taxing entities did this every year and many times, that happens.
Now stay with me, and let’s stay in Omaha. On Friday, the Omaha Public Schools Board of Directors voted to oppose Governor Pillen’s plan because they were concerned about controlling their funding for the largest district in the state. Just like the City of Omaha, their property tax collections have increased consistently and their budget almost $60 million over four years!
So why does this all matter? I have heard from so many of you that rising property taxes are pricing you out of your homes or your ability to purchase a home. That many Nebraskans are considering relocating because of the property tax landscape here in the state. I am also hearing frustration that some of the policy proposals you hear from the Platte Institute don’t immediately lower the amount you are paying today (some of our proposals do just that, however).
I get it, but if we don’t embrace policy proposals like hard caps that limit the spending problems that truly are driving the rise in property taxes, it will only continue. There are solutions on the table or could be introduced this special session like hard caps with required voter approval, strengthening Truth in Taxation and requiring levy rates to drop to completely offset valuations increases. Let’s embrace these policies as part of the solution, along with levers (thoughtful policy) that actually reduce the amount you pay each year.
Why? Because it truly is all about spending.
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