New Law Helps Nebraskans Stand Up to Property Tax Hikes
Update: LB103e was signed into law on March 12, 2019.
For many Nebraskans, the process by which local governments increase property taxes can seem mysterious. The property is assessed, and near the beginning of the year, a postcard arrives with a preliminary valuation that may mean a property tax increase.
Some taxpayers get indignant enough to meet with their county assessor to challenge an increase.
If their challenge is rejected, many assume they’ve run out of options. But, in fact, the tax increase resulting from rising valuations isn’t finalized until later in the year, when local government budgets are adopted.
Local governments have the ability to mitigate increases in property tax values by reducing their tax rates, also known as levies. Some local governments do make adjustments, but cumulatively, property taxes from the many taxing subdivisions continue to increase in a way that seems almost automatic.
By unanimously passing Legislative Bill 103e (the “e” stands for emergency), the Unicameral has put in place a new limit on local property taxes that will give taxpayers more cover from valuation tax hikes.
Property values have been on the rise in Nebraska, and not only on agricultural land. Housing prices in Nebraska have seen the country’s sixth-fastest increase over the last decade.
As a bill passed with an emergency clause, LB103e will become law essentially as soon as the governor signs it, putting a new limitation on this year’s expected property tax valuation increases.
If your county, municipality, school district or other educational unit, natural resource district, or community college sees an overall increase in valuations, it must now automatically reduce levies by the same percentage.
If your valuation tracks with the overall increase, your bill would stay the same. Some taxpayers may pay more or less, but in general, the local government would collect the same property tax revenue as the prior year.
Local boards could still seek an increase, but now under LB103e, officials would be required to consider any property tax increase separate from the usual budgeting process.
Notice for a special public hearing must be given, explaining how much of the new valuation increase the board would like to adopt by increasing property tax levies. For example, if overall valuations increased ten percent, and the board wanted all the revenue, a hearing on a proposed ten percent levy hike must be held.
This will be your chance as a taxpayer or resident to explain what you think local officials should do.
Following the hearing, elected board members would only be allowed to adopt a tax increase by passing an ordinance or resolution, putting their position on the public record.
Many Nebraska property taxpayers have become highly skeptical that anything can be done locally to rein in boards used to raising property taxes, and it’s true that additional reforms are still needed to significantly change course on Nebraska’s property tax burden.
But LB103e should not be underestimated as a tool to stem the tide of property tax increases.
The new law to-be doesn’t just give Nebraskans a way to engage their local boards. If you’re among those who believe nobody on your local board will vote down a property tax increase, LB103e also provides a great reason for you to consider becoming one of the leaders who will.