Political subdivisions must own up for property tax hikes

The legislative session began this week and property tax reform continues to be at the top of the senators’ wish list. With this debate looming in the background, local elected officials have been weighing in on who exactly is to blame for property taxes going up, or more specifically, what constitutes a property tax increase.

This last year, the City of Omaha collected over $11 million in property tax revenue over the previous year because of valuation increases.  They had two choices:  spend it or reduce the tax rate and give it back to the taxpayers to keep taxes constant for Omaha.  Guess what?  They chose to spend it.

Let me be clear: this is not a debate on the spending priorities of Omaha or any political subdivision.  Rather, this is setting the record straight on whether the action of Omaha elected officials was truly a tax increase.  In a Joe Jordan report on News Channel Nebraska, Omaha City Councilman Ben Gray vehemently defended the move, saying the City Council didn’t raise taxes.  They simply collected the money because the COUNTY ASSESSOR raised valuations.  He passed the blame on the county for raising valuations.

I spent eight years on the Omaha City Council so I know the political games played to avoid having a political mailer against you that said you raised taxes.  Councilman Gray and others say they “didn’t raise the levy.”

Well, that may be true, but if you keep more tax revenue than you did the prior year–whether through valuation increases or rate increases–you have raised taxes.  As I mentioned earlier, the prudent option would have been to give the tax windfall back to the taxpayer or own up that you have decided to prioritize increased spending.

The landscape I have described heightens the importance of LB103 passed last session which requires political subdivisions to hold a separate hearing from their budget hearing if they decide to spend the windfall associated with valuation increases.  Other than increased spending, the greatest catalyst of our property tax problem is the cumulative effect of valuation increases coupled with cities, counties, and schools spending the windfall instead of giving it back to taxpayers.

LB103 needs more teeth to increase awareness by taxpayers.  But at the end of the day, taxpayers across the state must not fall for this political speak by elected officials.  Rather, they must hold them accountable for raising taxes when they keep more of your hard-earned money.