Poll shows Nebraskans favor more action on property taxes

Poll shows Nebraskans favor more action on property taxes

Revenue Committee Chair Sen. Lou Ann Linehan is beginning to set an agenda for tax modernization in the 2021 Legislature.

In a news release from her legislative office, the Elkhorn-area senator pointed to a recent Tax Foundation report that provides backing for a number of policy ideas her colleagues have introduced, including requiring voter approval for increases in annual property tax revenues exceeding 3%, and sending taxpayers mailed notices about local hearings where property tax rates are decided.

Even those who disagree with Linehan acknowledge she holds firm and considered convictions about the direction of tax policy in Nebraska. Over the years, the Tax Foundation has also been a principled voice, willing to respectfully differ with legislators and the governor when they thought their proposals were on the wrong track.

Having political support and intellectual ammunition is all necessary given the difficult work of tax reform. But what about voters and taxpayers?

Last year, lawmakers adopted a major property tax relief package as part of LB1107. With the many difficulties of the COVID-19 pandemic and the need to recover from last year’s recession, it’s reasonable to ask if property taxes and other tax reforms still remain a high priority among Nebraskans.

In late January 2021, the Platte Institute conducted a telephone poll of 862 likely Nebraska voters. Click here if you’d like to read about the polling methodology and the full text of each question.

Although there is always room for voter sentiment to shift, the results confirm that Linehan’s recommendations, and those of many of her colleagues, largely line up with what most Nebraska voters are thinking.

The Nebraskans we heard from largely believe property taxes remain a problem, with many expressing concerns about whether they will be able to afford paying their property tax bill. The largest number of respondents said those concerns have been heightened by the events of the last year, and most believe the Legislature is right to be focusing on the issue, or is not yet doing enough.

As we’ll also see from the results, Nebraskans are open to a number of changes to state and local taxes. Let’s look at why that may be.

Property taxes still matter

It’s little surprise that property taxes remain the #1 tax on the minds of Nebraskans. Average local property taxes in Nebraska remain the 8th highest nationally. Among these respondents, 55% said property taxes were the tax they would want to see reduced.


Most Nebraskans remain concerned about being able to afford their property taxes, and with a total of 77% being either very or somewhat concerned about being able to pay the bill now or sometime in the future. Slightly less than a quarter of voters were not concerned or unsure.

The pandemic has changed daily life and many people’s habits and priorities, but voters were nearly equally likely to say the pandemic had either increased their concern about property taxes (43%) or that their level of concern remained the same as before the crisis. Only 8% said property taxes were less of a concern for them than before the pandemic.

Most Nebraskans polled here also felt the Legislature either has not focused enough on property taxes, or is giving the issue the right amount of attention. Only 16% said the Legislature has already focused too much on property taxes, while an equal percentage were unsure.

Voters favor more transparency and limits on property taxes

Certainly, it’s good to reconfirm what many already assume to be true about how Nebraskans feel about property taxes, but the real issue has always been what the voters are willing to do about them. To start that conversation, we asked these voters whether the highest priority is to cut property taxes or to hold the line on them. Respondents were evenly divided.

Digging deeper into these numbers, most Republicans felt cutting property taxes was the higher priority, while Democrats and independents tended to agree that preventing property tax increases was more important. Voters age 65 and older were more likely to think cutting property taxes was the priority, while women and younger voters thought reining in property taxes was more important.

While there are partisan and demographic differences on the respondents’ attitudes about taxes, who should pay them, and how urgent different proposals might be, there is also a lot of agreement across these groups when they are asked about some of the top issues before the Revenue Committee.

These latest results show most Nebraskans are not deterred by objections to reining in property taxes, even if those efforts only limit the growth in taxes, or provide more transparency at the local government level.

Sen. Linehan’s proposal to constitutionally limit the annual growth of property tax revenue to 3%, introduced on behalf of the governor, is considered controversial to many inside the State Capitol, but it wasn’t a tough sell with the clear majority of these voters, even though the full text of the question made clear that school districts and local governments have opposed the measure because of funding concerns. Sixty percent of respondents supported the cap, with 24% opposed.


The 3% limit achieved majority support with voters in every group surveyed, including 66% of Republicans, 50% of Democrats, and 62% of independents, who either strongly or somewhat supported the proposal. Voters who somewhat opposed the idea were statistically tied in the low double-digits in all three groups, while the 21% of Democrats who strongly opposed the plan exceeded Republicans by a 3:1 margin.

This means if a 3% property tax cap were placed before voters, the initiative would start with a very large advantage. That said, 60% support is not quite enough to get past a filibuster in the Unicameral, so state senators would have to support it even more than voters for it to be added to the ballot by the Legislature.

But there is one property tax reform that might just be filibuster-proof. We asked voters about their level of awareness about public hearings that are required if local boards want to adopt tax increases following a rise in property valuations. While a slight plurality of respondents (44%) said they were aware that these hearings were required under the law, the majority were unaware or unsure about their opportunity to participate.

When these same voters heard about a proposal requiring that taxpayers be notified about property tax hearings by mail, also known as Truth in Taxation, 77% of them supported the idea, with 52% strongly supporting the direct notification. Only 10% of voters were against it, while 13% were unsure. While there were slight variations among which voter groups strongly or somewhat supported Truth in Taxation, about three-quarters of voters gave overall support to the policy in every group, winning approval from 79% of Republicans, 76% of Democrats, and 77% of independents. Among women and voters between 45-64, support for directly notifying taxpayers about property tax hearings reached 80%.

On a similar issue of participating in government proceedings, these voters were also in strong support of allowing Nebraskans to speak at public meetings over virtual conferencing software like Zoom. In total 66% supported the idea, or about three times greater than the 18% who opposed it. The concept was particularly popular with women (74%) and younger voters (70%). Democrats were also more likely to favor online public comment, with 72% support.

Attitudes about major changes to Nebraska tax policy

Voters show strong support for additional limits on the growth of property taxes and for tools that keep them informed and engaged with how local tax increases are decided. But what will the same voters say if lawmakers want to make more fundamental changes to Nebraska’s tax system?

The results show the vast majority of voters are not overly-protective of the state’s current approach to its property tax relief programs. Seventy percent supported replacing the state’s current property tax credit programs with lower property tax rates and valuations. Notably, voters were almost twice as likely to be unsure (20%) as they were to be opposed (11%). Strong opposition was in the single digits for every category of voter.

Where voters begin to become more clearly divided is on questions of how to pay for proposals that seek major eliminations or reductions of taxes. We surveyed respondents on the general features of the consumption tax proposal before the Legislature this session. This is the most far-reaching tax policy proposal in Lincoln right now.

We asked voters: This year, Nebraska legislators will consider giving voters the chance to decide on a constitutional amendment to end local property taxes and state income taxes, replacing them with a sales tax, also called a consumption tax. The tax would be more than 10% and would be collected on purchases like new consumer goods, groceries, and personal services. If given the chance to vote on this constitutional amendment, would you support or oppose the amendment?

While there isn’t time to fit every aspect of the consumption tax plan into a single poll question, we get a good sense of what feelings different groups of voters have about this idea. The consumption tax is controversial, winning strong support from a core base of voters (21%), but even stronger core opposition (28%). After adding voters in the middle, total supporters are one point behind total opposition at 43%-42%, with 15% unsure.

The long and short of it is that the consumption tax does better than many people might expect (it does, after all, promise to get rid of property and income taxes, among others). It has some supporters on all sides, but the idea is divisive even among the Republicans we surveyed (45% support vs. 39% opposition), who are clearly eager for cutting taxes in other ways. While this poll doesn’t mean it’s impossible for the consumption tax to get on the ballot or become law in Nebraska, it does mean the headwinds it would face in a campaign environment would be tremendous. It would need exceptional backing to climb into a position of majority support and to stay there while voters mulled it over and were exposed to negatives from opponents.

However, these same voters responded positively to a number of other proposals that would switch or change the kinds of taxes we pay in Nebraska. We presented the respondents with an alternative: One alternative to the plan to fully eliminate property and income taxes would be to collect sales taxes on more goods and services without raising the sales tax rate, then use the new revenue to reduce Nebraska’s property and income taxes. Assuming this change did not cut support for programs like education and health care, would you support or oppose this proposal?

The majority of Republicans, Democrats, and independents supported this alternative, with overall support reaching 59%. Opposition was about 20% in every category, with roughly the same amount of voters unsure.

The devil is definitely in the details here, since even though opposition was not very strong overall, there are just about as many strong supporters as there are somewhat supporters. In previous polling we’ve done, voters seem to get worn down by hearing about all the different taxes they might have to pay to reduce their property taxes, leaving many to wonder if it’s not better to just leave well enough alone.

In this survey, voters were clearly more favorable to paying sales taxes as an alternative to property taxes than any other revenue source, with 27% favoring sales tax compared with 8% support for paying more income tax. But most voters still struggle to bite the bullet of committing to personally paying any taxes they’re not paying now, with a combined 52% saying they are unsure (29%) or that we should keep the types of taxes they pay the way they are now (23%).

Because property taxes are predominantly dedicated to funding school districts in Nebraska, most of the property tax reform conversation revolves around school funding. But voters are closely divided over whether the state taking over school funding would be the solution. Forty-six percent support a state takeover of most public school funding decisions if it means property tax reductions, while 40% are opposed. Fifteen percent remain unsure. The most noticeable difference between voters on this question does not seem to be partisan, but on the age of respondents. Fifty percent of voters age 65 and above favor a state takeover of school funding, while younger voters are slightly more likely to oppose it.

So, a lot of voters clearly want lower property taxes, but may not want to pay any new taxes. They want to be more engaged in the local process of how property taxes are decided, but may not be sold on the state calling the shots on education funding. How can policymakers decide on issues like this when voters give answers that might seem to be contradictory at times? Of course, representative government sometimes involves sausage-making that might sound unpleasant to constituents, but that nonetheless creates outcomes most people are happy with.

We’ve seen so far that Nebraskans overwhelmingly do want more limits on property taxes and that they are open to changing the state’s approach to property tax relief, which has been in place since 2007. As we can see from some additional responses provided, they see the benefit in making improvements to Nebraska’s tax system.

Other tax policy questions

Nebraska’s poor national ranking for property taxes is not just the consequence of high tax rates on land. The state also imposes a county inheritance tax and personal property taxes on business equipment. These taxes may not be top of mind for most taxpayers, but we decided to see if voters thought it would be to the state’s advantage to address them.

That 64% of voters thought doing something about the inheritance tax was very important was a surprise to me. I would have initially thought most people would consider it someone else’s problem, or a concern for another day, but in total, 91% of Republicans, 66% of Democrats, and 74% of independents thought reducing or eliminating Nebraska’s inheritance tax was very or somewhat important in light of the fact that only six states levy this tax.

We also asked voters about Nebraska’s personal property tax, which is mainly a property tax on business equipment. Most voters were receptive to reducing or eliminating this tax, with a total of 55% in support and 31% opposed.

Finally, we asked what voters would think if additional property tax policies were specifically tailored to help farmers, ranchers, or agricultural landowners. While this question doesn’t include all the nitty-gritty details, and about a quarter of voters oppose making changes that would only help ag, farmers and ranchers still enjoy good will among the majority of these voters, with 63% expressing their overall support.

Tax modernization is hard work and requires difficult choices, but so far the Revenue Committee is selecting a number of priorities that most Nebraskans share. To keep the conversation going, it will be important for policymakers to stay focused on the improvements and benefits they are working to deliver for their constituents, and where Nebraskans have already found common ground.

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