Lower agricultural land valuation proposed

Owners of agricultural land would see lower property taxes under two bills heard by the Revenue Committee Feb. 19.

Currently, agricultural and horticultural land is valued at 75 percent of its actual value. LB293, introduced by Scribner Sen. David Schnoor, would decrease valuation to 65 percent of actual value for agricultural and horticultural land.

Schnoor said that his bill would address the challenge of skyrocketing agricultural and horticultural land valuations.

“Economies are fluid; the only constant is change,” he said. “The agricultural industry is subject to change in perhaps a more dramatic manner than most industries. [LB293] would create a more stable source of funding going forward.”

An identical proposal was introduced by Bancroft Sen. Lydia Brasch as LB350, which she said would realign the property tax burden.

“We are out of alignment and our collective responsibility to share the tax burden has shifted to farmers,” she said. “This represents meaningful, responsible, significant and fair tax relief.”

The current acceptable range of taxation of 69 to 75 percent would decrease under both bills to 59 to 65 percent.

The bills also would decrease the current adjusted valuation for school state aid from 72 percent to 62 percent, decreasing total aid by $13.5 million in fiscal year 2017-2018 and $14 million in FY2018-19.

Nebraska Farm Bureau President Steve Nelson testified in support of the bills, saying they would provide targeted tax relief by treating farmers and ranchers equally statewide.

“Farmers and ranchers located in counties with a low percentage of agricultural land—counties that are often at their levy limit—end up paying higher taxes than their more rural counterparts,” he said. “Reducing taxable values to 65 percent would target tax relief where it is most needed.”

Robert Johnston, representing the Nebraska Soybean Association, also spoke in favor of the bills.

“The last two or three years [farming and ranching] have been very profitable, but high land values and valuations do not guarantee profitability,” he said.

Platte County Assessor Tom Placzek opposed the bills, saying they would not lead to measurable tax relief.

“I and many of my [county assessor] colleagues feel [the bills] will not really achieve anything,” he said. “Urban tax districts won’t be affected because they don’t have any farm land and rural districts won’t really be affected because there is very little to no residential property to shift the tax burden to.”

Renee Fry, executive director of the OpenSky Policy Institute, also testified in opposition. She said the bills would result in significant revenue losses for municipalities.

“[LB293 and LB350] would result in a $138.5 million shortfall for Nebraska’s localities,” she said. “Revenue losses will likely lead to cuts to services or higher property taxes for many Nebraskans.”

The committee took no immediate action on the bills.

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