Constitutional property tax cap, other measures proposed

Proposals that would change how real property is valued and taxed in Nebraska were among those considered by the Revenue Committee Aug. 1.

Under LR6CA, sponsored by Sen. Kathleen Kauth of Omaha, Nebraska voters could change the state constitution to limit the annual amount of taxes owed on real property to 1.5% of its full cash value. Yearly increases in the full cash value would be capped at 2%.

Kauth said the proposal is similar to California’s Proposition 13, enacted by voters in 1978, which limits taxes to 1% of a property’s assessed value and caps annual valuation increases at 2%.

Enacting similar limits in Nebraska would give prospective homebuyers certainty about their property tax bill and prevent large valuation increases for neighboring properties when a house sells for a price that is much higher than its assessed value, she said.

“This is ultimately extraordinarily fair,” Kauth said. “It lets people make a choice about what they can afford.”

Also heard by the committee were:
• LB34, introduced by Gordon Sen. Tom Brewer, under which the assessed value of real property for 2025 through 2028 would be the same as it was on Jan. 1, 2024, plus the cost of any improvements made and minus any improvements that were removed or destroyed during the year;
• LB41, sponsored by Sen. Jana Hughes of Seward, which would increase the tax on the wholesale price of electronic nicotine delivery systems from 10% to 40%; and
• LB44, introduced by Lincoln Sen. Eliot Bostar, which would increase Nebraska’s refundable credit based on the federal Earned Income Tax Credit from 10% to 20% beginning with tax year 2025.

The committee took no immediate action on the proposals.