Additional property tax relief measures considered

A bill to remake a major property tax relief program was among several proposals heard Aug. 2 by the Revenue Committee.

LB69, introduced by Sen. Danielle Conrad of Lincoln, would rename and modify the Property Tax Credit Act, under which the state disburses funds to counties to be used for property tax credits.

The new Property Tax Assistance Act instead would provide relief in the form of a homestead exemption. Under the bill, a dollar amount equal to a percentage of the assessed value of a homestead would be exempt from taxation beginning with tax year 2025. The percentage would be applied statewide and determined annually based on appropriations to the fund.

LB69 would end required annual increases to the minimum amount of relief provided under the program, which is set at $430 million for tax year 2025. Conrad’s proposal would require the state treasurer to transfer $90 million in general funds to the new program next year.

Conrad said out-of-state landowners receive approximately 40% of the relief provided under the current program. By instead targeting those resources to Nebraska homeowners who most need them, she said, lawmakers could avoid the “divisive political battles” arising from the proposed sales tax increases that would fund Gov. Jim Pillen’s property tax relief proposal in LB1.

“This would be one idea to figure out how not to increase taxes on Nebraska families and businesses but to repurpose existing dollars in the budget to help Nebraskans first,” Conrad said.

Among the other proposals considered by the committee were:
• LB67, sponsored by Omaha Sen. Justin Wayne, which would end the property tax levy for natural resources districts beginning with fiscal year 2025-26;
• LB75, introduced by Sen. Mike McDonnell of Omaha, under which Nebraska residents who have owned a homestead in the state for at least 40 years could receive a full property tax exemption; and
• LB80, sponsored by Lincoln Sen. Jane Raybould, which would include an exception for public safety expenses in a proposed cap on city and county property tax request increases, among other provisions.

The committee took no immediate action on the bills.