Property Tax Christmas Tree Bill
April 6, 2023
Property tax relief has always been my number one priority in the State Legislature. Last Friday the State Legislature began debate on the Revenue Committee's primary property tax relief bill for 2023. Although LB 243 was introduced by Sen. Tom Briese of Albion, the Revenue Committee adopted his bill as a committee priority bill and amended several other bills into it, including one of my bills. So, today I would like to tell you about what the Legislature is currently doing to provide all Nebraskans with some much-needed property tax relief.
LB 243 increases funding for the Property Tax Credit Fund from $275 million to $388 million in 2024 and $428 million in 2025. The fund will increase incrementally until it finally reaches $560 million in 2029. The bill also requires revenue in the fund to grow over time in proportion to the overall statewide increase in assessed property values. Without this provision in the bill property tax relief would slowly diminish over time.
LB 28 is one of my bills which was amended into LB 243. LB 28 reforms the way that the Tax Equalization and Review Commission (TERC) conducts their business. TERC has been backlogged with appeals. I know one landowner who just received notice of a hearing for an appeal he filed in 2013! No one should ever have to wait ten years to get a hearing. Moreover, no one should have to pay property taxes for ten years based upon a wrongful and erroneous assessment of their property. Therefore, my bill reverts the assessed value of the property to the previous year's value until TERC makes a decision.
An amendment that I filed would help TERC get caught up on their backlogged cases. The amendment would add another member to the commission, tie the salaries of the commissioners to eighty five percent of the salaries of the supreme court justices for presiding officers and seventy five percent for non-presiding officers, and increase the cap on cases which can be reviewed by a single commissioner. Currently, properties that are valued at less than one million dollars may be reviewed by a single commissioner. My amendment would raise that cap to two million dollars in order to help expand the number of hearings that could be held each year.
Another bill by Sen. Tom Briese which was amended into the Revenue Committee's priority bill was LB 242. This bill would raise the amount of allowable funding for the Nebraska Property Tax Incentive Act to one billion dollars. Currently, funding for this income tax credit is limited to a five percent cap on the annual allowable growth percentage. The bill would remove this five percent cap so that the property tax relief created by this Act would be able to increase at the same pace as the annual growth percentage.
LB 309 by Sen. Eliot Bostar of Lincoln was also amended into the Revenue Committee's property tax relief bill. This bill raises the interest rate from nine percent to fourteen percent for unpaid balances owed to taxpayers by political subdivisions. This would match the interest rate that taxpayers have to pay to political subdivisions when they are late in paying their taxes.
LB 589 is another bill by Sen. Tom Briese which was amended into the bill. This bill would put a cap of three percent on a school district's revenue growth. However, the school board could override the three percent cap with a vote of seventy percent of the school board members or by sixty percent of the voters at a levy override election.
A final bill by Sen. Dave Murman, LB 783, completes the Revenue Committee's Christmas Tree bill for property tax relief. This bill removes the levy authority of the community colleges beginning in the year 2025. Although the community colleges would lose their levy authority, it would be restored in the event that the State could not fully fund the colleges.
While the Revenue Committee's property tax relief bill will provide taxpayers with some much-needed property tax relief, it does not fix our State's broken tax system. To make an analogy, each of these property tax relief bills is like putting a band-aid on an amputation. These fixes won't stop the profuse bleeding. Instead, I continue to believe that the only way to truly fix our broken tax system is to adopt the EPIC Option Consumption Tax. If you have not already done so yet, please visit our website at http://www.epicoption.org.