Gov. Pillen, state senators unveil Nebraska property tax relief legislation package

Published: Jan. 18, 2023 at 8:30 AM CST
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LINCOLN, Neb. (WOWT) - Gov. Jim Pillen welcomed a handful of Nebraska state senators to his news conference Wednesday morning to talk about further tax relief proposals they will be introducing during this legislative session.

Wednesday morning’s announcements come on the heels of three education bill proposals announced Tuesday aimed at investing in education and providing property tax relief.

Gov. Jim Pillen unveiled his tax relief plan today at the State Capitol.

State Sen. R. Brad von Gillen of Elkhorn said Wednesday that his bill proposes decreasing top individual and corporate tax rates to 5.84% in fiscal years 2023-24 instead of the planned two-year phase-in. That would level the business and individual tax rates to the same level and provide $78 million in new tax relief in the coming fiscal year, he said.

The adjustment would also improve Nebraska’s national ranking for income taxes from 29th to 25th for individual taxes and 32nd to 24th for corporate taxes.

State Sen. Kathleen Kauth of Omaha said she will be introducing a bill that would cease taxing Social Security income, providing $16.7 million in relief in the upcoming fiscal year.

State Sen. Lou Ann Linehan of Elkhorn said her two bills would cut individual and corporate tax rates to 3.99% by 2027. The plan gradually declines that rate, to 6.27% in 2023; 5.7% in 2024; 5.13% in 2025; 4.56% in 2026; and then to 3.99% in 2027. The change would put Nebraska in the top 15 of the lowest income-tax states.

“The importance of this to keeping business in Nebraska and recruiting business and recruiting millennials, and younger than millennials, can’t be overstated,” Linehan said at Wednesday’s news conference.

State Sen. Joni Albrecht of Thurston said she will be introducing the Agricultural Valuation Fairness Act. The bill would restructure property valuation for agricultural and horticultural land in Nebraska.

“It will change the tax valuation market-based valuation to an income-potential valuation,” relying on productivity and income potential of the land, she said. “The income-based taxation is sound policy and leads to a more fair and equitable assessment. This creates stability and predictability for agricultural assessments.”

The bill would also implement an Agricultural Land Valuation Committee to set up rate limits that would not increase more than 3.5% statewide and assess values that would be implemented by county assessors. Valuations would be guided by income and expense information from the USDA and University of University of Nebraska Department of Agricultural Sciences and Natural Resources, land surveys, and other reliable agricultural sources.

State Sen. Dave Murman said he will be introducing a bill that would affect community colleges, making the fiscal year 2025-26 the last year they can levy property taxes and 2026-27 the last year any community college area can levy those taxes. Instead, he said, funds would be distributed to those colleges by the state starting in 2027.

At that time, the state would determine the amount of aid given to the college by the state by using the amount of property taxes levied by the community college area in 2025 and adding 3.5%. Each year thereafter, the amount would increase by 3.5%, he said.

“Locally elected community college boards will stay in office but will not have the taxing authority that existed previously,” Murman said.

The Nebraska Department of Revenue would determine and certify the amounts, dispersing the funds in two payments, one before March 31 and the second before Aug. 31. The bill would not affect existing bonds, Murman said.

Had this tax law been in effect in 2021, Murman said it would have provided more than $250 million in tax relief.

Watch Wednesday’s news conference

Gov. Jim Pillen and several Nebraska state senators announced several property tax bills during a news conference on Wednesday morning, Jan. 18, 2023.