Will Farmland Owners Pay Higher Property Taxes in 2014?

As 2013 winds down, farmers and landowners turn their attention to the Nebraska Legislature, which convenes for another Legislative Session in January. One of the main issues that the legislature will discuss is the need for property tax relief, a Landowner Property Taxtop concern of not only farmers and landowners, but also of Nebraskans as a whole. What is the outlook for property taxes in 2014? Will farmers and landowners finally see some relief?

Nebraska Farm Bureau president Steve Nelson hopes so, and he led a committee that presented a multi-year tax relief plan in October. The plan would reduce the state’s reliance on property taxes to fund government services and strive to better balance the contributions from property, income, and sales taxes. Its overarching goal is property tax relief, and Nelson hopes that property tax relief will be the main focus of any comprehensive tax reforms proposed in the Legislature.

Nebraska property taxes comprise 45% of all the taxes collected statewide, and the reliance on property taxes has steadily been mounting since the 90s. Farmers and landowners are increasingly feeling the pinch each year. According to the Nebraska Farm Bureau, agriculture land owners comprise roughly 3% of the population, but pay about 24% of the total property taxes across the state (“Nebraska Farm Bureau Plan Seeks to Balance Tax Structure, Provide Property Tax Relief.” Online posting. Farm Bureau –. N.p., 17 Oct. 2013. Web. 16

Dec. 2013). One part of the Nebraska Farm Bureau Committee’s plan would be to reduce the value of agricultural land for tax purposes from 75% to 65%, among other ideas for tax relief.

The Nebraska Farm Bureau committee presented its plan to the Nebraska Legislative Tax Modernization Committee, which also just released its own conclusions and recommendations. The Tax Modernization Committee was formed at the end of the last legislative session, its goal to study tax reform options and present their recommendations for the 2014 session.

In a report released Friday, the committee recommended no major changes. “The report says taxes are higher than average in some areas. Property taxes are greater than both the national average and that of most of Nebraska’s bordering states. Lawmakers also concluded that income tax brackets have not kept pace with inflation.” (Young, JoAnne. “Tax Modernization Committee Makes Recommendations, Some Members – KHGI-TV/KWNB-TV/KHGI-CD-Grand Island, Kearney, Hastings.” Tax Modernization Committee Makes Recommendations, Some Members – KHGI-TV/KWNB-TV/KHGI-CD-Grand Island, Kearney, Hastings. Lee Enterprises, 15 Dec. 2013. Web. 16 Dec. 2013.)

Four members of the committee have refused to sign the committee’s report, and two of these four members are seeking Governor Heineman’s seat. Charlie Janssen and Beau Mccoy each say that a greater need for more overall tax relief—including both property and income tax relief—and less spending is necessary, and Janssen plans on releasing his own alternate proposal.

In the meantime, committee chairman Galen Hadley did stress that despite no recommendations for major changes, there would still be a focus on property tax relief. This will come as welcome news to farmers and landowners across Nebraska. However, it is anyone’s guess as to if this relief will actually materialize, and if so, how quickly it may come. For now, all eyes will be on what transpires during the 2014 Legislative session.

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