Unsustainable

What to do about rising Nebraska property taxes?
Regardless of current commodity prices, the trend in recent years has been for property valuations to go up significantly, levies to drop slightly, and property tax bills to rise, particularly for area farmers. It’s a dilemma that’s been talked about for years, and should be high on the agenda again when Nebraska lawmakers convene in January for the 2016 session.
Here in Hamilton County, for example, the funding formula for too many taxing entities banks heavily on what has become an annual, expected rise in property valuations. There has been substantial new growth in recent years, which is a blessing many regions of the state and nation do not enjoy, though a majority of the increase can be attributed to rising ag land values.
Just 10 years ago, the county’s total valuation added up to $971.6 million. This year, that number came in at $3.11 billion, an increase of 320 percent in just a decade. In the last three years alone, valuation went up 10.5 percent, 27.3 percent and 21.2 percent, or a total of $1.37 billion.
Those are simply mind-boggling numbers, which, unfortunately, have nothing whatsoever to do with property owners ability to generate income.
It was encouraging to hear Dist. 35 Sen. Mike Gloor speak at a recent Nebraska Chamber of Commerce & Industry legislative forum here in Aurora. As chairman of the Revenue Committee, Gloor reported that there have been discussions this summer focused on the property tax issue, though he conceded that this will be an uphill battle, with push back coming from several directions depending on any suggested change toward sales or income tax resources.
At the core of the challenge lies the state’s K-12 school funding formula, which is a complicated plan. Gloor hinted that the focus in January may not be on rewriting the formula, but instead on how the dollars flow. We’ll be staying tuned to that discussion, hoping that lawmakers give it a serious look this year, rather than kicking the can down the road, again.
In the meantime, local taxing entities would be wise to drop the levies as much as needed to keep spending as close as possible to last year’s levels. Banking on valuation growth is simply not sustainable.
Kurt Johnson

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