Governor’s property tax relief plan backed by sound premise
“Ultimately, what we have to do is figure out how to grow our state. If we’re going to grow Nebraska, we have to grow our number one industry -- agriculture.”
I couldn’t agree more with the message Gov. Pete Ricketts shared last week at the Aurora Cooperative’s annual meeting in Grand Island. He was preaching to the choir of course with an ag-based audience, but his message was spot on, as was his proposed strategy to make it happen.
Providing real and sustainable property tax relief has been talked about for years in our great state, but the need for turning words into reality has perhaps never been more pressing than it is right now. Ag income is down from $7.5 billion in 2012-13 to a projected $4 billion this year, causing a ripple that has created a $350 million statewide revenue shortfall in this one budget year alone.
Those are huge numbers; staggering numbers, with dire consequences. Thus the governor and Nebraska’s 49 senators deserve our rapt attention in the weeks ahead as they discuss bills and strategies to adapt accordingly.
The Agriculture Evaluation Fairness Act (LB 338) looks logical on paper, as it would change the way ag land valuations are figured to an income potential system rather than recent market sales. That seems not only fair, but consistent with what other Midwest states are doing. The kicker, of course, is what that change would do to the state’s tax structure.
Complicating the math even more is Ricketts’ proposal to lower the state’s income tax rate as well. At first glance, that seems impossible, but his logic is sound. In order to build a coalition between urban and rural senators, he believes a slow, steady income tax rate cut, with a trigger dictating that cuts can only be implemented if revenue is growing by 3.5 percent or more, is a must. In other words, he argues, you can’t have one without the other.
It’s a complex, fundamental change to the system, and with the governor’s vow not to raise taxes as part of the solution lawmakers have a lot of work to do to make the math work.
I’ve read several reports on why this change wouldn’t work, but the one premise all should agree on is that Nebraskans need our ag economy to grow and prosper.
That won’t happen without property tax relief.