Nebraska Lawmakers Pass Property Tax Reduction Bill Amidst Special Session

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Nebraska lawmakers wrapped up their special session this week with the passage of a significant property tax reduction bill, now signed into law by Governor Jim Pillen. The bill, which aims to ease the tax burden on property owners across the state, particularly benefits Nebraska farmers who have been grappling with rising property valuations.

Mark McHargue, President of the Nebraska Farm Bureau, highlighted that lawmakers chose to exclude a controversial sales tax on agricultural inputs from the final legislation. "It was just poor tax policy. It was pyramiding," McHargue explained. "We worked hard to ensure that it was pulled out of the bill so it wasn’t part of it." This decision was welcomed by the agricultural community, which had expressed concerns about the potential financial strain the tax could have imposed.

The new law comes at a crucial time, as recent estimates from the 2024 Preliminary Property Tax Valuation report showed that 57 of Nebraska's 93 counties experienced double-digit increases in property valuations. This surge has posed significant challenges for farmers, especially in a year where income from grain production has been below break-even levels. "We’re still going to have to pay the property tax bill, regardless of whether we make any money or not," McHargue added, underscoring the pressures faced by the farming sector.

The legislation also introduces refundable income tax credits to offset school property taxes, with provisions to cap the taxing authority of cities and counties. While these income tax credits were previously available, they were only accessible to those who filed for them. The new bill streamlines this process, automatically applying the credits, which should simplify tax relief for many residents.

Governor Pillen has indicated that there will be no further special sessions this year to address property tax relief, but he has committed to revisiting the issue during the 2025 legislative session. Meanwhile, the Nebraska Farm Bureau plans to collaborate with lawmakers to continue developing strategies for sustainable property tax relief.

This law represents a significant step toward addressing the property tax concerns that have long been a point of contention in Nebraska, offering a measure of relief to property owners while setting the stage for future legislative efforts.