The Legislature’s Tax Modernization Committee held a hearing in Omaha on Thursday and the Nebraska Farm Bureau presented a plan that would help balance the tax structure and provide property tax relief. President Steve Nelson says the state’s tax structure relies to heavily on property taxes to fund government services and they have come up with a three year plan that would balance property, sales and income taxes for all residents.
The first year would reduce the agriculture land values from 75% to 65% of market and direct dollars into the property tax credit program. Year two the plan includes moving community colleges from the property tax rolls into the general fund. It also reduces the personal property tax on agriculture equipment and adjusts the homestead exemption. Year three would develop a taxing system on services and goods that currently are not taxed now as a way to divide the tax burden among all residents.
The plan specifically seeks to lower the property tax portion from 45 to 40–percent of the statewide tax burden which equates to roughly $405-million annually. Nelson says, “our reliance on property taxes didn’t happen overnight however this plan can reverse the trend of continuing to put more on the shoulder of property tax payers.”