August 29, 2014

Higher farmland valuations come on heels of disappointing legislative session

Assessment of agricultural land continues to rise, adding to the disappointment farm groups are expressing about the legislative session.

The Nebraska Department of Revenue’s Property Assessment Division reports the valuation of farmland for tax purposes rose nearly 30% between 2013 and 2014.

Nebraska Farm Bureau President Steve Nelson says the assessment report comes on the heels of a legislative session that talked a lot about reducing property taxes for farmers, but did little.

“We really thought this was going to be the year, because we had had the Tax Modernization Committee meetings throughout the state,” Nelson tells Brownfield Ag News. “They had heard the message loud and clear that property taxes are too high and, not only are they too high, but the balance between property tax, income tax, and sales tax was out of line.”

Legislators did add $25 million to the $115 million Property Tax Credit Fund. There were not enough votes to add another $20 million to the fund when an amendment to the state budget was proposed during floor debate.

A proposal to drop the assessed valuation of farmland in Nebraska from the current 75% of its market value to 65% of its market value failed to gain any traction in the legislative session.

Nelson says too much of the tax burden falls on the shoulders of Nebraska farm families.

“Three percent of Nebraskans, farmers and ranchers, pay 25% of the property tax in the state. So, there’s not a balance there and we need to address that issue. We believe that there was support to do that, a lot of talk about that, good support from the governor,” according to Nelson. “Part of the disappointment is that it seemed like things had lined up that we could get something done.”

Nelson says that with the latest increase, the assessed valuation of farmland in Nebraska has doubled since 2009. The Nebraska Farm Bureau estimates statewide property taxes paid by farm families will near $1 billion next year, which would rank third highest in the United States.

The Nebraska Department of Revenue, Property Assessment Division reports that, overall, the assessed valuation of agricultural land statewide rose 29.12%. The increase varies significantly from county to county. The assessed valuation of farmland in Chase County, located along the Colorado border, grew 58.48%. In Clay County, farmland values jumped 49.95%; in Kearney County, farmland values rose 49.91%. Clay County is located toward the southeastern part of the state. Kearney County is located in south-central Nebraska, not far from the Kansas border.

Ken Anderson, Brownfield Ag News, contributed to this story.