A state senator who’s running for governor is sponsoring a bill to change the way agricultural land is valued for tax purposes. Senator Beau McCoy of Omaha wants to cut the median valuation of ag land from 75% to 65% percent over three years.
“Ag land provides 29% of all property tax revenue in the state which is up from 24% just a little more than a decade ago, back in 2002,” McCoy says. “Property taxes themselves account for about 45% of all tax revenue collected statewide.”
In discussing the issue before the legislatures’ Tax Modernization Committee, McCoy said Nebraska’s farmers are paying an unfair proportion of the property taxes.
“Agriculture producers are 3% of our state’s population yet they’re paying nearly 25% of total property taxes,” McCoy says. “I think that’s a situation that we need to remedy.”
Senator Kate Sullivan, of Cedar Rapids, is a member of the Revenue Committee and also chairs the Education Committee. Sullivan says property taxes are the number-two concern among rural landowners.
“They said they valued education,” Sullivan says. “They wanted more state aid into education and then to achieve property tax relief.”
McCoy acknowledges reducing taxes on ag land will affect the amount of state aid school districts receive, but he says it has to happen. He said his bill is the best way the state can have an impact on the level of property taxes, which are locally assessed and collected.
McCoy cited USDA statistics that show Nebraska ag producers are paying the third-highest total property taxes in the country, behind only Texas and California.
By Doug Kennedy, KWBE, Beatrice