Nebraska Gov. Pete Ricketts is considering a proposal to change the way agricultural land is taxed to help farmers dealing with low crop prices.<\/b>
\nNebraska Gov. Pete Ricketts is considering a proposal that would change the way agricultural land is taxed to provide relief to farmers who are struggling amid low crop prices.
The governor floated the idea last week as a way to prevent property taxes from sharply increasing even as the state’s agricultural economy is having troubles. A similar bill stalled in the Legislature in 2017, but Ricketts said he doesn’t think it was fully debated or understood.
\u00ab\u00a0I still think it’s a good idea,\u00a0\u00bb Ricketts said in an Associated Press interview. \u00ab\u00a0People have had a chance to think about it and look at it, and I think that gives us more of an opportunity to get that passed.\u00a0\u00bb
Nebraska now relies on a market-based system when valuing agricultural land, unlike most Midwestern states that levy based on the potential income a property can generate. Iowa, Illinois, Indiana, Kansas, Ohio, Wisconsin and the Dakotas all use the latter and typically charge less in agricultural property taxes than Nebraska.
Under Nebraska’s system, farmland is assessed based on the market price of nearby land parcels that have recently been sold. Investors in recent years have bought such land at a premium, raising property values for the surrounding area even when commodity prices have fallen. The soaring land values result in higher taxes.
Fresh off his win in Tuesday’s election, Ricketts said cutting taxes and promoting business growth will remain his top priorities for his next four years in office. He said the Legislature \u00ab\u00a0has been the obstacle\u00a0\u00bb to reducing property taxes because lawmakers have rejected his proposals, but he pledged to continue working with lawmakers.
Some senators have blamed Ricketts for not accepting their ideas.
Sen. Steve Erdman, a retired farmer from Bayard, criticized the governor’s tax package in April as \u00ab\u00a0too little, too late\u00a0\u00bb for property taxpayers and called it \u00ab\u00a0one of the most ridiculous pieces of legislation I have seen in my life.\u00a0\u00bb
Now, Erdman said he’s working with the governor’s staff on a bill that would tax agricultural land based on its potential income instead of its market value.
\u00ab\u00a0A lot of people are buying for purposes other than farming it,\u00a0\u00bb Erdman said. \u00ab\u00a0It seems very unfair to value 99 percent of ag land based on what happens to 1 percent of it.\u00a0\u00bb
Ricketts said he was also interested in the work done by a group of senators who were looking for ways to change Nebraska’s aid formula for K-12 public schools, a major driver of property taxes.
\u00ab\u00a0There’s not going to be one silver-bullet answer to solve this,\u00a0\u00bb he said. \u00ab\u00a0Part of my job is to try to bring together (urban and rural senators) on property taxes and find something we can agree on.\u00a0\u00bb
One prominent agriculture group, the Nebraska Farm Bureau, stopped short of endorsing the proposal but left open the possibility. Spokesman Craig Head said the group’s members haven’t yet approved a policy agenda for next year’s session, \u00ab\u00a0but property tax reform is still a high priority for us.\u00a0\u00bb
Other rural senators said they support the concept but didn’t think it addressed the immediate problem facing rural landowners.
\u00ab\u00a0It doesn’t really fix anything,\u00a0\u00bb said Sen. Mike Groene, of North Platte. \u00ab\u00a0Twenty years ago it would have been the answer, because it would have prevented these huge valuation increases we’ve seen. Over the long range it works, but we don’t have time for the long range.\u00a0\u00bb
Groene said the proposal would shift the tax burden to other property owners within a county or school district. Local governments that can’t collect additional revenue because of the policy could compensate by raising their levies \u2014 putting farmers back in the same predicament.
Groene, a blunt-spoken fiscal conservative who owns farmland, said he was fine-tuning a different proposal to address the taxes levied by public schools.
\u00ab\u00a0We have to do something, or else I’m going to leave this damn state,\u00a0\u00bb Groene said. \u00ab\u00a0I’m sick of this.\u00a0\u00bb<\/p>\n

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