Home | State Tax Profiles | Tax Calendar | Locations | Client Connect Login

Nebraska Set to Tackle Tax Reform

by Rob Boxley, Chicago, December 2018

 

Property tax reform will be a major focus for Nebraska's 2019 legislative session, which begins in January. Nebraska has the seventh highest property taxes in the nation and lawmakers have struggled for several years to reduce the reliance on property taxes.

 

Budget Challenges Ahead

 

Past property tax proposals in Nebraska have relied on cutting state spending, capturing increased tax revenues from economic growth, and tightening limits on local government spending. Any plan to reduce property taxes in 2019 may be impacted by budget concerns.

 

The Nebraska Economic Forecasting Advisory Board predicts Nebraska will face a $232 million shortfall between projected revenues and estimated expenses for the next biennial budget. The shortfall is based on estimates that state spending will grow at 4.8% during the two-year budget cycle ending June 30, 2021 and there will be lower-than-average tax revenue growth. Board members said they believe the economy is strong but likely has peaked and will head into a recession in 2020 or 2021.

 

Get Real About Property Taxes

 

An Omaha-based think tank has come out in favor of raising other tax revenues to help achieve property tax reductions. The report by the Platt Institute concluded it would be politically impossible to cut state and local spending enough to provide significantly lower property taxes.

 

"There are very few palatable choices left on the table if state lawmakers want to collect new, stable revenue to pay for significant and immediate property tax reform," explained Sarah Curry, policy director at the Platte Institute.

 

Get Real About Property Taxes suggests broadening the sales tax for an equal swap with property tax reductions.

 

More than 340 people responded to the Platte Institute's questionnaire. The findings include:

 

  • 48% ranked property taxes as the most important priority for the Legislature

  • 61% said they would be willing to pay other taxes in exchange for lowering property taxes

  • 55% named sales taxes as the best source to help lower property taxes

 

One-third of the respondents said it would take a 20% cut in their property taxes for them to feel that lawmakers had addressed their concerns.