Taxes, reserve topics of legislative update

McCOOK, Neb. – The perplexing problem of increasing state coffers, as well as a bill that is meant to provide transparency in property tax requests, were topics of discussion at Thursday’s legislative update with Nebraska Sen. Dan Hughes.

Property taxes: LB644 won first-round approval 36-1 on Wednesday. Introduced by Sen. Ben Hansen, Blair, the bill requires cities, counties, school districts and community colleges to hold a joint public hearing if they plan on increasing the amount of property taxes they wish to collect.

Notification for the hearing would go to property owners in the form of a mailed postcard and would contain several pieces of comparative information about previous and current tax years including the property’s assessed value, the amount of property taxes due for each participating political subdivision, and the change in the amount of property tax due for each participating political subdivision.

The hearing would take place in the evening sometime between Aug. 20 and Sept. 20 and would be open to public testimony. The agenda would be limited to only the property tax request proposals.

The cost of producing and mailing the postcard notice would be shared between the political subdivisions that plan on increasing their property tax requests. The Legislature did debate having the state pick up the cost for the notification, but Sen. Hughes said that proposal would not gain approval.

Sen. Hughes voted in favor of the bill, although he said there would be amendments in upcoming rounds. He said the personalized information on the postcards would help taxpayers understand the correlation between valuations, levies, and local spending, which ultimately affects the property tax due. City Councilman Gene Weedin asked Sen. Hughes if limiting valuation increases was something the Legislature would consider. Sen. Hughes said that doesn’t work well over time, and that just because there is a valuation increase doesn’t automatically mean that property taxes would go up.

Budget: Starting Thursday, the Legislature began debating the budget. While the proposed budget is a little less than $10 billion over the next two years, Sen. Hughes said there is at least $211 million additional available for special projects beyond the budget. Because revenues for March followed recent trends and came in above projections, the $211 million could be a conservative estimate.

“That does not mean that we’re going to spend all of that money,” Hughes said, explaining that the additional funds would go into the “rainy day” fund if they choose not to spend it. “If we are going to spend it, giving it back to the taxpayers -- the people who provided it -- would be a top priority.” Sen. Hughes said the tax relief to citizens could come in the form of increased state aid to schools, which would provide property tax relief to citizens; or it could be provided through cutting or eliminating income taxes on military retirement income or social security income.

He said returning money to taxpayers in the form of a rebate is preferable to an income tax cut. “The challenge we have is if you give an income tax cut, that becomes permanent. It’s unlikely to be raised back up, so if at some point you begin to run short of revenue . . . raising taxes is pretty hard to do in this position.”

More money: In addition to revenues trending upward, the state will be receiving COVID Relief funds from the federal government. Sen. Hughes said those funds are additional dollars flowing into the state, which will be shared with cities, counties, and school districts.

“There’s going to be a lot of opportunity to spend money,” Sen. Hughes said. “And we’ve got to be very careful not to spend it on things that are going to require ongoing operating costs. Because we all know that our good fortune will turn around at some point.”

Other topics: McCook Economic Development Corp. Executive Director Andy Long encouraged Sen. Hughes to support LB40 and LB208.

LB40, introduced by Sen. Mike Groene, North Platte, is the Rural Development Projects Act, and provides incentives to develop industrial rail access business parks in communities of less than 100,000 in population.

LB208, introduced by Sen. Mike McDonnell, Omaha, boosts funding for development districts. Long told Sen. Hughes that in rural parts of the state, development districts make a huge difference in providing expertise for housing initiatives and nuisance abatement.

McCook City Manager Nate Schneider told Sen. Hughes that he appreciated the assistance of the Nebraska Department of Transportation Aeronautics Division; saying personnel provided the city with assistance in the initial stages of developing an Airport Layout Plan.

Schneider went on to say that federal funds will cover all of the $400,000 cost for developing the plan, which has not been updated for 40 years.