The Truth in Taxation Act

In 2021, the Nebraska Legislature adopted LB 644, titled the Property Tax Request Act and more commonly dubbed the Truth in Taxation Act. The bill requires counties to inform their citizens of an increase in property tax from the year prior of 2.0% or more. The legislation also requires the counties to hold a public hearing where citizens can ask questions, express discontent, or air grievances about any increases.

Over the last few weeks, my office has been contacted by constituents asking questions about this process. Truth in Taxation was a major step toward transparency for Nebraska property owners and accountability for local taxing entities. As is common with any new law, there are pieces of LB 644 that need to be retooled and worked out. But overall, this law is a positive first step and guarantees citizens will be heard. If a subdivision raises property taxes by more than 2%, a notice of a public hearing will be mailed to the taxpayer. The hearing will take place in one location per county.

Unfortunately, a lot more pink paper was used in the first year of the Truth in Taxation law than was expected. Why is that? Put simply, inflation. The federal government has irresponsibly decided to deficit spend and then print money to make up for it. In Legislative District 38, several counties did not raise their property tax levy but your property taxes still rose. Recent reports from Washington D.C. indicate that the consumer price index (CPI), a metric that details the overall cost of goods and services, is up about 9% from 2021. You can see it when you go to fuel up at the pump, go to buy groceries, or go to the hardware store to purchase a 2x4. Even if you have made no renovations or upgrades to your property, inflation is still raising the value of your home. As your valuation increases, the amount of taxes you will owe will increase unless the levy decreases in a corresponding amount. Additionally, counties still have the same resource demands and needs for essential services, with inflation driving up these costs as well.

Truth in Taxation has revealed several effects that were already obvious to so many Nebraskans about our unfair property tax system. Showing transparency in our taxation process is putting pressure on Lincoln to rid Nebraskans of these often-hidden property tax increases. With the help of my colleagues, I hope to implement a broader-based or more consumption-based tax system.

I welcome any comments, questions, or ideas you may have on this or any other issue. Please feel free to email me at dmurman@leg.ne.gov or call my office at 402-471-2732.