LB829 is the number assigned to my, Sen. Steve Erdman’s, property tax relief bill. LB829 will allow taxpayers to get a 50 percent credit or refund on that portion of their property tax bill which goes to fund public education when they file their Nebraska state income taxes. For most taxpayers, LB829 will result in a 30 percent reduction in their property taxes.
LB829 is necessary because property taxes in Nebraska have been running out of control. According to the Department of Numbers, Nebraska’s real median household income remained stagnant near $57,000 between the years of 2005-2016. However, the per capita property tax burden rose from $1,150 in 2004 to $1,550 in 2011. That’s a difference of $400 or 25 percent within a time span of only seven years while household incomes remained steady. This year the median property tax bill in Nebraska is $2,164.
In recent years rural areas of our state have been hit particularly hard. For example, I live in Morrill County and according to the Nebraska Department of Property Assessment and Taxation the total amount of property taxes levied in Morrill County in 2006 was $7,390,027, but by 2016 that number had climbed to $17,569,558. That’s an average increase of more than $1 million per year in a county with only 5,042 residents, according to the 2010 Census. So, property taxes have been rising at an alarming rate while median household incomes have remained stagnant.
Recently, an editorial appeared in the Omaha World-Herald challenging the constitutionality of LB829. The editorial criticized my bill by claiming that the Nebraska Constitution gives no authority to the Legislature “to commute taxes or release taxpayers from their duty to pay taxes.” But, this criticism of LB829 is wrong.
The proposition that the Legislature lacks the authority to release taxpayers from their duty to pay taxes ignores what LB829 actually says. LB829 does not release taxpayers from paying their property taxes; all taxpayers will pay their property taxes the same as before. What LB829 does, however, is offer a credit or a refund to taxpayers on a portion of their property taxes which goes to fund public education. So, I welcome my opposition to challenge my bill in court.
The Legislature has the power to change the way people get taxed. If the assertion made by these editors of the Omaha World-Herald was ever deemed to be true, then wouldn’t the TIF laws all be declared unconstitutional? Furthermore, if this criticism of my bill was ever sustained by the courts, then there would be no recourse for the Legislature to ever get rid of a bad tax.
Contrary to the editorial, I believe the Legislature has the authority to correct these kinds of wrongs. I also believe that the citizens of our state form our state’s second legislative house. As our state’s second legislative house, the citizens have the right to decide for themselves how they should get taxed through a provision made in the Nebraska State Constitution known as the citizen-led initiative. This year you will have the opportunity to sign our petition to put this measure on the November ballot.
The editorial in the Omaha World-Herald went on to challenge LB829 again, but this time it did so on the grounds of violating “the Constitution’s equal protection and due process provisions.” The editorial criticized LB829 because only those who file a Nebraska state income tax return would be able to benefit from the income tax credit or refund offered by the bill. But this criticism, too, is wrong.
This second criticism lodged against LB829 ignores the fact that all laws discriminate to some degree. For instance, speed limit laws discriminate against speeders as well as against those who don’t own automobiles. Just as our speed limit laws do not obligate the state to provide motorists with vehicles, so also my tax relief bill is not obligated to provide property tax relief for those who do not file a Nebraska state income tax return.
The truth about the 14th Amendment is that the Equal Protection Clause simply requires lawmakers to provide a good reason or a rationale for the law being proposed. Consequently, the justification I am proposing for LB829 is that property taxes have been rising at a much faster pace than average household incomes. The burden of continuously rising property taxes has now become unbearable for far too many property owners, and I believe that is ample justification for the Legislature to pass my bill.