Counties, cities, school districts and community colleges seeking to increase the amount of property taxes they collect first would have to hold a joint public hearing under a bill advanced from general file April 7. Under current law, the governing bodies of nine different political subdivisions may increase their property tax requests after holding a public hearing called for that purpose and by passing a resolution or ordinance.
Under LB644, as introduced by Sen. Ben Hansen of Blair, those political subdivisions could increase their property tax requests only if they first participate in a joint public hearing. The bill would require counties to notify affected taxpayers of the hearing by postcard, the cost of which would be shared by the political subdivisions seeking to increase their property tax request.
Hansen said the large number of taxing entities in Nebraska makes it difficult for taxpayers to attend each one’s budget meeting. LB644 would require representatives from each political subdivision intending to increase property taxes to gather in one place, he said, improving communication between citizens and their local government. “A simple thing such as a postcard and a meeting with elected officials can go a long way with the public,” Hansen said.
The proposed hearing would be held after 6 p.m. between Aug. 20 and Sept. 20 and would be open to public testimony. Its agenda would include only the property tax request proposals. Under a Revenue Committee amendment, adopted 36-1, the joint hearing requirement would apply only to counties, cities, school districts and community colleges. If one of those political subdivisions includes an area in more than one county, it would be deemed to be within the county in which its principal headquarters are located.
Under the amendment, the hearing would be held on or after Aug. 20 and before Sept. 27 and before any of the participating political subdivisions file their adopted budget statement. The amendment also adds information to be printed on the postcard. It would include the property’s assessed value in the previous and current tax years, the amount of property taxes due in the previous and current tax years for each participating political subdivision and the change in the amount of property taxes due for each participating political subdivision from the previous tax year to the current tax year.
The postcard also would include the name of the county that will hold the joint public hearing, a listing of and telephone number for each participating political subdivision and the amount of each political subdivision’s property tax request. Sen. Steve Halloran of Hastings introduced an amendment, adopted 35-1, that includes his LB189. It would repeal a provision allowing political subdivisions to delay paying a refund of real or personal property taxes by declaring a hardship.
Under current law, if a political subdivision lacks sufficient funds to pay a refund, the county treasurer registers it as a claim against the political subdivision and issues a receipt to the person entitled to the refund. Halloran’s proposal would require the political subdivision’s governing body to make provisions in its next budget to pay the refund. It also would eliminate a current provision allowing political subdivisions up to five years to pay the refund.
Under the amendment, interest would accrue at a rate of 9 percent on the unpaid balance beginning 30 days after the entry of the final non-appealable order or other action approving the refund. Sen. Lou Ann Linehan of Elkhorn supported the Halloran amendment, saying taxpayers must pay political subdivisions 14 percent interest on delinquent property taxes. “It seems to me that it’s more than a little reasonable — if they’re not going to pay me back money they owe me — that they would pay me interest,” she said.
Linehan also supported LB644 and the committee amendment. Under Hansen’s proposal, she said, taxpayers for the first time would receive detailed information on how increasing valuations would affect their total property tax bill before political subdivisions adopt their budgets. If such a requirement had been in place in recent years, Linehan said, the Legislature might not be spending approximately $700 million in property tax relief over the next two years. “We have a messed up system, and this is a great step in the right direction,” she said.
Albion Sen. Tom Briese also supported LB644, saying the proposed postcard could be an “eye-opener” that encourages public engagement in the local budgeting process. He also supported Halloran’s amendment, saying a taxpayer who wins a valuation appeal should not have to “bankroll” their local government. “You should be able to get your money back,” he said. “And if you can’t, I think some interest is appropriate to encourage and incentivize the counties to get you paid back.”
Sen. John Arch of La Vista supported LB644 on the first round of debate but said he would work with Hansen to amend the bill on select file. Arch said he was concerned that property tax increases due to wage inflation or real property growth — particularly in Sarpy County — could trigger the proposed joint hearing. Arch also suggested that the state share the cost of creating and mailing the postcards.
Omaha Sen. Megan Hunt opposed LB644, saying it would impose an unfunded mandate on counties when many senators are focused on controlling local government spending. “I trust local elected officials to handle their business,” she said. “I don’t think that they need us to babysit them and make them do this when in Nebraska we are already very mindful of taxation and spending.” Senators voted 36-1 to advance the bill to select file.