Truth-in-Taxation Bill Moving Through Nebraska Legislature

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Posted by John Neher on Monday, April 26th, 2021, 2:40 PM PERMALINK

A Nebraska lawmaker is aiming to better inform taxpayers about potential tax increases that have historically been approved without warning to constituents. State Sen. Ben Hansen recently introduced LB644, a proposal that requires that local boards directly notify every taxpayer about public hearings discussing any proposal to increase property taxes. This legislation will create a further commitment to sound tax policy and offer more clarity to the taxpayers of the Cornhusker State.

Sen. Hansen models his initiative behind Utah, who was the first to pass ‘Truth-in-Taxation. When Truth-in-Taxation passed in 1985, Utah ranked 24th in the nation in property taxes per $1,000 of personal income. Utah now ranks 36th. Nebraska ranks 12th in property taxes per capita. Nebraska's effective property tax rate is higher than in most states, and partially as a result, property taxes account for 38.2% of the overall state and local tax revenue, well above the 31.9% national average. Sen. Hansen also says his bill would increase transparency and give elected officials pause before raising taxes. Illinois, Texas, Minnesota, and Arizona have also implemented versions of this law.

The State of Nebraska currently requires local governments to hold public hearings before property taxes are to be increased due to a rise in property valuations. A previous bill, LB103 which was passed by lawmakers in 2019, required these public hearings to be posted in the newspaper at least five days before the hearing. These notices have widely gone unnoticed by the public which all too often resulted in government boards increasing taxes with little input from taxpayers. The Platte Institute of Nebraska recently conducted a poll of Nebraskans about this matter and found that almost 40% were not aware that public hearings were to be held before an increase in property levies. The same poll found that 77% support being directly notified via mail of such public hearings. The results of the poll show that more members of the public would like to be included in the local process and voice their own thoughts about property tax initiatives. 

Sen. Hansen’s bill aims to directly bolster the power of LB103 and provides a real ‘Truth-in-Taxation’ law by directly notifying the public. LB644 will require that a postcard be sent out via mail directly to constituents and notify them about public hearings and board votes for local property tax increases. The Platte Institute of Nebraska, who is a major proponent of this bill, states, “With a proposed committee amendment, LB644 would provide taxpayers with a stronger voice in how local property taxes are decided by providing the date, time, and location of a joint public meeting where proposed property tax increases from counties, cities, school districts, and community colleges will be decided. Each resident would be provided at least three minutes for public comment at the hearing. Subdivisions must explain how much a property taxpayer’s tax bill would rise if the proposed tax increase were approved, and hold the joint public hearing after 6 p.m. on a date between August 20 and before September 20, allowing more taxpayers the opportunity to attend these public meetings.”

 

If you would like to read the Platte Institute’s full testimony in support of this bill, click here. 

Photo Credit: Manoj Kumar

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