Report shows property taxes up in much of Nebraska -
Published Saturday, January 18, 2014 at 12:00 am / Updated at 2:24 am
Report shows property taxes up in much of Nebraska

LINCOLN — Gov. Dave Heineman chastised local governments Friday for driving up property taxes with increased spending.

The governor commented after the Nebraska Department of Revenue’s Property Assessment Division released a report showing that property taxes grew an average of 5.22 percent statewide in the past year.

Property taxes increased in all but four counties, the report showed. Twenty-five had double-digit increases. The highest increase was in Sioux County, where property taxes grew 19.77 percent. The largest reduction was in Hitchcock County, where property taxes fell 2.87 percent.

Heineman said the report shows local government spending “is increasing too rapidly.”

“The latest property tax report shows property taxes are increasing because local government spending is increasing too rapidly,” he said. “We need our partners in local government to slow the rate of growth in local spending to achieve real property tax relief.”

Statewide, property taxes for local governments totaled $3.4 billion in 2013, up from $3.231 billion in 2012.

The increase amounted to $169 million statewide.

Ruth Sorensen, the state property tax administrator, attributed 73 percent of the growth to taxes on existing property, 20 percent to taxes on new construction and 7 percent to voter-approved bonds.

The tax bills for individual property owners vary depending on the property values and the levies set by their local governments.

Sioux County Assessor Michelle Zimmerman said she was surprised to find Sioux County, whose largest city is Harrison, listed at the top of the annual property tax report.

“We usually don’t change this much,” she said, adding that she hoped 2013 was an exception.

She attributed the increase to 25 percent growth in the Sioux County Public Schools budget and an 8.2 percent jump in property values.

In Phelps County, a May decision by Holdrege voters to approve the construction of a $13.9 million elementary school accounted for much of the 17.33 percent increase in taxes, the county assessor said.

The county had the third-highest percentage increase in property taxes across the state.

County Assessor Melodie Marvin said about 65 percent to 75 percent of the additional taxes will go to schools, including a special building fund and ramped-up education services for teachers.

Keya Paha County was one of the four counties with lower property taxes. Taxes decreased even though property values on irrigated lands shot up 30 percent. Property values countywide increased 14.37 percent over the period.

County Assessor Suzy Wentworth said a fire levy expired in 2012, leaving the county spending less than in previous years.

“The county tries really hard to keep our budget the same or lower it,” Wentworth said. “We try not to spend any money that we don’t have to.”

Real property valuations are determined by county assessors.

Levies are determined by property valuation and the budgets of schools, counties, cities, community colleges, natural resource districts, fire districts and other local government subdivisions that rely on property tax support.

Nebraska’s large urban counties had among the smallest percentage increases in property taxes. The increase was 2.32 percent in Douglas County, 3.5 percent in Lancaster County and 2.47 percent in Sarpy County.

The three also had among the smallest increases in property valuation.

Rural counties saw the largest tax increases, made possible by steeply rising valuations on farm and ranch land. Across the state, agricultural land values jumped 22.93 percent, while residential values increased only 1.51 percent.

The valuation increases allowed property tax levies to drop in 83 of Nebraska’s 93 counties even as total property tax bills grew. Property taxes on agricultural land went up more slowly than the valuation.

State Sen. Galen Hadley of Kearney, chairman of the Revenue Committee, said he had not studied the property tax report yet and could not comment.

Hadley led the Legislature’s Tax Modernization Committee, which concluded last month that property taxes are too high and that reducing them should be a top tax priority. However, the group could not agree on how to go about the task.

In his State of the State speech this week, Heineman called for lawmakers to reduce the assessed valuation of agricultural land from 75 percent of market value to 65 percent.

Contact the writer: Martha Stoddard    |   402-473-9583    |  

Martha covers the Nebraska Legislature, the governor, state agencies, and health, education and budget issues out of our Lincoln bureau.

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