LINCOLN (AP) — Farmers and ranchers from across Nebraska tried to convince state lawmakers Friday that taxes on agricultural land in the state are too high.
They heard no disagreements from members of the Legislature's Revenue Committee.
But they didn't hear any agreement on what to do about it.
There were plenty of ideas, though.
One that garnered a lot of attention was perhaps the simplest: lowering the tax.
In Nebraska, taxes on agricultural property are capped at 80 percent of market value, compared with residential and commercial property, which can be taxed at 100 percent of value.
Keith Olsen, who farms in Perkins County and represented the Nebraska Farm Bureau, suggested that percentage should be lowered for agricultural land. He did not have a suggestion for how low it should go.
Speaker of the Legislature, Doug Kristensen, said lowering the percentage may be the most workable option.
There are other choices.
Olsen and others suggested that the tax on agricultural land could be based on the value of the production that comes from it.
The amount of income tax paid is based on how much a person earns, Jim Hanna with the Nebraska Cattlemen said. Likewise, sales tax is only paid when something is purchased, he said.
Property tax on agricultural land, on the other hand, is assessed at a certain amount no matter the value of what is produced, Hanna said.
Sen. Ron Raikes of Lincoln worried that if agricultural land taxes are dropped too low, the value of that land will increase so much that young or new farmers could not afford to buy property.
It is likely that several of the ideas will be introduced as bills in the coming legislative session, said Sen. George Coordsen of Hebron. Hearings on those proposals would be next year.
The heat was turned up on the issue after the release last month of a study by the University of Nebraska's Public Policy Center that said taxes on agricultural land in Nebraska are among the highest in the nation and much higher than in neighboring states.
In Nebraska, the average tax on farmland is $1.16 cents per $100 of value; in Iowa, the average tax is 86 cents per $100 of value; in South Dakota it is 98 cents; in Kansas it is 49 cents; in Wyoming it is 11 cents; in Colorado it is 29 cents, in Oklahoma it is 34 cents and in Missouri it is 27 cents.
A significant contributor to Nebraska's high property tax on farmland is the cost of running schools.
In Nebraska, the state's share of school funding — primarily from sales and income taxes — has doubled in the last decade. But local property taxes still pay about 50 percent of school costs.
Several people who testified at the hearing via a remote link from Chadron complained about using property taxes to fund schools.
"We need to look elsewhere for some support of our schools," said farmer Gene Fisher of Crawford.
At a separate hearing, county treasurers spoke out against allowing property taxes to be paid monthly instead of twice a year.
Most people would not take advantage of the change and it would be expensive to administer, said Sarpy County Treasurer Rich James.