"Property Tax Relief" Constitutional Amendments

This month, VIP is focusing on two citizen petitions focused on property tax relief. A third petition that would have eliminated property, income, inheritance, and corporate taxes has been withdrawn; its supporters intend to re-introduce it for the 2028 election. 

It is no secret that property taxes in Nebraska are rising for a variety of reasons, becoming burdensome for many property owners and pricing some out of their property. Governor Pillen and several state legislators have made it a goal to provide property tax relief – but with only limited success so far. The following citizen initiatives, hoping to do what the governor and Legislature have so far been unable to do, present different ways to address the problem. Both of them are proposed by the same group of sponsors, and both propose ways to “decouple” the effect of quickly-rising property values in Nebraska from property taxes. 

The first tackles the issue from the angle of property valuations. Its description for the Secretary of State is “For all Nebraskans: 3% annual cap on property valuation assessment.” Part of the reason property taxes have increased is that property values have increased, sometimes dramatically, without predictability. Even if tax rates don’t increase, property owners still must pay more because of the higher value of their property.  

The petition proposes a Constitutional Amendment:  

In other words, owners whose property has gone up in value over 3%, when no construction has happened on the property, will still not have to pay more than a 3% rise in property taxes.  

A second petition approaches the issue by reducing the taxable percentage of a property’s value. Its description is this: “For all Nebraskans: 50% Reduction in the Taxable Property valuation.” It would do exactly what it says—take the value of property that is currently subject to property tax, and cut in half the percentage that is subject to tax.   

Under current Nebraska law, real property (such as homes) has property tax levied on 100% of its actual value. This petition would change the law so that real property can be taxed on only 50% of its actual value. In other words, for a simplified example, let’s say you own a home that is valued at $100,000, and the property tax is 1%. Under current law, you would need to pay 1% of the home’s full value of $100,000, which would be $1,000.  

This law would state that you could only be taxed on half the value of the house. So, you can only be taxed on $50,000. Your 1% property tax would then be only $500.  

Likewise, under current Nebraska law, horticultural and agricultural land is taxed at 75% of its actual value. This petition would change the law so that horticultural and agricultural land would be taxed on 37.5% of its actual value.   

School district taxes can currently levy taxes on agricultural and horticultural land on 50% of its value, to pay principal and interest on bonds that voters have passed. This law would cut that in half, too, allowing schools to tax only 25% of the land’s value.  

In short – the intention is to cut property tax in half, across the board.  

If one or both of these petitions make it on the ballot and are passed by voters, both would provide significant property tax relief. They would not change the issue of rising property values, but would at least initially protect property owners from the large property tax burden associated with those rising values.  

When considering these petitions, an important factor is that reducing one tax means a reduction in revenue for state and local governments. Local governments in particular rely on property tax revenue, with one of the largest recipients being schools. Governments rely on a balance of types of taxes: property, income, sales, excise, and inheritance. If one of the revenue-generators is reduced – especially if it is reduced by 50% or more – the legislature will need to figure out how to re-balance the budget. Options would be cutting wasteful or fraudulent spending; cutting costs, probably in the form of reduced services; or increasing other types of taxes. How Nebraska might reach this balance is unknown.  

If one or both of these petitions make it on to the ballot and are passed, interested citizens may wish to be prepared to contact their representatives with their concerns or suggestions for re-balancing the budget. 

Research and writing by Vickie Hecker. Vickie is a state employee, but her postings on this site do not speak for the views of the state, its customers, clients, suppliers, or employees. Any links to state sites are provided for informational purposes only.