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Nebraska agricultural property taxes are among the highest in the United States. Over the last three years, Nebraska farmers and ranchers have paid nearly 31 percent of their net farm income as property taxes (47 percent in 2017). When state and federal taxes are factored in, this represents an effective tax rate of more than 50 percent (over 60 percent in 2017). While no one particularly enjoys paying property taxes (or any other tax), property taxes are especially burdensome for Nebraska farmers and ranchers.
The proposed 2020 constitutional amendment to provide property tax relief would require dramatic state spending cuts, equally dramatic state sales and income tax increases, or both. This newsletter provides an introduction to the role of property taxes in financing state and local government in Nebraska as well as K-12 education. We then examine some of the major property tax relief proposals and how they might impact taxing and spending in Nebraska.