Property taxes up statewide by 6.6 percent

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BY NANCY HICKS / Lincoln Journal Star

Local governments expect to collect about $2.281 billion this year from local property taxes, a 6.66 percent increase from last year, according to numbers released Friday.

Almost every year both property values and property taxes go up, but not always at the same rate. But for the past two years the growth in property values and taxes have been quite similar, according to Catherine Lang, state property tax administrator, whose office released the figures.

Statewide, property values for tax purposes rose about 6.55 percent this year, marginally lower than the increase in taxes.

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Nebraska Property Tax Administrator Cathy Lang

Nebraska Property Tax Administrator Cathy Lang

“For several years property taxes assessed statewide seems to be tracking what is going on in values,” said Lang. “That means local governments are choosing to spend those local property tax dollars to the extent they are allowed.”

Local governments, cities, schools, counties and natural resources districts are dependent on local property taxes. And school districts take the biggest bite out of property taxes, using more than 60 percent of those dollars.

For several years in the late 1990s and early 2000s, when state aid to schools was rising dramatically, the amount of property taxes collected climbed slowly. In fact in 1998, property taxes collected statewide actually dropped.

“That slowest growth in property taxes assessed was the product of state aid,” Lang said.

Gov. Dave Heineman hopes his plan to increase state aid to education, and tighten the school tax rate lid, will help property taxpayers. Property taxes may not actually drop with additional state aid, “but they certainly will be a lot higher if we don’t try to do something at the state level,” he said Friday. “We can help ease the burden,” he said about his tax plan which includes sending out more state aid to schools.

This year was an exception to the general trend that sending out state aid eases the property tax burden. This year state senators and the governor increased state aid to schools by more than 10 percent. However that jump didn’t bring down property taxes.

The tax rate lid wasn’t reduced, so schools in particular used their taxing authority to put more money into their two funds that can be used to build new schools or renovate older ones, according to an analysis by Bill Lock, with the Property Tax Administrator’s office.

School spending for general costs, like salaries and utilities, paid with property taxes is going up by just 3 percent. But schools are increasing their funding for their building funds by 42 percent and doubling the money they are collecting for another fund that can be used on buildings, called the Qualified Capital Purpose Undertaking Fund (formerly used for asbestos removal).

In fact about half the $70 million increase in property taxes being collected by schools will be used on buildings, according to Lock’s analysis. “Schools are sending a fairly strong message that need for money is in the facility area,” Lock said.

About 11.5 percent of the higher property taxes will go to voter-approved bond issues. About 36 percent of the growth ($51 million) can be attributed to newly constructed homes and buildings, and 53 percent (about $74.9 million) will have to be absorbed by existing property, according to a Property Tax Administrator’s office analysis.

Property taxes in four counties grew by more than 12 percent. They are Antelope, Greeley, Hitchcock and Johnson. Meanwhile, Deuel, Hooker, Sheridan and Washington counties saw their property taxes decline.

Generally, these reflect dramatic growth or some decline in property values in those counties, Lang said.

Lancaster County is ranked 55th in the state, among 93 counties, based on growth of property taxes.

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.

What it means

The owner of a house valued at $100,000 living in an area where the tax rate is $1.50 per $100 of assessed value would pay $1,500 in property taxes, for example.

Applying the 6.66 percent statewide increase, that tax bill would go up $99.