Property taxes are determined by the land's value multiplied by the tax levy, or tax rate. If the assessed value of land increases, but the levy drops, then taxes could go down. If the assessed value of land drops, and the levy goes up, then taxes could also rise. Property taxes statewide increased by more than 7 percent in 1993 and 1994 and increased by about 4 percent each of the next three years before dropping by nearly 5 percent in 1998. Last year, property taxes overall increased 3.26 percent.
School districts rely heavily on property tax revenues.
But local property taxes still pay about half of school costs. Fisher and Hoatson told the Revenue Committee last week that the tax base needs to be broadened to take the burden off property taxes to finance schools. Farmers, who typically own more land than city residents, contribute more in taxes than their neighbors to finance education, said Bryce Neidig, president of the Nebraska Farm Bureau Federation. The Legislature must be careful that the plan it endorses actually does what is intended, said Bruce Johnson, an agricultural economist with the University of Nebraska-Lincoln. A report written by Johnson last fall drew attention to the state's proportionally high taxes on farmland.