MADISON — The Madison County Board of Commissioners on Tuesday discussed Legislative Bill 81, which is intended to restore Nebraska taxpayers’ ability to get back a portion of the property taxes they paid to public schools.
Norfolk resident Steve Jessen spoke at Tuesday’s meeting at the request of board chairman Troy Uhlir and talked about LB 34, which was passed during last year’s special legislative session with the intent to give Nebraskans property tax relief.
LB 34, however, retroactively eliminated the ability for some Nebraskans to claim a refundable income tax credit to get back a portion of the property taxes they paid to K-12 public schools.
Under the Nebraska Property Tax Incentive Act (LB 1107) passed in 2020, property owners received a statement in 2023 informing them of their assessed property tax liability for 2023. Property owners then paid their property taxes in 2024 that were assessed the year before.
Under LB 1107, in 2025, property owners would be able to claim their tax credit for 2023 property taxes on their income tax return.
However, under LB 34 passed last year, all income tax credits ended in 2024, taking away taxpayers’ ability to claim the credit for their 2023 property taxes on their 2025 income tax return.
Gov. Jim Pillen’s office and the Nebraska Department of Revenue have said the fact that property owners wouldn’t ever be able to claim credit for their 2023 property taxes is immaterial because property owners saw a credit on their 2024 tax statements they received in December, thus not affecting the taxpayer’s cash flow. This only may be true, however, if the taxpayer never claimed the credit.
Uhlir, chairman of the board of commissioners, said a small percentage of people paid their property taxes in December, resulting in relief. Others, though, who pay their taxes through mortgages or pay in April or September did not see those tax credits.
LB 81, which was introduced in this year’s legislative session, would restore the “missing year” of property tax credits paid by taxpayers to local school districts.
Some senators support LB 81. The problem, however, is coming up with a way to pay the $600 million that wasn’t credited to property owners resulting from LB 34.
“The common phrase down there (in Lincoln) is this: How are you going to pay for it?” Jessen asked. “Because this is about a $600 million mistake that they made on the taxpayer, property taxpayer, in Nebraska, and this is affecting every property owner in the state.”
Uhlir said it’s frustrating because he doesn’t believe Pillen is being sincere about his intentions, calling LB 34 “an easy way to grab $600 million by not having to pay it out.”
Uhlir is encouraging residents to contact their state representatives and members of the revenue committee in hopes of generating support for LB 81 to restore the tax credits to Nebraska taxpayers.
