(The Center Square) – Nebraska’s budget surplus is particularly good news for the state’s farmers, said Mark McHargue, president of the Nebraska Farm Bureau.
Thanks to the Nebraska Property Tax Incentive Act (LB 1107), which went into effect last summer, every time state tax revenues increase more than 3.5% from one year to the next, income tax credits are automatically triggered on local school taxes.
“We have surpluses so we’re going to see really nice loans,” said McHargue. “It’s a big win. We worked on that for a long time. Nebraska has historically been a state with high property taxes. We have extra money. Let’s reduce our tax burden. “
The refundable income tax credit will literally put money in farmers’ pockets, McHargue said.
“There was debate about whether or not the law would really have an impact,” he said. “But it’s turned out to be a great program, anyway.”
LB 1107’s loan in FY 2022 will be approximately $ 548 million and will not be under law until FY 2024, Craig Beck, senior financial analyst for the nonprofit OpenSky Policy Institute, told The Center Square.
The state brought in nearly $ 1 billion more than forecast in the past fiscal year. One of the reasons for this was that the state’s income tax deadline was extended from April to July 2020 at the height of the COVID-19 pandemic. That change moved $ 280 million from fiscal 2020 to fiscal 2021, Beck said.
Property owners will receive credits when they file their 2021 tax returns that are an estimated 22% of the property taxes they paid to schools, McHargue said.
However, it is not certain that the state’s economy will continue to grow this fast, especially as federal COVID-19 aid to the state wears off, Beck said.
“There are nuances as to why we’re showing we were nearly $ 1 billion above our certified forecast last fiscal year,” said Beck. “When you take these nuances into account, it’s a far less rosy picture that requires caution as you move forward.”