Property taxes have surfaced as a key issue in Nebraska's race for governor, with the candidates offering drastically different approaches for easing the burden on farmers, ranchers and homeowners.
Republican Pete Ricketts and Democrat Chuck Hassebrook are both trying to persuade voters that their approach would help reduce the tax, which has soared in rural counties even as commodity prices have fallen. Ricketts unveiled a property tax plan earlier this month, and Hassebrook said his renewable energy platform would generate local tax revenue to offset what property owners must pay.
Ricketts said lowering property taxes would be "absolutely the No 1. priority" if he were elected, given his conversations with voters and the public feedback lawmakers received at a series of tax hearings.
"I think we need to do more because the citizens of Nebraska are telling us that we need to do more," Ricketts said.
Ricketts said he would work to reduce unfunded state mandates for school districts, cities and counties, and would oppose efforts to add more financial burdens in the future. He said he met recently with Lynn Rex, director of the League of Nebraska Municipalities, to discuss how the state can curtail its mandates on city governments to help lower their costs.
Many of the expenses passed down to local governments are small, but collectively they make it harder for local officials to control their budgets, Ricketts said. He pointed to the state's new suicide-prevention training requirements for teachers, saying the idea was worth pursuing but it shouldn't be forced on schools.
Ricketts said he wouldn't rule out restoring state aid to local governments that was cut during a 2011 budget crunch, but he argued the better approach was to reduce the expenses imposed on them by the state. Cities and counties have said the state-aid cuts are partly to blame for rising property taxes.
Restoring state aid "is not going to be very high on my priority list," Ricketts said. "It's a temporary fix. The next governor or the next Unicameral could just come along and change it. And that's what happened: When times were tough, that funding got cut."
Hassebrook said he would work to lower property taxes, but he'd prefer that most of the benefits go to owner-occupied farms and landowners who actually live in Nebraska. He pointed to CNN founder Ted Turner, who owns large swaths of land in the Nebraska Sandhills and millions of acres throughout the western United States.
"Ted Turner doesn't need property tax relief as badly as small family farms and low-income families," Hassebrook said.
Hassebrook said property taxes have increased in part because of state spending cuts that shifted expenses to cities and counties. To reduce some of the cost, Hassebrook said he would he would support reimbursing counties that house state prisoners in their jails.
Hassebrook said he would work to attract new wind farms, noting a 200-turbine wind farm would generate about $25 million in taxes over 20 years, and that money could offset current property taxes.
Hassebrook said he also would push to collect sales taxes that aren't paid by Internet retailers. The state could put that revenue toward property tax reductions and local government services, while "leveling the playing field" for Nebraska-based companies that pay sales taxes, he said.
Both candidates said they would support lowering the percentage of farmland that can be taxed from 75 percent of market value to 65 percent, but lawmakers in recent years have rejected the idea.
They split on whether to use cash reserves for property tax reductions, with Ricketts endorsing the idea and Hassebrook saying it's not sustainable.
Farm and ranching groups plan to pursue property tax reform again in 2015, but major changes could take years, said Nebraska Farm Bureau president Steve Nelson.
"On a scale of 1 to 10, some of our members think it's a 12," Nelson said. "It's not just how high the property taxes are. It's the imbalance of who pays."
Nelson, whose group endorsed Ricketts, said many members want the taxable value of farmland lowered and money put into the state property's tax credit fund.
Larry Dix, executive director of the Nebraska Association of County Officials, said Nebraska lawmakers and governors have wrestled with the issue for decades.
"It's one thing to take a look at it," he said. "It's a little more difficult to solve it."