Taxes Push Family to Farm in a New State

August 22, 2018 11:27 AM
Nebraska to Missouri

Gazing across his Missouri soybean field, Fritz Oltjenbruns smiles and relishes in his new life. Just one year earlier, he was fighting lawmakers and taxes in Lincoln, Neb., and with that chapter of his life in the rearview he couldn’t be happier.

Harvest a year ago was surreal, he says. With each field he finished came the solemn realization it was the last time he’d ever set foot on that ground. “It was like saying goodbye to a family member,” Fritz says.

His family had farmed in Nebraska for more than 150 years, and he’d worked with some landlords for more than 30 years.

“I was the third generation in Nebraska—our whole family is buried there. We didn’t take moving lightly,” he says. “But we love Missouri, and we’re glad we’re down here.”

Fritz, along with his wife, Nancy, made the move to set up their farm for success—both now and in the future for their son, Chris. In 2017, they paid more than $50,000 in property taxes in Nebraska on 585 dryland acres. When they moved 300 miles southeast to Warrensburg, Mo., they bought 850 bottom ground acres and paid less than $1,500 in property taxes.

“When we made the decision to move I found a farm with the land all in one area—which you don’t often find,” Nancy explains. “We are saving over $180,000 a year by not paying cash rent or taxes, and it provides my son with a better future.”

They moved their planting equipment to Missouri in August 2017 but kept their harvest equipment in Nebraska until their last field was out. They moved the rest of their farm equipment and households just in time for spring planting.

Nancy acts as the farm’s business manager and handled most of the paperwork in regard to the move. These days, she helps manage new building and grain site construction, which is a welcome change. On their Nebraska farm, the family was hesitant to make infrastructure changes such as building sheds or adding grain bins and legs because that would increase taxes.

In Nebraska, the major revenue sources are property, sales and income taxes. Property taxes account for 48% of the combined revenues while sales taxes only make up 19% and income taxes the remaining 33%. Nebraskans pay the seventh-highest property taxes in the U.S.

“We must have a more balanced tax system that doesn’t put the burden of funding schools and other state priorities so heavily on property taxes paid by homeowners, businesses and agriculture,” said Steve Nelson, president of Nebraska Farm Bureau (NFB) in a recent address. “Our tax system has allowed our three-legged stool to grow further and further out of balance.”

The Oltjenbruns feel like farmer needs have been ignored.

“Ag is Nebraska’s backbone—what brings in the state’s revenue,” Nancy says. “But policymakers don’t understand farm finances. We have huge income, but huge expenses. We had 13 senators fighting for us, but we needed 35.”

In the past 10 years, real estate and property taxes for irrigated crop ground have gone from an average of $30 per acre to $70 per acre, says Tina Barrett, director of Nebraska Farm Business Inc. Different areas of the state face even higher tax rates, often in the $100 per acre range.

“Real estate values in Nebraska took a sharp jump from 2010 to 2013, which increased property taxes. It’s not just farmers in urban areas hurting,” Barrett says. “Nebraska’s property taxes go to school districts, so a lot depends on the school and if they’ve been building or doing projects. That’s one of the factors influencing taxes.”

Just eight miles north of Lincoln, Chris saw his future on the farm slipping away from him as taxes squeezed the family’s finances.

“It’s not the same place I remember 20 years ago,” Chris says. “Our farm was just one mile in the Lancaster County line and taxes were just getting worse and would continue to get worse because urban populations outweigh rural.”

While urban populations often present challenges for farmers and rural communities, it’s exacerbated in Nebraska’s legislature.

Nebraska is the only state in the nation with a unicameral legislature, a single body to make decisions. Members of the unicameral are called senators, and of the 49 senators, 25 are from Omaha or Lincoln.

“Residential, commercial and agricultural property taxpayers are being punished by a broken tax system,” said NFB’s Nelson. It’s time for all the interested parties to come together to work for a proactive solution to address the problem, he added.

For the Oltjenbruns, even if Nebraska does address what they consider unfair taxes, it’s too late.

“We survived the ’80s, but we couldn’t survive [the Nebraska’s tax system],” Chris says. “It won’t be easy [to start over], but we have a clean slate and will build for the future.”

The family is no stranger to change. In fact, this isn’t the first time the farm has moved. In 1966, Fritz’s father moved to just north of Lincoln to gain access to more land and opportunity. With an eye toward the future, Fritz and Nancy can’t wait to see what their new life in Missouri has in store.

“We escaped—we really did,” Fritz says. “We think there is more of a future for our son here. Honestly, I wish my dad would have moved us here in 1966.”

In addition to growing a crop, the family is building their farm site from essentially nothing. A far cry from their near state-of-the-art shops in Nebraska, they have a single metal building packed to the brim with equipment. The rest of their equipment sits outside. They broke ground on a new shop and 60,000-bu. grain bin in July and plan to continue to build their operation in years to come.

All that connects the family to Nebraska now is Chris’s dump truck and a ’65 Buick, which he plans to bring to Missouri as soon as time allows. Aside from the occasional trip to the cemetery to honor loved ones, the Oltjenbruns are planting their roots in the Show-Me State.

Property Tax Rates Vary by State

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Spell Check

Bryan Olson
Trego, MT
9/20/2018 08:07 AM

  Fritz was a neighbor of mine, I moved to Montana years ago and can sure see difference in taxes! Piece of ground in Nebr I have interest in yet, has a tax bill around $75 per acre, what my grandpa paid for the place when he bought it!

Jane Filipi
Wilber, NE
9/9/2018 02:06 PM

  Excellent article. I hope all of our lawmakers and the gilded governor of Nebraska, spoiled rotten Pete Ricketts, read it and get a clue about how their cold-blooded apathy effects landowners in Nebraska.


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