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Taxes Push Family to Farm in a New State

12:21PM Aug 09, 2018

Their move to Missouri took more than 50 trips. That’s more than 250 hours on the road, not including packing.( Sonja Begemann )

Gazing across his mid-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 crop was out. Finally, in spring 2018 all farm equipment was in Missouri—with two households left to move.

“We loaded everything we could out of the house and started moving in earnest in February—we were running out of time,” Nancy says. Leaving her lush garden and orchard was a hard goodbye, but she’s already eyeballing a location in Missouri for her new garden. 

They got all of the farm equipment and family houses moved just in time for spring planting. Their son, Chris, joined them in Missouri on April 1.

Nancy acts as the farm’s business manager and handled much of the paperwork when it came to moving and continues to manage taxes, land payments and other day-to-day needs. And, in a pinch, she has a CDL and drives semi-trucks.

She also helps manage new building and grain site construction on the Missouri farm, which is a welcome change. On their Nebraska farm, Fritz and Nancy were hesitant to make any kind of infrastructure changes such as building grain bins or sheds or adding legs because any new infrastructure increased taxes.

Nebraskans pay the 7th highest property taxes in the nation. The three major sources of revenue in Nebraska are property, sales, and income tax. Property taxes account for 48% of those combined revenues, while sales taxes only make up 19% with the last 33% from income taxes.

“We must have a more balanced tax system that doesn’t put the burden of funding school and other 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.”

map of property taxes

Just eight miles north of Lincoln, Chris saw his future on the farm slipping away 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 is exacerbated in Nebraska’s legislature.

Nebraska is the only state in the nation with a Unicameral legislature, which met for the first time in 1937. Instead of a two-part legislative system, Senate and House, it uses a single legislative body to make decisions for the state. Members of the Unicameral are called senators, with 49 representing citizens throughout the state. Of the 49 senators, 25 are from either Omaha or Lincoln.

“Residential, commercial and agricultural property taxpayers are being punished by a broken tax system,” NEFB’s Nelson said. He says it’s time for all the interested parties to come together to work for a proactive solution to address the increase over 10 years

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

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

The family is no stranger to change and evolving. In fact, this isn’t the first time the farm has moved. In 1966, Fritz’s father moved to the farm 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.”

The family, in addition to growing a crop, is building up 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. Many pieces of machinery are sitting outside because there isn’t space. 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 the Nebraska now is Chris’s dump truck and ’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.

*Number of Senators from Lincoln or Omaha updated to current date.