The taxable value for agricultural land in Nebraska declined .15 percent in 2017 according to a preliminary analysis released Friday by the Nebraska Department of Revenue. The slight decline marks the first time the assessed value of agricultural land statewide has shrunk from one year to the next since at least the early 1990s, and perhaps as far back as the late 1980s. Taxable value for all real property increased 3.34 percent over last year, with residential and recreational property value growing 6.5 percent, and commercial and industrial property growing 5.82 percent. The figures come from reports filed by county assessors with the Department of Revenue. Notices of valuation changes will be sent to property owners on or before June 1.
The changes for agricultural land varied considerably across the state (see map below). In Sarpy County, the value of agricultural land fell 9.38 percent, while in Hooker County it increased 19.28 percent, a difference of almost 30 percentage points. Other counties seeing significant declines were Nuckolls and Douglas Counties with drops in value of greater than 8 percent. Other counties with large increases included McPherson at 18.68 percent and Thomas at 10.76 percent. In all, 43 counties saw decreases in agricultural land values (counties in red and orange on map), and 50 counties reported either no change or increases in total values.
The variations across counties reflect the differences in the timing of price movements in the cattle and crop markets. The run-up in cattle prices, and subsequently prices for grassland, started and peaked later than the run-up in corn and soybean prices and prices for crop ground. Because assessed values are set using prices from 3 years’ prior land sales, counties made up primarily of grassland are still seeing the higher land prices reflected in the setting of assessed values. What do the value changes mean for property tax levied? The answer will be dependent on local government spending and budgeting decisions later this year. Local governments must approve final budgets by September 20 and tax levies will be set before October 15. Suffice it to say, that in some counties, the values changes might result in a slight shift in taxes levied from agricultural land to other property sectors. For other counties, the trend of agricultural land carrying a greater share of the local tax burden will continue.
Jay Rempe is the senior economist for Nebraska Farm Bureau. Rempe’s background in agricultural economics, years of experience in advocating at the state capitol, and firm grasp of issues allow him to quantify the fiscal impact of a regulatory proposal, and provide in-depth examination of key issues affecting Nebraska’s farmers and ranchers.