Sometimes Timing is Everything . . .

Economic Tidbits 12.18.17

Some Nebraska farmers have said they aren’t too concerned with the ongoing trade tensions with China, the largest customer for U.S. soybeans.  If the tensions were bad for the soybean market, they state, soybean prices would have dropped.  Price haven’t dropped, so the Chinese trade tensions are not a problem.  Sometimes, though, timing is everything—could it be the timing of rising Chinese trade tensions coincided with other market happenings which mitigated any price response?
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RIN Price Cap Could Cost Producers $421 Million

Economic Tidbits 12.18.17

A contemplated change in how the Renewable Fuel Standard (RFS) is implemented could cost Nebraska corn producers $421 million.  A policy brief by the Iowa State University, Center for Agriculture and Rural Development (CARD), suggests the policy change, a cap on the prices of Renewable Identification Numbers (RINs), could result in a price loss for corn of 25 cents per bushel.  A 25-cent loss in price would equate to a loss in the value of Nebraska’s corn crop of $421 million, or 7.6 percent, based on the 2017 estimated crop value of $5.5 billion.

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Property Tax Credit Averages $2.28 per Acre . . .

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The property tax credit for 2017 under the Property Tax Credit Act will reduce taxes on agricultural land an average $2.28 per acre.  To put the figure into context, property taxes levied on agricultural land for 2016 averaged $26.07 per acre.  The total amount of tax credit provided to agricultural land owners for 2017 will equal almost $105 million, or 8.7 percent of the total taxes paid in 2016.  In other words, without the credit, property taxes paid on agricultural on agricultural land for 2017 would be 8.7 percent higher.
The total credit amount for all real property owners will equal $224 million, an increase of $20 million over the previous year as provided in LB 958 passed in 2016.  LB 958 also provided that additional weight be given to agricultural land in distributing the credit monies.  In absolute dollar terms, Custer County agricultural property owners will receive the most credit at just over $2.95 million, followed by Holt County and Platte County property owners.  In percentage terms, the credit provided to Keya Paha County agricultural property owners will equal 14.6 percent of 2016 taxes paid, 13.6 percent for Loup County owners, and 13.2 percent for Wheeler County owners.   The map below plots the credit as a percentage of 2016 taxes paid on agricultural land in each county.  The more yellow or red the county spot, the greater the percentage.  For exact figures for each county, click here.

Prop Tax Credit 9-26-17

Source: Nebraska Department of Revenue



Jay RempeJay 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.

2017 Agricultural Land Assessed Values Stay Flat

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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.

Ag Land Valuations 2017

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.

A Lay of the Land… Farm Bureau’s Chief Lobbyist Talks Term Limits, Elections and Other Issues Affecting Ag at the State Capitol


Bruce Rieker, Vice President of Governmental Relations

There are lots of factors that come into play when it comes to what will or won’t get done when it comes to agriculture issues in the 2017 legislative session. And while we’re months away from the start of the session, what happens in the coming weeks and months will shape the political and policy landscape in 2017. Farm Bureau News visited with Nebraska Farm Bureau’s Vice President of Government Relations, Bruce Rieker to get a lay of the land on where things are headed.

Farm Bureau (FB) – Bruce, let’s start by talking about money, because ultimately that shapes what the state budget looks like and plays a major role in terms of what the legislature does and doesn’t do. Generally speaking, it’s easier for senators to provide tax relief if the state is in a good position financially. How are things looking right now?

Bruce Rieker (BR) – If there’s any doubters about whether the health of Nebraska’s economy is tied to the agriculture economy, you don’t have to look any further than the legislative fiscal office projections. When the legislature adjourned in April they estimated state revenues would fall $234 million short of what had been budgeted for the two-year budget cycle beginning July 1, 2017. The projected shortfall was in large part due to the struggles in the agriculture economy.

Currently, state tax receipts are down $71 million below projections for the fiscal year. If things continue to head in this direction it sets the stage for the legislature to build a budget that doesn’t have much room for growth, so basically every dollar the state is short of projections is a dollar that potentially adds to the cost of tax relief or tax restructuring that would help us address the issue of property taxes.

FB – While financial status is important, what gets done legislatively also depends on who is in the Legislature. We’re set for some major changes in both the make-up of the legislature and in leadership positions, correct?

BR – There are 11 state senators who won’t return in January due to term-limits. Among them is the Speaker of the Legislature who leads the overall agenda for the body, as well as the Chairs of the Appropriations, Education, Health and Human Services, Natural Resources and Revenue Committees. That means there will be new leaders in the majority of the Committees that work on issues of interest to Farm Bureau. It’s important whoever takes over those positions has a good feel for our issues because they will have a strong influence in determining what gets done.

Term-limits have definitely changed the body if you look at the actual on-the-job experience of senators in the Legislature.  Depending on how elections go, 34 of the 49 state senators could have two years or less of experience in the legislature when we start the 2017 session. We know for sure there will be only seven senators who have been there for six years or more.

FB – What does all that mean for farmer and ranchers?
BR – It means a number of things for those of us in agriculture. For starters, it puts more responsibility on all of us, particularly our members, to engage with senators to help them understand the importance of agriculture to our state and the issues that directly affect them it such as property taxes, livestock issues, water issues, and so on.

It also means things tend to become less predictable in the body, at least in the short-run. Anytime you put a large number of new people together it takes time for them to get to know one another and how they operate. Last session we saw a record high 24 filibusters on the floor. There’s a lot of reasons for that, but a contributing factor is the transition of people in the legislature. It’s the equivalent of a major league baseball team changing half its roster in the off-season and expecting it to look and perform the same as it did the year prior. That just doesn’t happen.

FB – We can’t talk legislative turnover without talking elections. All but one of Nebraska Farm Bureau’s “Friend of Agriculture” candidates advanced to November’s General Election. What do things look like there?

BR – As you mentioned, all but one of our “Friend of Agriculture” candidates advanced to November’s General Election which is great news.

It was an interesting primary, particularly for some of the incumbents seeking re-election. One of those, Nicole Fox from Omaha, did not advance to the General Election. Five other incumbents finished second in the primary election, including Sen. Al Davis of Hyannis and Sen. Jerry Johnson of Wahoo. Both are “Friend of Agriculture” candidates and have been very good for Farm Bureau on key issues, including work on property taxes. In addition, Sen. Johnson serves as the Agriculture Committee Chair and he was instrumental in working on bills to advance livestock growth opportunities in the state last session as well as working with us on the “Right to Farm” issue. Agriculture needs their continued leadership in the legislature so it’s vital our members support those candidates in particular.

FB – Why is it so important that Farm Bureau members support “Friend of Agriculture” candidates?

When we have people who come into the legislature who understand and support agriculture, it increases the chances that we can successfully implement Farm Bureau policy positions. And sometimes, more importantly, make sure we stop measures that would harm our members. That’s why our “Friend of Agriculture” designation for political candidates is important. We have a better chance getting things done for agriculture if we have senators in the body who get why it’s important to support Nebraska’s farm and ranch families.

With that said, there will be plenty of opportunities this summer and fall with county fairs, parades, festivals and such where members can support and help out our “Friend of Agriculture” candidates. I can’t emphasis enough how vitally important it is for our members to support these candidates. It’s a great way for members to build the relationships with their future senator. While Farm Bureau is at the Capitol everyday working with lawmakers, it’s important senators have Farm Bureau members in their district that they know so they can reach out to them for information and insight so they can personalize these issues for people in their district.

Property Taxes Still Top Priority

steve corn head shotIn early June I had the opportunity to attend the 2016 Cattlemen’s Ball hosted by the Linemann Family near Princeton, Nebraska. The Ball is a tremendous event targeted to raising funds for cancer research. If you’ve never been, I’d encourage you to put it on your list of things to do and see in Nebraska. Congratulations to the Linemann family and all those who helped make this year’s event a major success!

Not only is the Ball a fun time for a great cause, it’s a good way to connect with people from across the state. During the Ball I had the chance to talk to many farmers and ranchers. Not surprisingly, property taxes and concerns about profitability in agriculture were the top two issues on people’s minds. As margins in agriculture have tightened, the squeeze of higher property tax bills have only added more financial pressure to farm and ranch families. With property valuation notices hitting mailboxes in June its only added to the seriousness of the need to address this issue.

I don’t need to repeat the numbers, but I will. Over the last 10 years property taxes collected on agricultural land statewide have increased 176 percent. Commercial and residential property taxes have also climbed by 49 percent and 35 percent, respectively. Nebraska’s three-legged tax stool of property, income and sales tax is out of balance. Property taxes now account for 48 percent of total collections of the three, with income taxes at 32 percent and sales taxes at 20 percent of statewide collections.

We have to bring balance to our tax structure and alleviate the over-reliance on property taxes. As we head into the heat of the summer, I want you as a Farm Bureau member to know this when it comes to the property tax issue:

Farm Bureau will continue to lead the charge to fix this problem. This isn’t an easy issue, but it is not an impossible one either. There are numerous ideas and approaches to better balance the tax burden and alleviate the pressure on property taxes. We’ve offered solutions in the past and we’ll continue to do so. We’re fleshing out new ideas, even as I write this. We are committed to this issue.

We have expectations of the Legislature. There are good people in the Nebraska Legislature who are interested in making sound tax policy for Nebraskans. The Legislature is still our first best means to solve the property tax problem. As we’ve always done, we will bring ideas to the legislature and work together with Nebraska senators to find solutions. With that said, the Legislature needs to act. Kicking the can down the road won’t cut it. We’ll continue to do everything we can to work with senators to make progress in the legislative arena.

We’re willing to be patient, but there must be a final destination. Baseball analogies are often used to discuss the property tax problem. I continue to hear the terminology “bunts and singles” when it comes to fixes for property taxes. “Bunts and singles” will not solve the problem unless you string enough of them together to score runs and ultimately win. I’ve testified before the legislature that if it takes multiple years to solve this issue, we’re willing to do that. But there must be a clearly identified end goal, with a plan for how that is accomplished.

All Nebraskans, not just farmers and ranchers deserve better. They say a rising tide raises all ships. While our farm and ranch members have been hit the hardest by property tax increases, we know many Nebraskans share those concerns and they’ve relayed those to their elected leaders. Our solutions to balance the property tax burden will work for all Nebraskans.

Doing nothing is not an option. I know you want this issue addressed. Many of you have reached out to the team at Nebraska Farm Bureau urging action. I also know some members are looking at alternatives beyond the legislature. As I said before, the legislature is our first best solution, but we are open to looking at all options to make the reforms needed to bring balance to our tax system.

As always, I want to thank you for being a Farm Bureau member. Farm Bureau exists to serve you and I always welcome your thoughts, input and ideas as we work together to address this critical issue.


Until Next Time,

Steve Nelson, President, Nebraska Farm Bureau

Sound Tax Policy isn’t Education’s Foe

steve corn head shotThere are two things I’m confident about when it comes to the beliefs of the majority of Nebraskans. One, we value education; whether it’s making sure we have high quality K-12 schools, or quality secondary education opportunities. Two, we believe in sound fiscal policy; including an appreciation for spending restraint and a balanced tax structure.

We don’t believe those two things have to be in conflict, but you might get that impression based on sentiment expressed by some in the education community as Farm Bureau has weighed in on the need for property tax and school funding reform. Farm Bureau’s calls for local spending restraint and property tax relief should not in any way be construed as adversarial to public education.

You know as well as I do that Nebraska Farm Bureau and its members value quality educational opportunities for Nebraska students. For decades, numerous members of our organization have given their time and talents to serve on local school boards, while many others have offered their service to Nebraska education as teachers and volunteers. Our members are proud to support their schools and their communities.

As I’ve said on many occasions, including testimony before the Legislature’s Revenue and Education Committees, how we as Nebraskans choose to fund schools is a separate and distinct question from whether we should provide quality educational opportunities for students.

We believe in quality education, but we also believe we must address the underlying imbalance in our tax structure that has led us to a point where property taxes carry the lion’s share of school funding. Nebraska is far outside the norm in terms of our reliance on property taxes when compared with other states. For example, the nationwide average contribution of property taxes for school funding is 32 percent. In Nebraska, it’s 51 percent.

Calls for reform are not an indictment of whether our schools are doing a good job, but rather an indictment of an imbalance in the way in which we fund schools in Nebraska and the over-reliance on property taxes to do so.

And make no mistake, Nebraskans want lower property taxes.

Over the last 10 years, (2005 to 2015) total statewide property tax collections for real property increased 66 percent, with property taxes levied on agricultural land increasing 176 percent, commercial property taxes 49 percent and residential property taxes 35 percent.

In 2015 alone, property tax collections increased statewide by six percent, a total increase of $216 million. That clearly outpaces the $204 million put into the state’s property tax credit program that was targeted to provide property tax relief.

We’re not getting ahead. We’re not even treading water.

To solve the property tax problem we as Nebraskans have to think bigger. We need visionary leadership. That’s the reason delegates at Nebraska Farm Bureau’s annual meeting adopted policy that seeks to set a limitation that no more than 40 percent of school spending could come from property taxes, bringing us closer to the national norm. The goal isn’t to harm education. The goal is to alleviate the pressure on property taxes and force the conversation that must take place about balancing the tax burden on Nebraskans. This is about fixing a problem that continues to be kicked down the road.

Those who believe that calls for property tax reductions and school funding reform are attacks on education, are simply missing the point.

We can work together to determine how much money it takes to provide adequate funding for schools. But, until we reform how we fund schools, there will continue to be undue pressure on property taxes.

There’s no question that re-balancing the tax burden and how we fund schools is challenging. But having the ability to problem solve and tackle these types of challenges is why we invest in education in the first place.

It’s time to think bigger on Nebraska tax policy. Reducing our over-reliance on property taxes to fund education is the right place to start.


Steve Nelson