LINCOLN, Neb. — As local governmental units prepare to vote on budgets and set property tax rates for next year, Lincoln officials are struggling with what to do about a property tax windfall.
Lincoln City Council passed a resolution in March defining windfall as the increased property tax revenue resulting from the higher residential property valuations, the Lincoln Journal Star reported .
Lincoln has seen a nearly 9 percent valuation increase from last year due to rising home prices and the county assessor’s decision to reassess residences across the area one year ahead of schedule. What Lincoln Public Schools, the city and Lancaster County do with the revenue will affect how much property tax payments for home and business owners will go up next year.
The Lincoln Independent Business Association PAC officials said local elected officials should reduce tax rates and not tap into the windfall.
The school district is moving toward using the entire windfall by setting the same tax rate as this year and bringing in about $18 million in additional property taxes. The property tax provides more than half of the district’s revenue.
The Lancaster County Board is considering a more than half-cent drop in the tax rate. With higher assessed values, that will bring in an additional $3.8 million in property tax for county agencies for next year. More than half of the county’s general fund budget comes from property taxes.
Lincoln Mayor Chris Beutler’s budget proposal says to reduce the city’s tax rate by nearly two cents, bringing in an additional $1 million in property taxes that will be used to hire additional police officers and buy fire engines.
Information from: Lincoln Journal Star, http://www.journalstar.com