Examining three homes’ final property tax bills

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Examining three homes’ final property tax bills

Changes in annual property tax bills since 2003 for The Telegraph’s three sample homes are shown above. To further contrast their experiences, this chart adds a fictional “base” home, with an initial $100,000 taxable value that grows each year by the percentage growth in North Platte’s citywide valuation. Each home’s plot line splits in two (but retains identically colored lines) to show the impact of the Nebraska Property Tax Credit program that started in 2007 (first asterisk). Home 2’s tax bill plunges for 2010 only because its then-owner qualified for both a Lincoln County homestead exemption and the state tax credit (second asterisk). (Source: Nebraska Taxes Online (2003-18), Telegraph projection (2019))

There’s very little that’s straightforward about Nebraska’s property tax system, as The Telegraph has emphasized in covering the process this year and last.

We offer a different vantage point, as it applies to three actual North Platte homes, in today’s final “tax tracker” presentation of the 2019 local “budget season.”

Lincoln County commissioners on Oct. 13 will ratify 2019 property tax rates for every “political subdivision” that serves any part of the county.

Though its tax-setting vote is required by law, the County Board cannot affect any tax rate but its own. Commissioners set that one when they adopted Lincoln County’s 2019-20 budget Sept. 9.

This year’s tax-setting process barely changed the actual tax bills for the three sample homes, as The Telegraph reported Sept. 21.

The differences between their net 2018 and 2019 tax bills in fact are smaller than we reported then, due to a calculation error that understated the impact of the discount on homeowners’ 2018 taxes under the Nebraska Property Tax Credit program.

To recap, using the corrected 2018 state credit figures:

» The gross tax bill for the owners of Home 1 — a two-story, three-bedroom home with a full basement north of the Union Pacific tracks — will be $17.51 higher in 2019 than in 2018.

With the state tax credits applied, their net bill will be $2.35 less than last year’s total after credits. Home 1’s taxable value for 2019 is $109,950, unchanged from 2018.

» Their counterparts in Home 2, a one-story, two-bedroom home with no basement west of Westfield Shopping Center, will pay $2.25 less in net taxes.

The state credits, however, wiped out a $16.77 increase in the home’s gross taxes over 2018. Its 2019 taxable value remained steady at $105,325.

» Without the state credits, the owners of Home 3, a two-story, four-bedroom home with no basement between Home 2 and the South Platte River, would pay $45.49 more in gross 2019 taxes.

With the credits, the net tax bill will be $6.11 lower for Home 3, which had a $285,720 taxable value for both 2018 and 2019.

Those figures will be changed by Monday’s County Board vote only if there were minor technical corrections to a local government’s tax request or taxable value after it adopted its budget.

Because all three homes’ valuations were unchanged, each saw an 0.8% boost in gross 2019 taxes turn into a 0.1% cut with the state credits.

As today’s graphic shows, however, it’s typical that there’s no “typical” property tax experience.

Nebraska property owners can view their property’s valuation and tax bill history since 2003 by visiting Nebraska Taxes Online (nebraskataxesonline.us), from which this chart was generated.

(If you use that site, you’ll need your “parcel identification number,” which you can find on either your printed tax statement or the Lincoln County GIS site at lincoln.gworks.com.)

To help emphasize the differences in tax experiences, today’s chart adds an entirely fictional “base” home that you can see in the middle.

To generate a “pretend” valuation to apply to each year’s real combined tax rate, we assumed a 2003 taxable value of $100,000 for the “base” home and grew it by the annual percentage increase in North Platte’s citywide valuation.

But that’s not what happens to individual property valuations most years, as the chart shows.

State law says taxable values for residential and business properties must fall between 92% and 100% of “actual value” every year (compared with 69% to 75% for farm and ranch land).

But because it’s virtually impossible to physically inspect every parcel every year, county assessors have up to six years to make the rounds (though they can update individual property values more frequently as sales warrant).

Today’s line chart shows sharper upward angles for years when The Telegraph’s sample homes received significant valuation increases. That happened in 2015 for Home 1 and 2006 and 2013 for Home 3, which also saw a substantial valuation cut in 2015.

The sudden but temporary plunge in Home 2’s 2010 taxes reflects an additional tax-break option: the county “homestead exemption” for homeowners who are 65 or older, disabled, a military veteran or a veteran’s widow. It must be applied for and granted each year.

But as the chart shows, the state discount on the three homes’ final tax bills — worth 4.2% to them in 2018 and 5% in 2019 — hasn’t substantially altered the long-term upward trends in their year-to-year taxes.

After Monday’s vote, 2019 property tax invoices will arrive in property owners’ mailboxes before year’s end. Though they’re due and payable then, the first half may be paid before May 1 and the second half before Sept. 1 without becoming delinquent.

After New Year’s Day passes, assessors start work on 2020 valuations. And the process begins again.

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