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Nebraska bill would cut agricultural valuation from 75% to 50%; counties and schools warn of revenue shifts

Nebraska Legislature Revenue Committee · January 28, 2026
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Summary

Sen. Tom Brandt’s LB814 would lower the assessed percentage for agricultural land from 75% to 50%, a move proponents say will ease property-tax pressure on farmers but opponents — counties, schools and ESUs — say would shift costs to other taxpayers and strain local services without additional state aid.

Senator Tom Brandt, R‑District 32, told the Revenue Committee he filed LB814 to lower the assessed percentage on agricultural and horticultural land from 75% to 50% of market value, arguing that rising land prices have outpaced farm income and are forcing producers off the land. "LB814 would reduce that assessment level from 75% to 50% of actual value," Brandt said in his opening statement.

Why it matters: Brandt said the change is intended to align tax liability more closely with the economic return on farming and to slow the conversion of farmland to non‑agricultural uses. He described the measure as a valuation change rather than a new tax and said it would give near‑term relief for producers facing thin margins.

Local governments push back: County officials and municipal groups testified that cutting agricultural valuations statewide would require taxing subdivisions to raise mill levies or cut services. John Cannon, executive director of the Nebraska Association of County Officials, told senators the bill “would reduce valuation statewide by about $35,200,000,000,” and that the lost valuation must be made up by higher levies or reduced local services.

Education sector concerns: Representatives for school districts, community colleges and ESUs said the bill would reduce local revenue available for schools and shared services. Connie Conneoche of the OpenSky Policy Institute testified that modeling showed levy increases could wipe out much or all of the intended relief in some districts and that at least 56 school districts could not make themselves whole under current levy authority without further state action.

Proponents’ view: Agricultural groups including Nebraska Farmers Union and the Farm Bureau argued the current system — Nebraska assesses ag land as a percentage of market value — no longer reflects agricultural earning capacity. John Hansen of the Nebraska Farmers Union told the committee voters and courts previously blocked an earnings‑capacity system and that percentage‑of‑market has been a pragmatic compromise since then.

Committee questions and next steps: Senators asked how the proposal would interact with levy caps and equalization aid. Brandt said TEOSA equalization triggers would offset pressure for some high‑ag districts and signaled willingness to amend the bill to protect bond obligations and community college capital levies. No vote was taken during the hearing; proponents and opponents requested more fiscal detail and local modeling.

What’s next: The committee will consider how to balance local fiscal impacts with the bill’s intent to ease property‑tax pressure on farm owners. Brandt indicated he would stay available to draft targeted carve‑outs for existing bonded indebtedness and community‑college constraints.