Editor's note: This is the second in a two-part series.
Sometime in mid-September, Seward County property owners will receive pink postcards inviting them to a public hearing on property taxes.
The Seward County Board of Commissioners on July 9 scheduled a public hearing at 7 p.m. Sept. 23 tentatively at the Harvest Hall on the Seward County Fairgrounds. That facility should comfortably handle a crowd if more than the 100 or so people who came to last year’s hearing show up.
The Nebraska Legislature in 2021, 2022, and 2023 created and revised a specific timeline and manner for budget information to be shared (Chapter 77-1633 of state statutes).
The Nebraska Legislature mandates the postcard hearing, as well as the pink postcard notices that give the hearings their informal name. Seward County Clerk Sherry Schweitzer and her counterparts in 92 other counties are the official hosts.
With admitted sarcasm, District 24 Sen. Jana Hughes of Seward, dubs the event a “Pink Postcard Party.” She was elected to the Legislature after the hearings were mandated
“If I had been in the legislature, I would not have voted for that,” she said.
While she could not attend Seward County’s 2023 Postcard Hearing, Hughes experienced one elsewhere in District 24.
“They get testy. They can get really ugly,” she said.
Some say that may have been the intent for some advocates of the system.
“It could be done better,” Hughes said.
The postcards are to include prescribed language, as well as individual property taxpayers’ information related to their property, assessed valuation, amount of taxes due for the current tax year and the amount of change from the previous tax year.
The mandate includes how information is shared on websites and other information sources, too.
The representatives required to present budget information at the hearing are from entities proposing more than a 2% increase in the tax funds being requested beyond the “real growth” that comes from new housing or other developments.
The hearing is one of the last steps in setting the county’s property taxes for the next year. After the hearing, the county and other taxing bodies have to give final approval to their budgets, which translate into tax rates for the county, cities, villages,
school districts, fire districts, educational service units, airport authorities and any other property-tax funded entity.
If any changes are made after the Postcard Hearing, the county will make changes to the tax rate calculations to forward on to the state by the deadline of Sept. 30.
The data sent to residents on the postcard includes the proposed tax rates for the county, which are derived from the proposed budgets advanced by school boards, county commissioners, city councils and other governing boards using each entity’s property valuations as a denominator.
As noted in the first article in this series, Seward County Commission Chair Misty Ahmic, Commissioner Raegan Hain and County Clerk Sherry Schweitzer have been working with city, village school and other leaders around the county to get the word out about the process and make residents aware of the process and their options to address budget issues.
A partial list of budget discussion and hearings between July and the Sept. 4 deadline for their budget hearings was included in the July 10 Independent article.
Timing, costs are pain points
Those who work with budgets and the Postcard Hearing say timing, costs and misunderstandings about how taxes are set create pain points in the process.
Timing is one of the key issues noted by those interviewed for this series, and Hughes agreed.
“You can’t change anything by this time,” Hughes said of the Postcard Hearing.
Departmental and program budgets have been set and there is little time to revisit the budget process and make changes before state deadlines. Each of the taxing entities has likely held their own hearing before the Postcard Hearing.
Cost is another concern
Postcard printing, postage and staff time are to be charged proportionately to the subdivisions participating based on property parcels in each subdivision, which are then reflected in the tax statements for each.
Schweitzer estimated the 2023 postcard hearings cost Seward County taxing entities around $500,000.
Hughes noted the steps Seward County leaders are taking to educate residents about the process before this year’s hearing.
“Seward County is being super proactive and I applaud them for it,” she said.
Hughes said she recalls maybe one person coming to a budget hearing during her time on the Seward School Board.
She encourages people who are interested in the tax rates to show up at school board and other meetings to learn about the budgets and ask their questions while the work is being done.
Also, the multiple steps and calculations involved in setting tax rates can be confusing.
People at past Postcard Hearings complained about their property valuations, but the appeal process for valuations is a separate and earlier step in setting tax rates. Nebraska residents have until June 30 to appeal their valuations to to their county boards of equalization.
The county board hears appeals filed by that deadline in July.
Valuations are the start of the tax process in January, when the county assessor’s office begins its annual review of property values.
Nebraska agricultural land is valued at 75% of fair market value for tax purposes compared to 93 percent for other property classes. Property tax homestead exemptions or credits are available to some Nebraskans based on age, some veteran categories and disabilities, and developmental disabilities.
An increase of X percent in property valuation does not mean taxes will increase by the same percentage. That is dependent upon the tax levies. A property owner with a taxable valuation of $200,000 will be taxed twice the amount of a property owner who lives in the same tax districts with a taxable valuation of $100,000, not factoring in homestead and other potential exemptions.
Seward County Assessor Marilyn Hladky said as of July 12, the tentative valuation of all property in Seward County is $3,788,963,577, which is a 5.5% increase over the 2023 total of $3,591,267,275. However, the $3.7 billion total will likely change prior to the deadlines for public budget hearings because the state will update valuations on railroads and other utilities by Aug. 10, property owners are still updating their reports that were due in May, and the county is still reviewing the valuation protests.
The valuations change fairly constantly, she said, and while she receives the state data Aug. 10, she cannot pass detailed information on to school districts, cities and other budget-preparers for at least another week as she enters and balances the numbers in the database for each taxing division.
When the valuations at the specified reporting date are available, the calculators will be working to determine each entities proposed levies based on the proposed budgets taxing entities submit to the county by Sept. 4.
To determine tax levies for the Seward County budget – which impacts all county residents – the county assessor totals all taxable property valuations and divides the county’s budget into it, providing each taxpayer’s share.
But it remains simple only for the county-wide totals. The budget required for each entity on which a property owner must pay taxes determines their overall share of the taxes. Neighbors could live in a different school or natural resource district and will have different taxes applied to their annual tax statement
Tax rates depend on the cafeteria-style mix of taxing entities in which a property is located.
An example shared by Ahmic would have a Milford resident in the Milford School District and within the Upper Big Blue Natural Resources District being taxed: $1,900 for Milford School District, $964 for the city of Milford, $585 for Seward County, $61 for the Fire District, $42 for Upper Big Blue NRD, $31 for Educational Service Unit 6, and $21 for the Seward Ag Society.
That totals $3,583 or 1.79 percent of that property’s $200,000 valuation.
But tax rates for a $200,000 property in Seward will have a different selection of tax entities listed based on location. For example, a Seward property owner’s statement could also include their school and natural resources districts, but also the Seward Airport Authority.
These are the amounts listed when property owners receive their tax statements through the Seward County treasurer’s office. Each year, property taxpayers receive a list of the taxing entities in which they live and the amount of taxes to be collected for them based on their property valuations.
