Understanding property taxes and how they fund public schools is essential for homeowners and landowners in Nebraska. This tutorial will help explain how property taxes are calculated, mainly focusing on Crete Public Schools (CPS), and how their tax levy has changed over time.

1.    Property Valuation and Tax Rates

Property taxes are determined in Nebraska based on the property's assessed value. The local county assessor (in this case, the Saline County Assessor) sets the assessed value, which becomes the basis for calculating taxes. The percentage of the property’s value that is taxed depends on the type of property:

• Residential Property: Taxed at 92% of its assessed value.

• Agricultural (Ag) Land: Taxed at 75% of its fair market value.

2.    Calculating Property Taxes

Once the assessed value is determined, a tax levy is applied. The levy, which is the amount of tax per $100 of taxable value, is set by local entities like school districts, cities, counties, and ESUs. It can vary from year to year based on budgetary needs. The levy is ultimately voted on and decided by the Board of Education. The Board, working in cooperation with the superintendent and the chief financial officer, ensures the needs of the school district are met and balances those needs with responsible fiscal oversight to the taxpayer.

Example: Crete Public Schools

For the 2023-2024 school year, Crete Public Schools had a property tax levy of $1.075 per $100 of assessed value. This levy includes bond payments, which were approved by a vote of the people to build Crete High School.

For a residential property, here's how taxes are calculated:

• Assessed value: Suppose a home is assessed at $100,000.

• Taxable value: Since residential property is taxed at 92%, the taxable value would be:

$100,000 x 0.92 = $92,000

• Tax amount: With the 2023-2024 levy of $1.075:

$92,000 x ($1.075/100)  = $989

You would owe $989 in property taxes for the school district that year.

For the 2024-2025 school year, the tax levy is reduced to $1.04 per $100 of assessed value. Here’s the updated calculation:

• Taxable value: Still $92,000 (assuming the property value remains unchanged).

• Tax amount: With the new levy:

$92,000 x ($1.04/100) = $957

 So, for 2024-2025, you would pay $957, reflecting a reduction.

The CPS Board of Education had the authority for the 2024-2025 school year to take the levy to $1.14, an increase of nearly $.08 from the previous year. Instead, they chose to decrease the levy by $0.03.

3.    Agricultural Land

The same method applies to agricultural land, except that it is taxed at 75% of its fair market value.

4.   Crete Public Schools Levy Reduction Over Time

In recent years, Crete Public Schools has worked to reduce the tax levy, providing savings to the community. In the 2018-2019 school year, CPS requested a total tax levy of $1.25 per $100 of assessed value. As of 2024-2025, the levy has been reduced to $1.04 - a decrease of $0.21.

This reduction was made possible through a combination of:

• Refinancing the bonds issued to build the high school at lower interest rates, reducing long-term costs.

• Fiscally conservative management, ensuring that spending is only directed toward necessary items.

• Careful financial planning, to maintain quality education while reducing the tax burden.

5.    Who Determines Assessed Values?

It’s important to note that Crete Public Schools does not set the assessed value of your property. That responsibility belongs to the Saline County Assessor, who assesses properties based on market trends and other factors. The school district only determines the tax levy based on budget needs, while the assessed value is handled separately.

6.   Summary of Key Points

• Residential properties in Nebraska are taxed at 92% of their assessed value, while agricultural land is taxed at 75% of fair market value.

• The tax levy is applied to the taxable value to determine how much you owe in property taxes.

• Crete Public Schools had a levy of $1.075 per $100 of assessed value for 2023-2024 and has requested $1.04 for 2024-2025.

• The levy has decreased from $1.25 in 2018-2019 to $1.04 in 2024-2025, a savings of $0.21.

• These savings were achieved through bond refinancing, conservative spending, and responsible financial management.

• County assessors determine property values, not the school district.