PREPARED BY: John Wiemer
LB 73 DATE PREPARED: August 02, 2024
PHONE: 402-471-0051
Revision: 01
Revised per response from Dept. of Revenue FISCAL NOTE
LEGISLATIVE FISCAL ANALYST ESTIMATE
ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS $2,200,000
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS $2,200,000
Any Fiscal Notes received from state agencies and political subdivisions are attached following the Legislative Fiscal Analyst Estimate.
This fiscal note has been updated to reflect estimates from the Department of Revenue (DOR).
LB 73 would make changes to the Homestead Exemption Program.
The bill would make changes to section 77-3507 so that for exemption applications filed in calendar year 2025 and after the income
eligibility amounts would be adjusted by the percentage change in the House Price Index published by the Federal Housing Finance
Agency from the 12 months ending on August 31 of the year preceding the applicable calendar year.
The income eligibility amounts would be adjusted for cumulative change in the House Price Index published by the Federal Housing
Finance Agency since 2014. If any amount is not a multiple of $100, the amount would be rounded to the next lower multiple of $100.
The DOR estimates the following increa se to General Fund expenditures as a result of this bill.
• FY25: $0
• FY26: $2,200,000
• FY27: $2,400,000
The DOR estimates minimal costs to it as a result of the bill.
There is no basis to disagree with these estimates by the DOR.
The Douglas County Assessor/Register of Deeds Office estimates additional personnel as a result of the bill. Please complete ALL (5) blanks in the first three lines. 2024
LB
(1) 73—Special Session FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Douglas County Assessor/Register of Deeds Office
Prepared by:
(3) Michael Goodwillie Date Prepared:
(4)
7/31/2024 Phone:
(5)
402 444-6703
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
$23,275.20 $23,852.30
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
$23,275.20 $23,852.30
Explanation of Estimate:
LB 73 would, beginning in 2025, replace the CPI with the HPI as the adjustment mechanism for the income
eligibility tables for the homestead exemption program. Homestead eligibility has an income test and, as
income increases, the percentage exemption declines in increments of ten percent. As an example, the
household income for a homestead applicant in the over-65 category who is married to be 100% exempt,
based on income, is $41,000.99. That same applicant would be ineligible, based on income, when household
income exceeds $60,901. The amounts vary depending on marital status (married households have higher
income limits than singe) or whether someone is a disabled veteran or disabled person (those income amounts
are higher in both the married and single categories). Every year, the income tables are adjusted by the
Nebraska Department of Revenue based on the Consumer Price Index. LB 73 would replace the CPI with the
Housing Price Index (HPI) as the measure by which the income tables are adjusted.
In looking at the practical implications of the bill, in recent years, the HPI has moved faster than the CPI. For
example, from March of 2023 to March of 2024, the CPI increased by 3.5% and the HPI by 6.2%. So using the
HPI would increase the income amounts by more than the CPI would, as long as that index is increasing faster
than the CPI. That has been the trend in recent years, although there have been times in the past where that
was not true.
It is hard to estimate the impact of the bill. For one thing, the Department of Revenue does the income review
of homestead exemptions. We do know that for 2023, 712 homestead applications were denied by the
Department of Revenue, we think based on income. So, if the income eligibility limits were to increase, some
portion of those 712 denied applications might qualify. What is hard to estimate is the number of potential
applicants who took a look at the income tables, saw that their income was too high to qualify for even a partial
exemption, and chose not to apply at all. It is even harder to estimate how many would qualify under a new
income limit that might be two or three percentage points higher than if using the CPI. The sense is that there
would be more applicants, more value exempted, and additional tax loss. But determining how many would fit
under newer, slightly higher, income eligibility amounts with any kind of accuracy would require more detailed
demographic and income information than our office has.
Our office thinks there would be more applicants with higher income limits but because there is still a top end
cap on eligibility, not a huge number more—something similar to the number denied based on income of 700.
That would require about half the time of a new staff person—currently we process close to 15,000
applications with nine full-time staffers.
For estimate’s sake, with regard to the tax loss, assume that the 712 that were denied based on income for
2023 were reasonably close to being at least partial qualifiers. Using the average value of a single-family
home in Douglas County, that we might expect to be near $272,000 and expecting those who were denied and might now qualify to be partial qualifiers with a slightly higher income amount. Some of those 712 still might
not qualify, but there might be others who weren’t applying who now are. But using 700 applicants as 20%
qualifiers and an average value of $272,000 represents $29,680,000 in newly exempt value. Multiplied by a
tax rate of 2.245%, that would provide a “tax loss” to political subdivisions of $666,316 in Douglas County.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
24-25 25-26
2024-25
EXPENDITURES
2025-26
EXPENDITURE S
Assessor Support Tech 1/2 1/2 $23,275.20 $23,852.30
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… ..... $23,275.20 $23,852.30
Please complete ALL (5) blanks in the first three lines. 2024
LB
(1) 73 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Lancaster County Assessor/R egister of Deeds
Prepared by:
(3) Dan Nolte Date Prepared:
(4)
70/30/24 Phone:
(5)
402-441-7463
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate:
This legislation does not appear to have a fiscal impact on this office.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
24-25 25-26
2024-25
EXPENDITURES
2025-26
EXPENDITURES
Benefits……………………………… ...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....
LB 73 Fiscal Note 2024
State Agency Estimate
State Agency Name: Department of Revenue Date Due LFO:
Approved by: James R. Kamm Date Prepared: 08/01/2024 Phone: 471-5896
FY 2024-2025 FY 2025-2026 FY 2026-2027
Expenditures Revenue Expenditures Revenue Expenditures Revenue
General Funds $2,200,000 $2,400,000
Cash Funds
Federal Funds
Other Funds
Total Funds $2,200,000 $2,400,000
Major Objects of Expenditure
24-25 25-26 26-27 24-25 25-26 26-27
Class Code Classification Title FTE FTE FTE Expenditures Expenditures Expenditures
Benefits………………………………………………………………………………………………………….
Operating Costs………………………………………………………………………………………………….
Travel……………………………………………………………………………………………………………
Capital Outlay…………………………………………………………………………………………………...
Capital Improvements…………………………………………………………………………………………...
Total…………………………………………………………………………………………………………….
LB 73 amends Neb. Rev. Stat. § 77-3507 so that following calendar year 2024, the homestead exemption
maximum income levels for qualified claimants will be adjusted for inflation according to the percentage change
in the House Price Index published by the Federal Housing Finance Agency instead of the percentage change in
the Consumer Price Index for all urban consumers.
Department of Revenue (DOR) used current homestead data and Public Use Microdata Sample (PUMS) data
from Census to run simulation on the homestead data and estimated that LB 73 will have the following impact on
the General Fund expenditures:
Fiscal Year General Fund expenditures
FY2024-25 $ -
FY2025-26 $ 2,200,000
FY2026-27 $ 2,400,000
It is estimated that there will be minimal costs to the Department of Revenue to implement this bill.
The operative date for this bill is three months after Governor signature. Please complete ALL (5) blanks in the first three lines. 2024
LB
(1) 73 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Lancaster County (Budget & Fiscal)
Prepared by:
(3) Kevin Nelson Date Prepared:
(4)
7/30/2024 Phone:
(5)
402-441-7448
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate:
For the fiscal year ended June 30, 2024, property tax revenue for property with a homestead ex emption
amounted to $2.9M. The impact of this bill on that revenue stream to Lancaster County cannot be eas ily
determined at this time. This bill would have minimal fiscal impact on the expenditures of Lancaster County.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
24-25 25-26
2024-25
EXPENDITURES
2025-26
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....