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Nebraska's Charles Herbster paid property taxes late nearly 600 times

Candidate for governor says he was late on property taxes to keep employees paid; some disagree with his excuse
Posted at 6:00 PM, Jun 03, 2021
and last updated 2021-06-03 21:05:48-04

FALLS CITY, Neb. (KMTV) — Nebraska gubernatorial candidate Charles Herbster lives most of his time in the state at a $1.5 million condominium on the Omaha riverfront or at a $300,000 home in his native Falls City.

He spent much of the past couple of years flying in chartered planes with campaign surrogates and family members of former President Donald Trump. He’s donated millions to political candidates.

He runs agribusinesses in several states, including Conklin Co., in Minnesota and Missouri, and Herbster Angus Farms in Nebraska. He owns a $500,000 “guest home” in Kansas City.

He and some of his companies also have a history of paying property taxes late – sometimes years late. Here’s what 3 News Now Investigators found in a quarter-century of property records from six states:

Herbster and his businesses have been late nearly 600 times on property taxes, tax payment records show. No place has seen more late payments than home, Richardson County, Nebraska.

That’s where Herbster grew up, and where he still owns and operates Herbster Angus Farms. Our reporting identified at least 29 properties Herbster and his companies own there.

He and his privately held companies have paid their local property taxes late at least 529 times since the mid-1990s, Richardson County tax records show.

The Richardson County Treasurer’s Office in Falls City confirmed the late payments we identified from the past decade and showed us where we could check the rest.

In May, the county treasurer confirmed our reporting that many of Herbster’s local properties had late payments as recently as 2018, which Herbster blamed on confusion after his wife, Judy, died in 2017.

The owners of about 600 of Richardson County’s 10,000 properties pay their taxes late, in a given year. That number climbed above 700 during the pandemic year of 2020.

Herbster argues that he made a “conscious choice” to pay his property taxes late, saying he did so to offset cash flow problems after his family purchased Conklin from its original owners in the 1990s.

He made part of that argument during his formal campaign announcement in April. He already knew 3 News Now was digging into his past payments. He recalled his wife having to work two jobs at the time.

He now says the cash flow problems lasted at least two decades: “It was difficult most of the 29 years we owned the business until about the last five to seven years.”

He said he had to decide in many of those years whether to keep 20,000 Conklin distributors and his employees paid on time or paying his property taxes late.

"I didn’t want to do either, but I can tell you it was an easy decision for me,” he said.

Jon Cannon, Executive Director of the Nebraska Association of County Officials, says his records show that fewer than 1 in 10 properties in Nebraska post late property tax payments, in a given year.

Only about 2% wait so long that they risk more than a penalty. Those properties go to tax sale, which means an investor can pay the principal amount of taxes owed and redeem the property after three years.

Property owners who pay up before their properties go to tax sale pay 14% interest. Herbster said he had no choice but to pay, that he “couldn’t borrow any money from the bank.”

“Today I can sit here and say guess what, we almost went bankrupt three times,” he said. “But I’m proud to say today that Conklin is successful.”

Despite the interest collected from landowners and investors, local governments and school districts do face challenges when large landowners pay late, Cannon said.

“The political subdivisions, when they set up their budget, they say here’s the value they have to levy against, that’s going to leave a little bit of a hole in their budget,” he said.

Herbster and his firms also have paid late in other states, including taxes on property in Virginia, Iowa and a Kansas City home he says he’s only spent a couple nights at since his wife died.

He nearly lost two properties in Colorado for being years late paying his 2008 property taxes. Unfinished paperwork by a buyer at a tax sale let him hold onto both parcels by paying off his taxes in 2013.

One place Herbster has never been late is on his 11th floor condo overlooking the Bob Kerrey Pedestrian Bridge. Conklin, Herbster’s best-known company, owns the condo and pays its taxes on time.

Douglas County records show Conklin paid a range of taxes on the condo, from $23,193.80 in 2015 to $31,019.80 in 2020.

Herbster said he wouldn’t change a thing about how he paid his taxes. He stressed the importance of keeping the business going. And he said he promised his grandmother he would never sell off land.

“It really didn’t hurt anybody except me,” he said. “It didn’t hurt the county, because they actually had a good investment at a high interest rate of money.”

Several Republicans who declined to speak to us on camera said they didn’t buy Herbster’s explanation. They said he could’ve cut spending elsewhere, including political donations.

In 2014, for example, Herbster was late on more than $36,000 in Richardson County property taxes. That year, he gave Nebraska gubernatorial candidate Beau McCoy nearly $2 million for his run.

We asked Herbster how he has found the money to donate millions to political candidates, including former President Donald Trump, but not to pay his taxes on time.

“I’m always going to choose people first,” he said. “I was going to do everything possible when they asked me for help. I guess probably maybe my No. 1 mistake in my life is it’s hard for me to say no.”

Herbster’s highest-profile opponent in the 2022 Republican primary for governor, University of Nebraska Regent and hog farmer Jim Pillen, declined to comment.

So did State Sen. Brett Lindstrom of Omaha, who is mulling a run. Gov. Pete Ricketts, who has criticized Herbster before, also declined to weigh in.

Many Nebraska Republicans we spoke with said they were wary of taking sides in a GOP primary that Herbster could win.

Jane Kleeb, chairwoman of the Nebraska Democratic Party, said Republicans appear afraid of their base, which backs Trump and might like Herbster.

She said Herbster’s cavalier attitude about his taxes offers Democrats an opening in 2022, once they get a capable candidate in the race. None have yet kicked off campaigns.

“You have paid your property taxes late more than 500 times,” she said of Herbster. “That is a pattern. That is a habit. It is an indicator that you’re unfit for office. It means that we can’t trust you.”

Herbster, told of Kleeb’s criticism, smiled.

“There are many people who did everything perfectly, did it by the book, and I applaud those individuals,” he said. “But as a governor, I also have a huge understanding for those people who couldn’t do it and couldn’t make it. And unless you’ve walked in those shoes, you just don’t get it.”

Watch more from 3 News Now Investigator Aaron Sanderford's interview with Herbster.

Extended interview: Nebraska's Charles Herbster paid property taxes late nearly 600 times

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