NEBRASKA LEGISLATURE
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Sen. Mark Kolterman

Sen. Mark Kolterman

District 24

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Weekly Column – April 6th

April 9th, 2018

Since being elected, I have worked with my colleagues on many important issues. One of my priorities has been to lower property taxes. They are too high and impact every individual who owns property, from our retired senior citizens to our farmers and ranchers who depend on their land to make a living. Unfortunately, agriculture land owners have been more adversely affected by property taxes due to a combination of increasing land values and declining revenues from sagging commodity prices.

In reality, there is no quick fix to reducing the property tax burden. The only way we will be able to achieve meaningful property tax relief is through building a broad coalition of Senators representing both urban and rural interests. This is necessary because my colleagues representing urban communities will tell you that they are looking for income tax relief. I also have a few colleagues who do not want any tax relief – property or income.

Having reached the 56th and final day for General File debate, I thought I would summarize the attempt to provide property tax relief. There were several major tax reform proposals introduced during this Legislative session:

  • LB829, commonly referred to as the 50/50 Tax Plan, was introduced by Senator Steve Erdman. It would provide Nebraska’s property tax payers with an income tax credit equal to 50 percent of the school property taxes they pay. It would offset about 30 percent of the average taxpayers’ total property tax bill. It would generate a $1.1 billion budget shortfall next year.
  • LB947 is a comprehensive property and income tax reduction bill Senator Jim Smith introduced on behalf of Governor Pete Ricketts. It would eliminate the state’s current property tax credit program replacing it with a refundable state income tax credit equal to 10 percent of property taxes paid for Nebraska homeowners and agricultural land owners. The bill would also reduce the top individual income and corporate tax rates.
  • LB1084 introduced by Senator Tom Briese would direct an additional $234 million to the property tax credit cash fund and increase state aid to schools by $144 million in fiscal year 2018-19. It would pay for the property tax credits and school funding by increasing the state sales tax from 5.5 percent to 6 percent and the cigarette tax $1.50. It would also impose new sales and use taxes on more than a dozen services while eliminating several state sales tax exemptions.

All three bills were referred to the Revenue Committee, which I am not a member. The committee advanced an amended version of LB947 to the floor of the Legislature on a 5-3 vote. In addition to retaining the state’s current property tax relief credit program, the revised bill adds a refundable state income tax credit starting at 2 percent of property taxes paid on agriculture land and would gradually rise to 20 percent. The total relief for agriculture land would eventually reach 30 percent. For homeowners, the credit would begin at 1 percent of property taxes paid and gradually increase to 20 percent. The maximum credit for homeowners will be $500. It also creates a dedicated source of work force development funding of $5 million annually. We briefly debated LB947 for three hours last Tuesday. Unfortunately, the tax reform bill was filibustered and we were unable to have a meaningful debate on the proposal.

There were two bills, LB640 and LB1103 that would have provided property tax relief by modifying the Tax Equity and Educational Opportunities Support Act (TEEOSA) formula. Both bills were referred to the Education Committee and were advanced to General File. LB640 was introduced by the Education Committee Chair Senator Mike Groene. It would reduce the maximum levy for school districts from $1.05 per $100 of taxable valuation to $.987 per $100. It would use the state’s property tax credit cash fund – which is funded by state income and sales taxes – to direct more state aid to school districts that lose money as a result. LB640 was filibustered and failed to advance a few weeks ago.

Introduced by Senator Curt Friesen, LB1103 would provide a minimum amount of state aid to each local school district. The amount would be 25 percent of local school district basic funding. This legislation also failed to advance when an amendment was filed on it to include LB1084, triggering a filibuster.

Following the LB1103 debate, Speaker Jim Scheer expressed his disappointment in a lack of substantive debate on property tax relief during this session. He announced he was placing LB640, LB947 and LB1103 on the agenda for debate on Monday, April 9th. In a last ditch effort to develop a compromise, Speaker Scheer will meet with Senators on Saturday. While I am not participating in the meeting, I am hopeful there is something we can debate on Monday.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Todd and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance.

Sen. Mark Kolterman

District 24
Room #2004
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2756
Email: mkolterman@leg.ne.gov
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