The budget has dominated the atmosphere in the Legislature the past two weeks, and as the budget discussions go on, I will continue to keep property tax relief as my number one priority. I maintain that to attain the substantial and significant property tax relief Nebraskans deserve, we must replace some property tax revenue with other sources, and we must also reduce spending. Last week in the Legislature, I had an opportunity to discuss both approaches.
Nebraska law limits the maximum property tax levy a school district can impose, and it limits the growth of school budgets, both with some exceptions. One such exception is for money used in voluntary separation agreements with certificated employees. These agreements are used by school districts to encourage employees to retire by offering them buyouts. My LB 457, merged into LB 512, was an attempt to put the funding of those deals back within the levy and budget growth limits, like almost all other school district spending.
LB 457 would still allow the use of these agreements, but we owe it to the taxpayer to require such agreements to be paid for within the tax levy and budget restrictions. To those schools impacted, I maintain that a district would have to either reprioritize its spending or take that increase in spending to an override vote of the people. The Legislature debated the issue twice in recent weeks, and debate was heated both times. I offered an amendment, which was adopted 33-0, to give districts three years to comply with the bill.
Last Tuesday, as the day turned into evening, Omaha Senator Burke Harr threatened a filibuster of the bill. Several senators were absent at that time, so we didn’t have enough votes (33) to withstand a filibuster, and had to agree to an amendment by Senator Harr which would still allow these agreements to be utilized outside of the tax levy lid and budget limit, but with some restrictions. In criticizing this compromise, I asked if it made sense to require money spent to improve education for our children to be within the levy limit, while allowing funding for retirement agreements to be unlimited.
The same day, we discussed LB 640, a bill to limit school funding derived from property taxes. Property Tax Credit Fund dollars were to fund this. I offered an amendment to expand the sales tax base, and eliminate a couple of income tax exclusions rarely used by a handful of Nebraskans, and use those funds to replenish the Property Tax Credit Fund. We began debate on my amendment, but didn’t get a chance to vote on it or the bill itself, when the time limit of three hours expired. LB 640 may or may not be debated again.