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Since mid-February, the revenue committee has now held hearings on four more bills I introduced to that committee as part of a comprehensive look at ways we can begin to address the property tax crisis. I’ll briefly cover each proposal, and also give you an overview of what I expect to see coming out of the committee in terms of tax relief.
LB314 probably got the most attention of any of my bills so far this year, and understandably so: if passed as introduced, it would represent a significant change to the reliability of K-12 education funding, a comprehensive alteration to our state tax structure, and would nearly tripled the amount of money every homeowner, farmer, and non-ag business owner receives from the property tax credit fund. The bill had its share of opponents, as any change to tax structure is bound to, but I was also glad to see that representatives of education groups, ag groups, and everyday property taxpayers all came out to support it.
LB507 and LB508 are very similar bills which serve the same purpose: close loopholes in our sales tax law and direct any new money as a result to the Property Tax Credit Fund. Every fiscal policy group I’ve come across, from the OpenSky Policy Institute to the Platte Institute to the Tax Policy Center, agrees that the best sales tax must be applied broadly to almost all consumer purchases. Various groups, of course, take different approaches to whether necessities like medical expenses and food should be included. Most agree that business inputs should be excluded. Both of these bills would close dozens of loopholes in our sales tax code, carved out over decades by special interests and lobbyists. When one purchase is arbitrarily not subject to sales tax while others are, the state collects less money. The more this happens, the less money the state has to spend on things like K-12 education and state services. The best policy is to close all of the loopholes at once, so that no one group or industry is singled out. This, of course, is easier said than done: the common refrain from almost every special interest at these hearings is “good tax policy dictates a broad base, and almost all transactions should be subject to tax. Now, here’s why my carve-out is special….” I appreciate the hard work that many of the lobbyists for these special interests do to protect special treatment for their clients, but at the end of the day, when property taxes are starting to have a crushing impact on our state’s economy, we simply cannot maintain that special treatment.
Lastly, LB506 is a comprehensive tax asking cap on K-12 property tax requests which would ensure that any new money directed to K-12 education would result in a corresponding drop in property taxes for all Nebraska taxpayers.
Now, there are a lot of competing property tax relief proposals out there. I expect to see the aspects of my bills, and the aspects of others’ bills, which are most likely to have traction in the body be put together into a comprehensive package. When everyone has contributed a piece to the whole, and when everyone has several things to like -and maybe a couple of things to dislike- about a proposal, it has a better chance of passage than one single concept from one person.
I’m glad this year to be serving with great colleagues on the revenue committee, and very grateful that the body elected someone like Sen. Linehan to chair the committee. Working together, and keeping the best interests of all Nebraskans at heart, I am confident that this year will be the year that a meaningful step forward for property tax relief has a fighting chance in Lincoln.