Nebraskaland Days is in full swing, and once again, the region is playing host to many visitors who travel from all over to be a part of the festivities. I was really pleased that Governor Pillen chose to host one of his property tax task force meetings here in North Platte. Until now, all the meetings have been held in Lincoln at the Governor’s residence. This task force includes a cross-section of Nebraska State Senators from across the state consisting of Revenue Committee members, a member of the Appropriations Committee, a former State Senator, and a few members at large that served on the task force held last summer. The goal is to get a bi-partisan consensus from this group and then share the conclusions with the rest of the members of the Legislature to determine if there are 33 votes to pass the proposal.

Because the most recent meeting was held on Thursday morning in North Platte, many of the members arrived the night before and were able to join us at the Nebraskaland Days rodeo on Wednesday evening. It was a wonderful opportunity to showcase North Platte and the Buffalo Bill Rodeo. The Governor rode a horse in the rodeo’s grand entrance and First Lady Suzanne Pillen joined Julie and I in the carriage, along with State Treasurer Tom Briese and his wife, Joan. Everyone in attendance had a wonderful time.

In addition to holding the task force meeting in North Platte, the Governor also held a town hall on Thursday at Mid-Plains Community College. I was happy that approximately 50 residents attended the meeting and expressed their views. I must say that the comments from the group helped to demonstrate why it is so hard to fix the problem. Although everyone wants to see lower property taxes, there was very little consensus on how to achieve that goal.

If we want lower property taxes, we need to do one of two things (or both). We must lower spending, or we must find alternate funding for expenditures supported by property tax dollars. All state funds are already allocated, so if we wish to redirect those funds to property taxes, we must reallocate funds or raise more revenue. We can raise more revenue by increasing other tax streams, raising fees, or growing the economy at a faster pace. I have always believed that since sales taxes generate far less funding than both property and income taxes, this should be the first place to look. Having a broad tax base that includes all three forms of existing tax categories is, in my mind, the fairest way to fund public needs. But no matter how we generate the funding, we must slow spending if we ever want to get ahead.

Although the task force is still working on a final plan, I can tell you that I would personally favor a plan that would slightly lower sales tax “rates” at the state level but broaden the base. The base could be broadened by removing many of the items that were once on the sales tax rolls but since removed over the ensuing years. I also believe that these new items should not include business or agricultural inputs and should not include groceries, medicine, or essential living expenses such as rent and utilities. By keeping these exemptions, a very small portion of the remaining disposable income of the average household would be subject to any new sales taxes.

If we can raise new revenue, those funds could then be combined with the current LB1107 tax credit to fund direct property tax relief. This will not only help homeowners and ag producers, but renters will also see relief when landlords no longer have to increase rents dramatically to keep up with climbing property taxes.

The Governor has publicly discussed the concept of having the state take over public school funding in much the same fashion as we recently took over the funding for community colleges. Under this plan, operating funding would come solely from the state, with local property taxpayers only paying for existing bonded indebtedness. Any new bonding would be subject to a bond election. This would significantly lower the mill levy for public schools, which in turn would lower your property taxes.

I would also be in favor of capping local spending by tying it to the rate of inflation plus “real” growth. Real growth would be defined as any new tax base created by new construction as opposed to increasing in values of existing property due to inflation. As I have said on many occasions, we have a spending problem that must be curbed. Without spending reforms, our tax problem will never be solved, regardless of the form of taxation.

I look forward to continuing to hear from you regarding issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or 402-471-2729.