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In 1966, the good people of Nebraska had grown tired of paying high property taxes. They collected the needed signatures on a ballot initiative and they put the question on the November ballot. By a margin of 50.89% to 49.11% the people of Nebraska passed a constitutional amendment that did away with the “State Property Tax.”
At that point in time, the state property tax was nearly the only source of revenue for all forms of government in Nebraska, including the state government. When the first session of the 50th Legislature met the following January in 1967, they began the session without any revenue to run the State of Nebraska. The newspaper editorial pages at the time were filled with predictions of doom. Many described the situation as a “crisis” for Nebraska.
The Republican Governor, Norbert “Nobby” Tiemann, introduced two bills that created the state income and state sales tax. Opposition to the income tax was so fierce, the hearings for the bills took days as the line of people to testify stretched around the block. For the first time in history the Nebraska Republican Party did not endorse a sitting republican governor for re-election. They endorsed his primary challenger instead. The resulting political battle during the primary so wounded Governor Tiemann, he lost the general election to the Democrat J. James Exxon.
Today, fifty-six years later, we find ourselves in a similar situation. Property taxes are strangling the #1 industry in our state – agriculture.
Family farms and ranches are going bankrupt trying to pay their property taxes. People and businesses are fleeing Nebraska or not moving here in the first place because of it. In the six years I have had the honor of representing the 43rd District, the legislature has only had the votes to pass economic development programs that spend many thousands of tax dollars to attract businesses to our high-tax state, only to create a handful of jobs.
The first session of the 108th Legislature will begin in about five months. There is reason to be optimistic the coming election may finally produce the votes we need to effectively address the property tax crisis. How we fund K-12 public education in Nebraska has to change. Property taxes are too high in Nebraska because we depend on them far too much to fund our schools.
I really like Senator Erdman’s consumption tax idea. Other senators have also introduced some good bills that have fell short by only a few votes over the years. I’m confident many of these ideas will be re-introduced next session. I am giving serious thought to re-introducing my proposed constitutional amendment to place a limit on how much property tax can be used to fund public schools. As things are now, there is no constitutional limit placed on their use. Government abusing an unlimited source of tax revenue shouldn’t be surprising to anyone. We need to change the focus of public policy from those who spend the taxes to those who pay the taxes.