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I have spent the entire summer traveling around the district going to county fairs and community celebrations, by far the most talked about issue is property taxes. With the next legislative session set to begin in January, I have no doubt this issue will be front and center on the minds of most of my colleagues in the legislature. I have visited with many of my fellow Senators and a majority of them are hearing the same thing. We need property tax relief!
There are several ideas being floated on how to accomplish this. One, is the idea to provide for an income tax credit or refund of 50% of the real estate taxes you paid to support your local school district. K/12 Education accounts for roughly 60% of your total property tax bill. As an example, if you paid $1000 in property taxes and 60 % or $600 went to support your local school, you would be entitled to a $300 income tax credit or refund. This sounds great until you look at the price tag of $1,000,000,000, (ONE BILLION DOLLARS) or more. That is a lot of tax shifting! Of course everyone wants to cut their taxes but we will need to make up for at least a majority of that lost revenue from expansion of the sales tax base or the elimination of sales tax exemptions, because there is no appetite for raising income taxes. We are currently funding the Property Tax Relief Fund to the tune of around $240,000,000 per year. Therefore, we will need to come up with the balance through a combination of spending cuts and increased sales tax revenue. Another down side is if a school district knows that half of any budget increase will be paid for by state tax revenue and not local property taxes it could be very tempting for the local school board to increase their budget. Especially, if the potential of less criticism from the district property tax payers was a possibility.
The hope of the proponents of this solution is to push this plan through the legislature next session and deal with the consequences in following years. If they are unable to get it through the legislature they will try to take it to a vote of the people in next fall’s election. Who is going to vote against cutting their property taxes? This plan is aimed at cutting everyone’s property taxes not just agricultural property tax payers. I am curious to know what the people of the 44th District think about this plan. Are you willing to pay sales tax on food in order to get property tax relief? Are you willing to pay sales taxes on services like attorney fees, haircuts, accountants’ fees, beauty salon purchases, and repair parts for your machinery, car, or pickup truck?
In upcoming articles I will be informing you about other plans that are being floated as possible property tax relief proposals. As always I encourage your feedback on the topic of my columns. I will continue to be out and about in the district this fall or you can call my office in Lincoln at 402.471.2805 or you can email me at email@example.com.