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Nebraskans desperately need property tax relief. Over the past ten years property valuations on agricultural land have increased 252 percent statewide and taxes have increased 162 percent. Meanwhile, valuations on residential properties have increased 40-50 percent. The State of Nebraska currently ranks as the seventh worst state in the nation for property taxes. But, as bad as these state rankings seem, they do not accurately reflect the kind of desperation that so many Nebraskans feel once their property tax bill becomes due. The fact of the matter is that our State is on a trajectory which it can no longer sustain.
Last year my bill (LB829) was criticized because I offered no way to pay for the $1.2 billion in property tax relief mandated by the bill. In response to this, let me assert that any property tax relief bill which proposes a way to “pay for it” without making cuts in the State’s budget amounts to nothing more than a tax shift. What these critics fear more than anything else is making cuts to the State’s biennial budget. Moreover, any bill which identifies a way to “pay for it” by making specific budgetary cuts automatically picks a fight with that particular group, and nothing scares these critics more than a fight.
The fact of the matter is that State legislators will never make any significant budgetary cuts until they are forced to do so. Cutting any budgetary item amounts to political suicide for these kinds of weak politicians. Therefore, the only way to get the kind of property tax relief we need is to mandate property tax relief and force the Legislature to decide later where to make the necessary budget cuts.
To help you see this, consider what the Legislature did in 2016 to the property tax cash credit fund. The property tax cash credit fund was established in 2007 as a way to divert revenue from the State’s General Fund towards property tax relief. LB958 was passed in 2016 and shifted $20 million more from the General Fund to the property tax cash credit fund, increasing the State’s contribution to $224 million. But, when State revenues fell short that year, the Legislature decided to make property owners pay for it. Despite the mandate of LB958 to increase the State’s contribution to $224 million, they only increased it to $221 million. Instead of cutting other budgetary items to pay for the mandate of LB958, State legislators found it easier to transfer the burden onto the taxpayer by cutting their relief.
Politicians without backbone will continue to stand in the way of giving you the property tax relief you need. For instance, Governor Ricketts has refused to endorse any bill providing taxpayers with substantive property tax relief, and Bob Krist never introduced a bill for property tax relief during his nine year tenure in the Nebraska Legislature. Last year Sen. Jim Smith of Papillion, who served as chairman of the Revenue Committee, along with the other members of the Revenue Committee, refused to advance my property tax relief bill (LB829) out of committee, and Reform for Nebraska’s Future, led by former Lincoln City Councilman, Trent Fellers, suddenly ended the petition drive to put the same measure on the November ballot. These kinds of politicians only validate Benjamin Franklin’s old adage that, “…in this world nothing can be said to be certain, except death and taxes.”
But there is hope for the future. In January I will introduce a Constitutional Amendment to permit property owners to get a 35 percent credit or refund of their property tax bill when they go to file their State income taxes. The Revenue Committee will have a new chair next year, so there is a ray of hope of passing this through the Legislature. I am also pleased to announce that Nebraska Taxpayers for Freedom has begun a new petition drive to put this same Constitutional Amendment on the ballot for the 2020 election. Please be assured and know that property tax relief remains my highest priority in the Nebraska State Legislature.