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This week, I’d like to discuss why I was not supportive of LB 408 – Adopt the Property Tax Request Act. LB 408, as introduced, would limit the annual increase in property taxes, excluding approved bonds, for all political subdivisions to three percent. This limitation would affect every single county, city, village, school district, learning community, sanitary improvement district, natural resource district, educational service unit, or community college across the state.
Since being elected, I have always fought to provide property tax relief to Nebraska. For instance, I was heavily involved in creating the Property Tax Incentive Program, the largest property tax bill in state history, which provides refundable income tax credits for any taxpayer who pays school district taxes. This program will provide $313,672,849 dollars towards property tax relief each year over the next two years and as a member of the Appropriations Committee, I worked to provide additional dollars to the original Property Tax Credit Fund. This year, the Legislature is appropriating $300 million dollars to the Property Tax Credit Fund and in 2022, $313 million dollars. When I was first elected to the Legislature seven years ago, the Legislature was providing $115 million dollars in property relief. When the two property tax relief programs are added together, over $1.45 billion over the next biennium towards direct property tax relief.
Had LB 408 been enacted, different political subdivisions would be affected in different ways. For example, a city could raise other taxes such as occupational taxes or sales taxes to replace any lost property tax revenue, thus shifting the tax load to low and middle-income Nebraskans. Most all other political subdivisions do not have the option to levy taxes other than property taxes, so while our towns and cities would be able to collect additional revenues to make up the difference, counties and our schools do not have this option, so they would likely have to cut services or jobs in order to adhere to the limit in budget growth.
All of our political subdivisions across Nebraska are different. A “one size fits all” blanket creates different outcomes for all of our localities. LB 408 would likely have caused local governments to levy the full 3% in allowed growth every year to build up a reserve in case a large expense is needed in the future, thus, property taxes would not necessarily decrease had LB 408 been enacted into law.
I strongly believe in local control. I was elected by the same individuals who elect our local leaders who are in charge of these budgets. I don’t believe in second guessing the other elected officials who were elected by the same voters who elected me. Voters have the option to address high property taxes when electing those individuals to positions that are responsible for levying property taxes.
I will continue to look for ways to achieve substantial property tax relief for our citizens that is fair and equitable for all, including our taxing entities to ensure critical infrastructure and services are not harmed. Unfortunately, LB 408 did not achieve that goal and therefore, I was unable to support this proposal.