Members of the Legislature’s Revenue committee are still striving to craft a property tax reform package most Nebraskans can live with, three state senators told a packed town-hall forum Thursday night in North Platte.
But Sens. Lou Ann Linehan of Omaha, Mike Groene of North Platte and John Lowe of Kearney agreed that rural Nebraskans’ patience has nearly run dry with refusals to compromise by urban leaders and interest groups.
“I really feel we’re risking our future unless we get this under control,” Linehan, who chairs the eight-member tax-writing committee, told about 100 people at the Prairie Arts Center.
“Agriculture cannot forfeit 40 to 50 percent of their income” to property taxes and survive, said the one-time aide to former U.S. Sen. Chuck Hagel, R-Neb. “This will not work.”
Groene, chairman of the Education Committee, urged his audience to apply pressure by backing a petition drive to put a mandatory 35 percent income tax rebate of property tax bills on the 2020 ballot.
“Is it the best policy? It will be if it gets on the ballot,” he said. Though he’ll keep working toward a comprehensive solution next winter, “I don’t trust the Legislature.”
Groene added that he backs Gov. Pete Ricketts’ proposed constitutional amendment to limit local governments’ ability to tap potential tax dollars based on growth in their service areas’ taxable valuations.
“It’s our money, and the governments are taking it with promises of new jobs and growth,” he said. “We’ve been around long enough to know they haven’t delivered on their promises.”
The Omaha-based Platte Institute, which Groene co-founded, sponsored the 90-minute session. The town hall was free to the public but limited to those who registered in advance.
Also in the audience were Sen. Steve Erdman of Bayard — sponsor of the tax-rebate petition drive — and Sens. Tom Brewer of Gordon, Steve Halloran of Hastings, Dave Murman of Glenvil and Tom Briese of Albion.
As Education and Revenue committee chairs respectively, Groene and Linehan automatically are members of both committees.
Both took leading roles last spring in crafting a tax relief package (Legislative Bill 289) that would boost and reshape state school aid, raise state sales taxes and eliminate sales tax exemptions on pop, candy and a portion of Nebraska’s long list of untaxed services.
Though LB 289 remains on the first round of legislative debate, it was filibustered to the back burner due to objections from the affected interest groups and stout opposition by Gov. Pete Ricketts to raising taxes even to lower other taxes.
Linehan said Revenue Committee members have met periodically this summer — including multiple meetings with Ricketts — in the hope of presenting a revised but broadly supported tax relief bill before the 2020 session.
“That’s a big goal, but we’re not far off,” said Linehan, who represents the Elkhorn area in west Omaha. “I think the governor might look at it if we can broaden the (sales tax) base and lower the rate.”
She addressed the powerful opposition from the state’s largest school districts, who “don’t want to give up any of their tax authority” though they would gain more total state aid under LB 289’s largely Groene-authored changes to the complex aid formula.
Those districts need to realize that “we are not going to provide you with property tax relief and leave you with the same taxing authority you have now,” Linehan said.
Revenue Committee members, she added, are also warning their colleagues on the budget-writing Appropriations Committee not to spend tax dollars a revised LB 289 would collect for property tax relief.
Lowe, whose District 37 covers eastern Buffalo County as well as Kearney, noted the long battle over tax policy since Nebraska voters abolished property taxes for state purposes in 1966. Senators laid the foundations of Nebraska’s sales and income taxes the next year.
“We’ve got one more chance. We’ve got this next year coming up,” said Lowe, who plans to push a bill next year to bring in an out-of-state auditor to find savings in state government.
“If we don’t do anything, if we can’t get this passed in this next session, it’s up to the people of Nebraska to put their vote on a ballot to get property tax relief. Because then we’re forced to do it.”