Lawmakers divided over doing a little or trying something more

Senators in the Nebraska Legislature wrestled with a scaled-down property tax relief proposal Thursday, divided between those who said something is better than nothing, and those who want to try and do something more.

Technically, what the Legislature was considering Thursday was a bill to transfer cash and interest to help the state offset the revenue that would be lost by reducing local property taxes. Right now, that reduction would be about $450 million over the next three years, or about 3% of total property taxes. Sen. Rob Clements said that was better than nothing.

“I am disappointed also that we haven't done more, but I think the choice was between getting nothing or getting something,” Clements said. "And $450 million over three years is something, and I hope we come back next session and do more."

While the average reduction in property taxes would be 3%, it would not be evenly distributed. The majority of Nebraskans who already file for the property tax credit on their income taxes would see no change. But the roughly 45% of people who currently neglect to claim that credit would now get it automatically deducted from their property tax bill, reducing what they owe by about 20%.

Sen. Mike McDonnell said the proposal approved so far was inadequate.

“I had a meeting in Omaha this morning at 7 a.m., and as I was walking in, a couple people stopped me and asking how things are going and what we had been working on and where we are as of today, explaining it to them, their response was ‘That's not enough. That's not enough,'" McDonnell said. "It's not enough."

Sen. Mike Moser agreed, but said it reflects what senators were willing to do.

“The notion that this is only a 3% improvement in property taxes and that that's not enough, so I'm going to get mad and I'm going to go home, going to stomp my feet, this isn't enough,” Moser said. "Yeah, it's not enough, but it's something, and we'll keep trying until we can make substantial difference without having more revenue, there weren't a lot of places to go to find money to offset property taxes."

When the special session started, senators were considering expanding sales taxes by about $600 million to pay for a property tax cut of up to 50%. But that plan was dropped in the face of opposition to the new taxes.

More from the Legislature's special session:

Legislature moves toward budget cuts

Legislature advances vastly scaled-back property tax bill

Legislature tees up key property tax vote for Tuesday

Senators continue thrashing around on taxes

Special session debate: Should there even be a special session?

Sen. Justin Wayne said the latest, whittled down version would do very little.

“We're not really trying to fix the problem. We're kicking the can down the road,” Wayne said.

Wayne blamed Speaker of the Legislature John Arch, who sets the agenda, for scheduling proposals by the Revenue and Appropriations committees for debate before other ideas for raising revenue, such as legalizing marijuana or online sports betting.

“This is a dictatorship," he said. "Nebraskans, your voices aren't being heard. Your voices aren't being heard because the process won't allow your voice to be heard. The speaker has decided to silence you."

Arch said he scheduled the Revenue and Appropriations Committee bills first because they were the closest to the reasons Gov. Jim Pillen gave for calling the special session.

“I made it clear this is what I was going to do," Arch said. "And then I also made it clear that when we are through with that, it is the will of this body. If you want to stay in session to consider other bills, let's go. Let's do that."

Sen. Steve Erdman criticized the property tax measure that has advanced so far, LB34, saying it would merely result in a smaller increase in overall property taxes.

“We keep nibbling around the edges and we keep saying we did something," Erdman said. "So I am now to the point that I don't give a rip if we pass anything. Okay? So I will not be voting for anything going forward – (LB)34, LB1,2,3, whatever you got. I'm out."

The loss of Erdman’s vote could be significant, because he was one of the 34 senators who voted to cut off first-round debate on LB34. It takes 33 to cut off debate and vote on the bill itself, so if Erdman and one other senator drop off, the bill could be stopped.

After eight hours of debate, senators voted 35 to 11 to advance the bill transferring cash and interest to help pay for property tax cuts. But as debate continued, senators were still considering whether they wanted to do something more, or wait until the regular session in January to try again.