Legislature advances vastly scaled-back property tax bill
By Fred Knapp , Senior Reporter/Producer Nebraska Public Media
Aug. 13, 2024, 8 p.m. ·

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The Nebraska Legislature gave first-round approval Tuesday to a vastly scaled-back proposal to relieve property taxes.
It was the first day of debate on the latest version of property tax legislation, and Sen. Brad von Gillern had words of praise for the person responsible for calling senators into special session – Gov. Jim Pillen.
“God bless him," von Gillern said. "He threw everything on the table for us to pick and choose from, and he's taken darts and spears for that, and I appreciate his leadership in that. He did that and then surrendered it to the legislative body to do what it is that we're supposed to do here, and that is, assemble a bill that's good for the people of Nebraska."
Sen. Carol Blood wasn’t so complimentary toward Pillen, who defeated her for governor two years ago.
“Everybody says ‘It's great. He gave us this huge plate of things we could choose from, and we got to whittle it down.’ Well, you can also look at it that he threw mud at the wall and whatever sticks stuck, and that's what we're stuck with,” Blood said.
When Tuesday’s debate began, senators were considering a proposal to apply sales tax to about 70 currently exempt goods and services, ranging from pop and candy to pet grooming and lawn care. The idea was to use the money to have the state pay more of the cost of running schools, which are currently supported by local property taxes.
Sen. Wendy DeBoer opposed the bill, criticizing its list of items to be taxed.
“This is the love tax, because it taxes dating (services). The puppy tax -- nail clips and grooming," she said. "The weight loss program tax, the everything you bought on Amazon last year tax, the sober rides home from the bar tax, the dry cleaning and other laundry services (tax), whatever that means."
Sen. Tom Brandt, supporting the proposal, said the trade-offs it contained were worth it.
“Being asked to pay a nickel more for a can of pop to help fund our schools, while helping people stay in their houses, seems more than reasonable,” Brandt said.
More from the Legislature's special session:
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?
Legislature considers budget cuts in special session
Scaled-down version of property tax cuts proposed
Marijuana, municipal aid proposed for property tax relief
Education Committee considers school funding changes
Sen. Terrell McKinney said lowering taxes on property wouldn’t help people who rent where they live.
“Landlords are still going to raise rents," McKinney said. "Renters are not going to see any relief. And when I think about my district, 60% of my district rents."
But Sen. Rick Holdcroft said renters, too, would be affected if the Legislature does not act.
“If we do nothing, property taxes will increase significantly,” Holdcroft said. "If we do nothing, and if you're a renter, your renter, your rent is going to go up significantly."
Other senators, including Sen. Rob Dover, objected to trying to make such big changes in a short special session.
“Why are we doing this special session? We are going to make the largest tax policy shift in over a half a century, and we're going to do this in a matter of days," Dover said. "That concerns me."
After a morning full of back and forth, Sen. Lou Ann Linehan, the chair of the Revenue Committee who’s been leading the charge for Pillen’s property tax reductions, acknowledged she did not have the votes needed to overcome opposition to the proposal.
Instead, Linehan introduced an amendment that would simply expand and restructure an existing property tax credit.
Currently, people have to pay their property tax, then they’re entitled to part of their money back in the form of a credit when they file their income taxes. But according to Linehan, about 45% of filers, mostly lower-income folks who don’t use professional tax preparers, don’t use the credit.
The amendment would reduce their tax bills, but would do nothing to cut property taxes for people who are already using the credit.
Sen. Mike Moser supported the amendment, while calling the development disappointing and anticlimactic.
“This amendment does improve the property tax situation a little bit," Moser said. "It's not the magic bullet that some of us had hoped for, but at this point, I think it's the best we're going to get."
Sen. George Dungan opposed the amendment, faulting the process he said had produced confusion and uncertainty about its effects. He compared it to a complicated legal case.
“I have a friend who's a lawyer, and he's a trial lawyer, and one time he had a really complicated jury trial, and he got up for his closing arguments, and instead of having some quip or thing that he could say to them about the actual theory of the case, he stared at the jury for… a few seconds, and he just looked at them and said, ‘This is a mess. This is a mess.’ And that's kind of how I feel right now," Dungan said. "This entire process has felt just like a mess."
Anticlimactic mess or not, senators voted 34-11 to cut off debate, then 36-8 to advance the tax bill. Sen. Rob Clements, chair of the Appropriations Committee, estimated it would add about $185 million to the cost of the credit program. He said about $140 million of that could come from budget cuts his committee has proposed, and the rest from the state’s reserves. Clements said those budget cuts will be debated Wednesday. For his part, Pillen issued a statement calling the bill that was advanced a step in the right direction, while saying there is much work yet to be done.
Following the vote, Pillen issued a statement thanking the senators who voted to advance the property tax legislation.
“I am grateful to Sen. Lou Ann Linehan for her strong leadership in achieving this first step toward property tax relief,” he said. “Although there is much work yet to do to achieve a victory for Nebraskans facing spiraling property tax bills, this vote is a step in the right direction. I look forward to partnering with good faith members of the Legislature to continue the work of delivering transformative property tax reform and bringing this consensus bill into law.”