Pillen faults senators on property taxes, vows special session

Gov. Jim Pillen Thursday faulted the Legislature for failing to pass his plan to cut property taxes. And Pillen vowed to call senators back into as many special sessions as it takes to address the issue this year

Before he delivered his criticism, Gov. Jim Pillen thanked lawmakers for things they did get done this session. He mentioned reducing the surplus in state accounts, shoring up hospital finances, allowing staff to carry firearms in more rural public schools, and passing a new version of scholarships for private and religious schools, among other items.

But then, Pillen shifted tone.

“Because of this Legislature's inaction this morning, Nebraskans will not see a penny of property tax relief out of this session. It’s unacceptable from my seat,” Pillen declared.

The governor promised to call legislators back in special session instead of waiting ‘til the next regularly scheduled session in January.

“I will call as many sessions as it takes to finish the long overdue work of solving our property tax crisis,” he said.

Pillen’s speech followed Thursday morning’s failure of LB388, the latest version of his ideas for reducing property taxes.

The bill, spearheaded for Pillen by Sen. Lou Ann Linehan, would have expanded sales taxes to currently untaxed items, including advertising revenue, pop, candy, drycleaning and pet veterinary services. The money raised, along with money redirected from an existing income tax credit program, would have gone to schools to relieve their reliance on property tax.

Sen. Julie Slama, a conservative Republican in the officially nonpartisan Legislature, led off the opposition to the Republican governor’s plan in Thursday’s debate.

“We're going to take some time to discuss what is really, I see, as a large tax increase,” Slama said.

Slama was followed in opposing the bill by Sen. Danielle Conrad, a liberal Democrat.

“The intent and the purpose and the ultimate goal that Governor Pillen, and Sen. Linehan and others have brought forward is to reduce the pressure on property taxes. That goal is laudable and supported by every one of us in this chamber. We disagree however, with the ‘how,’ Conrad said.

Sen. Brad von Gillern objected to advertisements sponsored by the Nebraska Grocery Industry Association against the bill that called it one of the largest middle class tax increases in state history.

“Sponsors talked about this will be the highest tax increase and the middle class ever passed in Nebraska. Well, if all 388 did was collect taxes that would be different. but the reality is that 388 returns tax revenue and direct property tax relief,” von Gillern said.

Linehan defended expanding sales taxes to lower property taxes.

“Today we ought to make the decision that ‘Yes, I’ll pay taxes on pop and candy so grandma doesn't have to move out of the house,” Linehan said.

Sen. John Lowe said if he voted for the bill, he’d be breaking a campaign promise.

“I made a promise to the people that I would not vote for a tax increase on anybody, which a tax shift does,” Lowe said.

Sen. Joni Albrecht acknowledged the revised bill would not cut property taxes by as much as the original version, which included raising the sales tax rate.

“We were asked by the governor to reduce the property taxes by 40 percent. And as much energy as we put into this, we’ll be lucky to get to 22 percent. But it’s a move. It’s a move in the right direction,” Albrecht said.

But Sen. Steve Erdman argued the bill would merely slow down the longstanding rise in property taxes.

“This bill doesn't mean squat to anybody. Bring on a special session. Let's talk about what we can do to make this work. This is not it,” Erdman said.

Linehan gave up on the bill before it reached a vote, when it was obvious she didn’t have enough votes to overcome a filibuster. Before that, she sarcastically called on opponents of the bill to come up with their own solutions:

In: I'm willing to come back to summer this fall whenever. But I hope we have a lot of conversations between now and then about all your perfect answers to this problem. Because it's easy to say ‘No, no, no,’ that's real easy. So everybody who's saying that we can do better, I hope you have those ideas the Revenue Committee by the end of June,” she said.

Pillen didn’t say exactly when he’d call lawmakers back. But the former Cornhusker football player told senators that special interests opposed to his plan had just won the first half of the game.

“Enjoy halftime. We'll see you again here soon. God bless you all and God bless the people in the great state of Nebraska,” Pillen said, as senators skipped a beat, then ended with applause.