Pillen's push for lower property taxes met with skepticism

Gov. Jim Pillen is continuing efforts to build public support for lowering property taxes by expanding sales taxes. But the idea was met with some skepticism Friday in Grand Island.

Pillen wants to cut property taxes by about $2 billion dollars, or 40%. Half would come from “frontloading” an existing credit, rather than having people pay, then later get a credit on their income tax, and from an already-scheduled state takeover of community college costs. The other half would come from expanding the sales tax. Pillen suggested possible examples.

“Lawyer services, veterinary services, manufacturing, advertising, but also inputs for manufacturers, we tax that at 2%," he said. "Farming, I understand that, we tax inputs to put a corn crop in at 2%... broad base, tax decrease."

The governor said that could lower existing state sales taxes from 5.5% to 5%. But Jamie Karl, president of the Grand Island Chamber of Commerce, said taxing inputs would hurt Nebraska manufacturers. And Grand Island Sen. Ray Aguilar said the changes would be a tough sell, politically.

“I want to be supportive of the governor," he said. "But at the same time, too many people in this area right now are thinking ‘Wait a minute. You're going to increase taxes and try to get reelected at the same time? Good luck!'"

Aguilar, a Republican like Pillen, faces a tough race against Democratic former Sen. Dan Quick for the officially nonpartisan Legislature in November. Pillen wants the Legislature to meet before then to approve his yet-to-be finalized plan.