Proposal Could Cut School Property Taxes by 15 Percent
By Fred Knapp , Reporter/Producer Nebraska Public Media
Jan. 14, 2020, 5:26 p.m. ·
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Nebraskans’ school property taxes could drop by 15 percent over the next three years, under a bill introduced by the Revenue Committee and agreed to -- in principle -- by Gov. Pete Ricketts. And bills were introduced on subjects ranging from advertising by state officials to taxing escort services.
The property tax proposal relies on using state revenues, largely from income and sales taxes, to offset some of the local property taxes used to support schools. Sen. Lou Ann Linehan, chair of the Revenue Committee, explained the idea.
“The goal is to reduce property taxes and keep the schools whole. Meaning nobody’s going to lose any revenue. That’s our goal,” Linehan said.
And Linehan offered an estimate of how big a cut there would be after three years.
“We feel that the average drop in school property taxes would be somewhere between 13 and 15 percent,” she said.
Linehan said school property taxes make up between 60 and 65 percent of overall property tax bills. Based on that, the overall reduction in property taxes could be between 8 and 10 percent.
Asked if Gov. Pete Ricketts supports the plan, Ricketts’ spokesman Taylor Gage said “The Governor and Sen. Linehan have agreed on a high level framework, and are working on details.”
The proposal is expected to cost the state about half a billion dollars in additional school aid over the next three years. That increased spending is possible because state tax collections have been coming in above projections recently. But over the last 38 years, revenues have come in below projections 17 times.
Linehan was asked what would happen when that occurs again.
“Though we do go up and down (in) projections, revenues over time on average go up 4.5 percent per year. So it is, I think, the consensus that we can do this,” she said.
The bill is cosponsored by six of the eight members of the Revenue Committee.
One committee member who has not signed on, Sen. John McCollister of Omaha, explained his hesitance in an interview.
“The bill has some provisions that the large school systems aren’t going to much appreciate,” McCollister said. He pointed to a provision that says if the state fails to deliver the aid promised to schools any year, school boards can raise property taxes to above the legal limit. But they could do that only to make up 75 percent of the aid they’re missing out on.
Omaha, Lincoln and Millard schools are among the largest recipients of state aid. Another Omaha senator on the Revenue Committee, Brett Lindstrom, said he thinks the proposal will be popular in that city.
“I can tell you that going door to door, eight out of 10 houses the number one concern was property tax relief. So I don’t imagine I’ll get too much pushback from my constituents,” Lindstrom said.
A public hearing on the bill will be held next Wednesday.
Also Tuesday, Sen. Matt Hansen introduced a bill to prohibit state officials from using state funds for any television, radio or print advertising that mentions them by name. The legislation would apply to the governor, lieutenant governor, secretary of state, state treasurer, attorney general, or auditor of public accounts.
Such a ban is already in effect, but it applies only in years when those offices are up for election. “If a state constitutional officer is able to present themselves in a way that comes off as self-promoting, it’s not necessarily the best uses of the office. So it’s time to take a look at that and see if that policy that makes sense in election years makes sense for all years,” Hansen said.
Hansen says he was inspired to introduce the legislation by television ads run last year featuring State Treasurer John Murante on subjects like the college savings program run by that office.
Murante’s office said he was travelling in western Nebraska and wasn’t immediately available to comment.
And Sen. Patty Pansing Brooks introduced legislation to tax dating and escort services. Pansing Brooks said escort services are often used as cover for human trafficking operations, and taxing them makes sense.
“I feel like this is a no-brainer – that there is no reason that we should be allowing them not to pay taxes. In a way, I looked at it as one more arrow in the quiver of the attorney general, because as you remember, Al Capone was caught for tax evasion,” Pansing Brooks said.
Pansing Brooks said the tax could apply to online dating services, and it would be up to them to come in and talk about ways to distinguish legitimate from illegitimate services.
Also Tuesday, lawmakers voted 46-2 to appoint child welfare Inspector General Julie Rogers as the next state ombudsman. The ombudsman investigates and intervenes for state residents and legislators who have questions or complaints about state agencies.
Sen. Ernie Chambers objected to the appointment, saying acting ombudsman Carl Eskridge had a greater range of experience, and suggesting Gov. Pete Ricketts opposed his appointment because the office has been critical of the Department of Correctional Services.
Ricketts’ spokesman Gage denied that, “The Governor doesn’t get involved in how the Legislature organizes itself, including the selection of the new ombudsman.”
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