Raising other taxes to lower property taxes falls short

By Fred Knapp , Senior Reporter/Producer Nebraska Public Media

May 19, 2025, 8 p.m. ·

Sen. Tom Brandt, left, talks to Sen. George Dungan, right, in the Legislature Monday (Photo by Fred Knapp, Nebraska Public Media News) — Sen. Tom Brandt, left, talks to Sen. George Dungan, right, in the Legislature Monday. (Photo by Fred Knapp, Nebraska Public Media News)

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A proposal to increase or expand other taxes to provide more property tax relief fell short Monday in the Legislature. The measure needed a two-thirds majority, or 33 votes, to overcome a filibuster by opponents. It received only 30.

Leading off Monday’s debate, Sen. Tom Brandt said his goal was simple.

“Today I'm going to present a package of legislation that is focused on one goal: delivering substantial, sustainable property tax relief for the people of Nebraska,” he said.

Brandt proposed to do that by raising taxes on cigarettes, vaping products and online cigar purchases, taxing purchases of pop and energy drinks, and taxing 18 services, ranging from tattooing to chartered airplane flights.

Taxing those services drew opposition right off the bat from Sen. George Dungan.

“It results in a larger impact on everyday working people," he said. "So whether we're talking about dry cleaning services or golf lessons or dance lessons that you may get, or massage therapy for those who feel like they need it, any and all of these are small businesses here in Nebraska that are going to be negatively impacted by LB170."

But Sen. Mike Jacobson dismissed that argument, citing some other services that would be taxed.

“So we're talking about ‘everyday Nebraskans’ who are evidently chartering private jets, who are evidently hiring limousine services, paying lobbying fees. That doesn't sound like the everyday Nebraskans to me,” he said.

Sen. Brad von Gillern, chair of the Revenue Committee, offered only lukewarm support. Von Gillern said he was concerned because the proceeds from the taxes would go to a special fund to offset school property taxes, not into the general fund.

“Senator Brandt in his opening stated that this bill was sustainable property tax relief, and I respectfully push back on that statement. This is putting dollars into the top of a bucket that has a hole in the bottom of it,” he said.

Until last year, state payments to hold down local property tax increases merely decreased the size of the increase. Last year, with the state pumping more money into the system, many peoples’ property taxes went down slightly.

But with valuations continuing to increase, the state would need to keep spending more and more to prevent property taxes from resuming their rise.

Jacobson said the public would support the proposal to tax more services.

“Let me tell you how we're impacting everyday Nebraskans with this bill: we're lowering their property taxes," he said. "Oh, that's right, the one issue that every one of us heard that knocked on doors when we ran for office was ‘My property taxes are too high.’ They didn't say ‘I can't afford to rent a private jet.’ They didn't say, ‘I can't afford to hire a limousine service if you put sales tax on it.’ They said, ‘Lower my property taxes. Don't make me sell my home. Don't kick me out of my home.'"

Sen. John Cavanaugh complained that giving everybody property tax relief was not targeted to people who need help the most, which he described as the ‘little old lady’ problem.

“The way we have chosen to direct property tax relief in the state is to throw in that ‘little old lady’ with massive land owners, who pay a huge amount of property taxes, but also are not being priced out of their homes,” he said.

But Sen. Jana Hughes fought back against the argument that the property tax relief would disproportionately benefit farmers.

“This is property tax relief for rich farmers, etc., etc. Well, 24% goes to AG ground, majority, 53% to residential property," she said.

The rest of the relief would go to owners of commercial and industrial property.

Brandt made it clear he was willing to change his proposal to get something passed.

“I'm just asking everybody to have an open mind. If you do not like something in the bill, please come talk to us,” he said.

Brandt later narrowed his bill to include only increased taxes on nicotine products. But his proposal still died when he fell short of the 33 votes needed to invoke cloture.

Click here to see how senators voted on cloture.