Ricketts, Krist differ in approach to property tax issue

Nebraska Republican Governor Pete Ricketts and his Democratic challenger, state Senator Bob Krist, agree property taxes are a top issue. But they have different approaches to the issue.

“Property tax is absolutely the number one issue that people have talked to me about as I’ve been running for governor five years ago, and up until today,” Gov. Pete Ricketts said in a debate in Grand Island last month.

“That’s what this election is about. Property tax relief,” Sen. Bob Krist said.

The subject was the first one the candidates were asked about. Debate moderator Craig Nigrelli challenged Ricketts.

“You have repeatedly said that property tax reform is a top priority. Yet it has not happened. Why should the voters trust that you would get it done in the next four years?” he asked.

Ricketts disputed the idea he hasn’t achieved anything on property taxes.

“Craig, I’m going to disagree with you a little bit… because I think we have. We’ve increased the property tax credit relief fund in my first year by over 40 percent.”

Through that fund, taxes the state collects -- mostly on income and sales -- are sent to local governments and schools to pay part of the property taxes Nebraskans owe.

This year, that means the owner of a $150,000 house will pay about $130 less in taxes property taxes than if the credit didn’t exist.

Under Ricketts, the credit has increased, from $140 million the year before he took office to $224 million last year.

But property taxes went up more than twice as much. Last year, they were $490 million higher than the year before Ricketts took office.

Ricketts says legislation Krist supported would have made property taxes go up even more.

“The only bill he ever introduced on property tax relief would have raised your property taxes about $263 bucks for an average Nebraska household,” Ricketts said.

That bill would have done away with the property tax credit for two years. Krist told Ricketts the point of his bill was clear.

“It was trying to get everyone’s attention to the fact that you’re pulling money out of the rainy day fund and giving money back,” Krist said.

That “rainy day fund’’ -- the state’s cash reserve, to help get it through economic downturns -- has declined from more than $700 million to less than $300 million in four years.

Ricketts defended his budgeting.

“What that represents is that commitment to the property tax credit relief fund, and delivering of property tax (relief) over $840 million, and that was a priority in my budget,” he said.

Debate moderator Mike’l Severe questioned Krist about his plan to deal with property taxes.

“Would you support a plan that directed more state income and sales tax towards reducing the property taxes that Nebraskans pay?” Severe asked.

“Absolutely,” Krist answered.

In the last legislative session, Krist said he agreed with most parts of a bill to raise income, sales and cigarette taxes to funnel more money to schools.

Krist argues directing more state revenue to schools would help with property taxes.

“Not so long ago, we gave 20 percent of our income tax to fund education. This past budget cycle, it was less than 3. That burden, not funding education, causes a further burden on the taxpayers – the property taxpayers,” he said. “We need to find a way to balance that three-legged stool of taxes, and reduce the burden on property tax every way that we can.”

Ricketts says he’s against raising taxes to lower taxes. He says ideas he’s proposed, like providing an income tax credit for property taxes paid, and changing how agricultural land is valued, would help. And Ricketts says the key to property tax relief is spending control at the state and local level.

Which of those approaches to the property tax issue Nebraskans prefer will be part of the decision voters will make in this year’s election.