Senators reject attempt to end special session on second day

The Nebraska Legislature decisively rejected a move to end its special session on property taxes and go home early Friday, amid continuing disagreement about how to address the property tax issue.

On only the second day of the special session, Sen. Justin Wayne moved to adjourn “sine die” – without a day to resume. This move has been widely anticipated by senators who dislike Gov. Jim Pillen’s proposal to cut property taxes by expanding sales taxes.

Wayne has objected to Pillen’s waiting until the day before the session to issue a formal proclamation calling it and detailing the subjects to be considered. But Speaker of the Legislature John Arch urged his colleagues to reject the adjournment motion. Arch said senators have a duty to deal with the property tax issue.

“Citizens are watching. I don't know about you, but I know in my district, there is a lot of interest with what's happening here in this session," Arch said. "Citizens are watching, and well they should. Now we have the hard work to do. Only we can address this issue that's forcing people out of their homes, preventing others from buying a first home, forcing increases in rent and all the other negative impact on everyone in the state."

Arch argued against waiting until next year’s regular session to address the issue, citing anticipated turnover produced by term limits and incumbents deciding not to run in November.

“To those who would say, ‘Well, we ought to just delay this to January,’ I guess I would say that it's not going to get easier in January," he said. "Actually, I think it's going to get harder in January, because we're going to have at least 15 new senators in this room. So all of the experience and all of the content knowledge that that the senators that are terming out would leave, is going to leave us needing to educate and bring up to speed 15 new senators on this issue."

Wayne did not speak in favor of his motion, which lost on a vote of 34-4. But in a brief interview afterward, he indicated he expects other similar motions will be offered, and predicted the session will not last more than two weeks.

In yet another indication of the uncertainties surrounding the session, the Reference Committee voted 5-4 to send Pillen's main tax proposal, LB1, to the Government, Military and Veterans Affairs Committee instead of the Revenue Committee for a public hearing and to shape the bill. Sen. Julie Slama, who opposed the governor’s bill, supported the move.

“I think it really underlies the issue that the entire Legislature is struggling with," Slama said. "LB1 is a bill that logically could have been referenced to 10 different committees. It touches on banking, revenue, government, but at its core, it's about government authority to take certain actions."

Sen. Tom Brewer, who chairs the Government, Military and Veterans Affairs Committee, made it clear he didn’t agree.

“I mean, if you think about it, it doesn't make sense to put in the Government Committee," he said. "If you look at the components of what the bill does, it’s not a bill that's focused on rewriting rules and regulations for county, city, state government. It's totally focused on taxation, and it's a revenue issue. So we'll see."

Sen. Lou Ann Linehan, chair of the Revenue Committee who introduced LB1 for the governor, interpreted the move as an attempt to kill the bill.

“There are people that don't want to be here," Linehan said. "They don't want us to fix the property tax problem. So this is a way to kill the bill before we even get it in a hearing."

By the end of the day, Linehan and Brewer had signed a letter asking the Reference Committee to reconsider. Sen. John Lowe, who proposed moving the bill to Government in the first place, indicated he would not oppose both committee chairs. That means the bill is likely to be sent back to Revenue, as originally expected. But that move is not expected until Monday, which will push the public hearing on the bill from Monday until later in the week.

Meanwhile, senators continued to introduce other bills. Sen. John Cavanaugh proposed one that would exempt the first $100,000 of every owner-occupied dwelling from property taxes. He described how the bill would work.

“What that means is, if your house is worth $200,000, you'd still have to pay the property tax on the amount between $100,000-$200,000,” Cavanaugh said. "But the state would pay your property taxes on the first $100,000."

Cavanaugh suggested the state could pay for that by canceling the Perkins County canal, redirecting existing property tax credit funds, or delaying income tax cuts.

That and other proposals will be considered in a series of public hearings that Arch said could stretch through all of next week.

Originally, the Legislature had been scheduled to continue with an unusual Saturday meeting, but Arch changed that to give bill drafters more time to cope with all the legislation being introduced. He closed Friday’s session by announcing his decision with some tongue-in-cheek humor.

“We will not be meeting tomorrow, and I know that's a major disappointment. Everybody wants to be here Saturday. We will be coming together on Monday at nine o'clock,” he deadpanned.

Monday will be the last day to introduce bills to be considered in the special session. The Revenue Committee will consider tax proposals other than the governor’s LB1 in a public hearing beginning at 9:30 a.m. central time.

Editor’s note: You can watch the Revenue Committee hearing streaming live on our website.