Pillen promotes property tax plan ahead of expected special session

Gov. Jim Pillen proposed a plan on Thursday he said would lower property taxes by an average of 50%.

Pillen’s plan calls for the state to take over school funding, removing the need for schools to levy property taxes to operate. The change would be paid for, in part, by ending sales tax exemptions. Sen. Lou Ann Linehan supports the idea.

“The plan removes over 110 current exemptions,” Linehan said. "This may increase the final price for consumers, but they have choices on what they buy and how much they pay for what they buy, and ultimately, therefore, what tax they pay."

Sen. Machaela Cavanaugh, in the midst of a big sewer repair project at her home, disputed that.

“To say that sales tax are a choice, my own home this week is an example,” Cavanaugh said. "If I had the same sewer problem after the special session, I would be paying double in sales tax what I'm getting in tax relief, and it is not an option."

Pillen says ending sales tax exemptions would raise enough money for the state to be able to pay operating expenses for schools. Schools currently pay for some of those operating expenses by levying property taxes.

Pillen did not offer a definitive list of what sales tax exemptions would be eliminated.

“We're saying ‘Let's take a look at every exemption,'" he said. "And then that's going to be the work of the Legislature to decide what will come into play. Everything's in play."

Cavanaugh faulted Pillen’s lack of specificity.

“He has not presented the Legislature with a plan, and he stated today that it is up to us to make a plan, and I'm not sure how he thinks the sausage gets made, but this is not it," she said.

Pillen described Nebraska’s property tax situation as a crisis that’s causing people to lose their homes and farms.

Ideas discussed to finance a shift include applying the sales tax to everything from home and vehicle repairs to pop and candy. These ideas, and others, will be discussed when the Legislature holds a special session on property taxes that’s expected to start next Thursday.

To see how much property taxes would be reduced on individual parcels, according to the Department of Revenue, click here.