Senators continue thrashing around on taxes

The Nebraska Legislature spent another day thrashing around on taxes Thursday, before deciding to take three more days before trying again.

Thursday was originally supposed to be the day the full Legislature started debating the main bill in this session aimed at cutting property taxes. But before that happens, the Revenue Committee has to decide what it wants to add to Gov. Jim Pillen’s proposal, and what parts it wants to take out.

A committee meeting to vote on that was originally supposed to happen Wednesday. Then, it was postponed to Thursday. Then, it was postponed from Thursday at 9 to Thursday at 1. Thursday afternoon, Speaker John Arch said Revenue Committee Chair Sen. Lou Ann Linehan had asked him to adjourn until Monday afternoon, to give more time to work on the bill.

Outstanding questions include the timing of a proposed state takeover of costs for county jails and natural resources districts, and whether schools that spend above the average for their peer group might actually see a decrease in state aid.

The delays were the latest sign of the complexity of what senators are attempting to accomplish – major changes to property taxes, sales taxes, and school funding – and the difficulty of doing that in this special session called by Pillen. A power point presentation of the latest version of the Pillen/Revenue plan can be found here.

In a written statement Thursday, Pillen thanked the majority of senators for their work, while criticizing an unnamed minority for what he called personal attacks, political grievances, and time-wasting tactics.

Sen. Danielle Conrad, a registered Democrat in the officially nonpartisan Legislature and a leading critic of the Republican governor’s plan, faulted Pillen for the lack of action.

“Everyone, including legislative leadership, acknowledges that the governor's plan is indeed, as predicted, dead on arrival, not because of partisanship, not because of personal animus, but because it remains poor policy,” Conrad said.

More from the Legislature's special session:

Special session debate: Should there even be a special session?

Legislature considers budget cuts in special session

Scaled-down version of property tax cuts proposed

Marijuana, municipal aid proposed for property tax relief

Education Committee considers school funding changes

Online sports betting touted as way to reduce property taxes

But Sen. Justin Wayne, also a Democrat, said now that senators had been called into special session, they should try to come up with a solution.

“We're down here. Let's try to find a solution. We're all not going to get what we want. We're all going to have to just turn our head and say, I think I can live with that. But we’re here. Whether we like it or not, we’re here. So let’s have real conversations. Let’s see what we can live with, and what we can’t,” Wayne said.

Pillen and the Revenue Committee have been working on a plan that involves expanding the sales tax to currently untaxed goods and services, then using that money to replace school funding that’s currently supplied by property taxes.

Sen. Julie Slama, a Republican, said having schools dependent on more state funding would hurt rural areas.

“Guess who's going to be holding the bag when we have a shortfall in revenues, when we have a shortfall in funding?. It's going to be our rural schools. This week and next, we're going to be having a very uncomfortable conversation about what the largest wave of school consolidations will look like if this proposal passes. If you're in a rural county with two schools in it, and you're voting for LB9, the way it's been proposed, you're voting for one of those schools to shut down,” Slama said.

Other senators promoted their preferred alternatives. Sen. Jen Day, a Democrat, pointed to other sources of revenue to offset property taxes. “An expansion of gambling and the legalization of marijuana use in Nebraska are two sources of revenue that would easily pay for property tax cuts,” Day said.

Sen. Steve Erdman, a Republican, touted his EPIC consumption tax proposal as an alternative to other plans he said did not have enough support to overcome a filibuster.

“So I'll tell you right now, nothing I've seen being presented has got 33 votes. This could be the option that wins the day,” Erdman said.

Sen. Mike Jacobson, a Republican, said if senators do nothing, property taxes will continue to increase.

“We can sit here, as we have in the past, and talk about property tax relief. I'm tired of talking about tax property tax relief. We have an opportunity right now to make a difference. If we fail to seize the moment, shame on us. Our constituents expect us to pass a real property tax relief bill,” Jacobson said.

After about an hour of debate, senators voted 33-11 to adjourn until Monday at 1 p.m. Central. Then, it may become clearer if there’s enough support to pass a plan next week, which was originally seen as the end of the special session.