Attempt to add to property tax relief fails in Legislature

2013-05-09T13:25:00Z 2013-05-09T22:46:07Z Attempt to add to property tax relief fails in LegislatureBy JoANNE YOUNG / Lincoln Journal Star

A discussion on property tax relief that started Wednesday night in the Legislature ended Thursday morning with a failed vote.

Senators voted 14-15 on an amendment offered by Sen. Ken Schilz of Ogallala to add $7.5 million a year for two years to the property tax credit program, which was enacted in 2007. The total for the program without the addition is $230 million over the two years of the budget.

Schilz acknowledged the $15 million was a token amount, but said it was the discussion Nebraskans want to hear.

Property taxes need to be addressed, but it can't be done without a plan for a tax overhaul, Sen. John Harms of Scottsbluff said. 

"How are you going to cut property tax from the state level?" he asked. "It's going to end up being just a tax shift to sales tax or to something else."

He asked what senators were willing to give up to bring those taxes down: welfare, education, highway funds? 

Some senators argued that hundreds of thousands of dollars of the $15 million would go to out-of-state landowners like Ted Turner, out-of-state corporations like Walmart and large land owners in the state. For many homeowners it would mean a few dollars a year.

Appropriations Chairman Heath Mello said the property tax program will be part of a pending tax study.

"We know it needs to be revised and needs to be looked at," he said. "It's not meeting ... what we thought it was going to meet when it was passed."

The percentage of the credit going to residential property owners has gone down each year since 2007, going from 55.7 percent the first year to 46.9 percent in 2012.

Revenue Committee Chairman Galen Hadley brought the debate back to the numbers that tell the property tax story.

In 2012, local governments -- school districts, counties, cities, natural resource districts and others -- collected $3.2 billion in property taxes. Sixty percent went to schools, 17 percent to counties, 11 percent to cities.

"If our citizens do not like the property tax burden, they ought to start by talking to people they elect … the people (in local governments) that are setting these tax rates," Hadley said.

"We do not set property taxes in the Legislature. We may influence them, but we do not set them."

The property tax credit program sends money to counties, which in turn allocate it as credit to taxpayers.

Rural residents are perhaps the ones who talk most about property tax relief. Sen. Al Davis of Hyannis said they may even be obsessed with them.

"We need to find a solution to the property tax problem in this state. It just has to be done," he said.

The time for doing that is now, Schilz said. The issue must stay in front of the state.

"In my mind if you don't keep the pressure on and you don't keep the hammer down, people forget about it. People move on."

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