The Legislature's Revenue Committee on Tuesday introduced a new plan to reduce local property taxes by increasing state aid to schools and placed the proposal on the fast track for legislative consideration.
Six senators agreed to committee sponsorship of the bill (LB974), with Sen. John McCollister of Omaha and Sen. Sue Crawford of Bellevue deciding not to add their votes.
The committee's bill will receive a public hearing next week and appears headed toward early debate on the floor of the Legislature based on Speaker Jim Scheer's expressed desire to act on major tax reform proposals early in the legislative session rather than wait until its closing days.
Sen. Lou Ann Linehan of Elkhorn, chairwoman of the committee, detailed the plan at an afternoon news conference in the Capitol Rotunda with Sens. Mark Kolterman of Seward, Brett Lindstrom of Omaha, Tom Briese of Albion, Curt Friesen of Henderson and Mike Groene of North Platte lined up behind her at the podium.
"We are increasing state aid to reduce reliance on property taxes," Linehan said.
The bill would not raise income or sales taxes, she said, or eliminate any sales tax exemptions. And, Linehan added, the current property tax credit relief fund would remain intact.
Linehan anticipates a 13% to 15% average reduction in property taxes as the proposal takes effect.
Property valuations on agricultural land and residential and commercial property would be reduced over a three-year period, she said.
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That would slice property taxes for farmers and ranchers, as well as homeowners, she said.
The bill would extend state aid to all schools, rather than the minority of school districts that now receive state assistance under the current school-aid formula.
"Not a single student would not get (state) funding," Linehan said.
Unanticipated state revenue would help fund the proposal.
An early analysis of the impact of the plan has suggested that it may place budget and spending resource pressures on big-city school districts such as Lincoln, Omaha and Millard.
Hanging over the Legislature as it debates the familiar topic of property tax relief is a statewide petition drive seeking a vote of the people in November on a constitutional amendment that would provide a 35% state income tax refund or credit for local property taxes paid.
Voter approval of that proposal would slash a $1.5 billion hole in the state budget, threatening funding for state programs and services.
Linehan said the committee bill is the beginning of a legislative effort to provide substantial and meaningful property tax reduction for Nebraskans.
"It's like gardening," she said, "not one and done. But I think it's a very, very good start."
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