The statewide petition drive to place a billion-dollar property tax relief initiative on Nebraska's general election ballot this November was suddenly abandoned Friday, prompting its leading legislative supporter to say he'd been "stabbed in the back."
Supporters of the initiative have decided a proposed constitutional amendment would be a more secure method of guaranteeing property tax relief and may refocus their efforts along that pathway, said Trent Fellers of Lincoln, executive director of Reform for Nebraska's Future.
"That might be a future vehicle," he said, "but probably not this year."
"The property tax issue is still out there until it is solved either by the Legislature or by a constitutional amendment that is placed on the ballot," Fellers said.
"We'll reload and go to something different," he said.
The stunning change of course dramatically alters the 2018 election battleground and shapes a new playing field for the 2019 legislative session.
And it drew a sharp rebuke from Sen. Steve Erdman of Bayard, who has been leading the property tax reduction effort in the Legislature.
"I feel like I've been stabbed in the back," Erdman said during a telephone interview.
"There was a lot of smoke and mirrors in the statement announcing the withdrawal," he said. "Somebody, and I'm going to find out who they are, put pressure on somebody else to end this.
"I'm still going to try to accomplish what we set out to do," Erdman said. "We'll try to pick up the pieces and move on with this."
Otherwise, he said, "we're going to get the same kind of property tax relief we've gotten for the last 40 years, and that's nothing."
Sen. Jim Smith of Papillion, chairman of the Legislature's Revenue Committee, said it "makes no sense to do this now" rather than three or four weeks ago when the Legislature still was in session and senators could have "tried to achieve a legislative solution."
"We could have tried to get something reasonable done," Smith said.
"My sense is they already had to know what they were going to do. Someone maybe owes the public some explanation."
The petition drive was widely anticipated to be successful in obtaining sufficient signatures to place the initiative on the November ballot, although there was wide disagreement on the question of whether voters would be likely to approve the dramatic change in Nebraska's tax system.
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Under terms of the proposal, state income tax credits would be used to fund property tax relief equal to 50 percent of local school property taxes paid.
That would have opened a huge hole in funding to support state government, leaving it to the Legislature and the governor to determine how to increase state revenue and/or reduce funding for state programs and services.
However, because the proposal was framed in terms of an initiated law rather than written into the state constitution, there has been growing concern among initiative sponsors that "the Legislature could take this away," Fellers said.
The Legislature is empowered to amend, modify or repeal any initiative that is enacted by the electorate with a two-thirds vote, or at least 33 of the 49 senators.
But the petition sponsors "knew all of this a year ago," Erdman suggested.
"To spend millions of dollars and have it wiped out, or overruled, by the Legislature" was a concern, Fellers said.
"We want something that sticks," he said. "We will reload."
Taylor Gage, spokesman for Gov. Pete Ricketts, said "the decision by ballot initiative organizers not to move forward will help protect Nebraskans from big tax hikes and severe damage to key state priorities like K-12 education and public safety.
"The governor will continue to work to bring together both rural and urban interests to deliver property tax relief for Nebraskans," Gage said.
Sen. Bob Krist of Omaha, who is seeking the Democratic gubernatorial nomination next month, said Ricketts has failed to provide substantial property tax relief while "insist(ing) on corporate tax cuts for himself and his wealthy friends."
Although Krist, like Ricketts, did not support the property tax initiative, he said he's committed to "find solutions that bring relief while not causing harm to our education system."
Departure of the initiative may dramatically change the playing field for the 2019 legislative session, which might have convened with a billion-dollar challenge hanging over its head.
Now, the next session will face the recurring property tax issue that has stirred growing political unrest, particularly in rural Nebraska during a period of agricultural stress.
This year's legislative session deadlocked on tax reform legislation, with a proposal sponsored by Smith and supported by Ricketts that would have combined property tax relief with corporate income tax rate reductions falling eight votes short of breaking a filibuster mounted by its opponents.
In a formal statement, Fellers stated: "We've observed the Legislature closely and are not convinced the Legislature will effectively implement our proposal to reduce property taxes, even if enacted by the people.
"The decision not to proceed with the initiative petition does not mean we are ending our efforts to reduce the property tax burden, only that we are exploring other options that would set a higher bar to ensure the will of the people is carried out, including a possible constitutional amendment that could withstand any challenge from the Legislature."