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Property tax reduction alternatives emerge in Nebraska Legislature

Property tax reduction alternatives emerge in Nebraska Legislature


With the clock ticking on a legislative session in its stretch run, supporters of property tax relief prepared Tuesday for what they hope will be a final opportunity to shape a tax reform package this year. 

If Speaker Jim Scheer of Norfolk returns the Revenue Committee's comprehensive proposal (LB289) to the agenda for debate, as widely anticipated, it will be shadowed by a couple of alternative pathways forward.

The Revenue Committee plan, hammered together over the past several months, received three hours of floor debate last week.

Proposed changes in that proposal are being designed to address some concerns raised by big-city public schools and objections expressed by urban senators about the impact that a proposed one-half cent increase in the state sales tax rate would have on low-income Nebraskans.

Meanwhile, several members of the committee stand ready with backup plans of their own if the committee's product is unable to command the 33 votes that ultimately would be required to overcome a filibuster.

Sens. John McCollister of Omaha and Curt Friesen of Henderson have authored a backup proposal that would rewrite the bill, decrease the proposed half-cent increase in the sales tax rate to a quarter-cent and add an income tax component that impacts high-income taxpayers.

Their multi-faceted alternative would raise the state cigarette tax by $1 a pack instead of the 36 cents contained in the committee plan.

The alternative proposal also contains changes in school funding provisions designed to meet concerns expressed by metro school districts and would funnel $25 million in new revenue into the state's depleted cash reserve fund while earmarking $200,000 for a school finance study by the Nebraska Department of Education.  

"But I'm still supporting LB289," Friesen said. "This is Plan B; I'm always going to have a Plan B."

Sen. Tom Briese of Albion, another committee member, said he also has "a backup" in mind but is not ready to talk about it yet. 

Revenue Committee Chairwoman Lou Ann Linehan said the committee proposal, largely crafted by Sen. Mike Groene of North Platte in consultation with her and revised by the committee, would bring more equity to school funding, as it dedicates increased state revenue to property tax reductions delivered through state aid to schools.

Groene is chairman of the Education Committee.

A detailed statistical look at the results of LB289 shows that 228 of 244 school districts would clearly benefit from the bill, Linehan said. 

As the Legislature reaches crunch time, the Nebraska Farm Bureau drew a contrast between legislative support for a new program that would "use taxpayer dollars to provide business incentives and corporate tax breaks" and the need to "deliver property tax relief for hardworking Nebraska families."

"Nebraskans aren't asking for corporate incentives," Farm Bureau President Steve Nelson said. "They're asking for the Legislature to fix the way we fund schools and to lower their property tax bills."

The proposed new business tax incentive proposal (LB720) is scheduled for debate on Wednesday. 

The Nebraska Chamber of Commerce, the Lincoln Chamber of Commerce and the Greater Omaha Chamber of Commerce issued a joint statement urging support for the new incentives structure.

"We must keep our 'open-for-business' sign illuminated," Sen. Mark Kolterman of Seward, sponsor of the Imagine Nebraska Act, said.   

Reach the writer at 402-473-7248 or

On Twitter @LJSDon.


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