The two members of the Legislature's Revenue Committee who are farmers said Thursday that the tentative tax reform package now under consideration within the committee does not provide enough property tax relief for agriculture and rural Nebraska.
Both Sens. Curt Friesen of Henderson and Tom Briese of Albion are sponsors of property tax bills supported by agriculture, which has been the driving force in a long battle for increased property tax relief.
The plan to "reposition (most of) the state property tax credit fund to school aid (is) a non-starter," Briese said. "That could leave many rural school districts in the dust (and) leave a lot of taxpayers with little or no property tax relief. I'm going to make that argument in the committee and argue to keep the property tax credit fund intact."
The state now provides $224 million in annual property tax credits to taxpayers and Gov. Pete Ricketts has proposed to increase that credit by $51 million during each year of the 2019-21 biennium.
Briese said he will contend that a 1-cent increase in the state sales tax rate rather than the one-half cent hike included in the tentative committee proposal is needed to adequately fund property tax relief while accommodating proposed changes in the school aid formula.
"It really is decision time whether there will be meaningful and substantial tax reform for all Nebraskans," Briese said.
"My optimism has waned a little bit," he said, but he believes that Revenue Committee Chairwoman Lou Ann Linehan of Elkhorn is open to adjustments in the tentative plan discussed by the committee during a Wednesday night executive session.
"It's not going to be easy," he said.
Friesen agreed with that assessment: "We're not done yet; we can still find a path."
The current proposal provides $2 in tax relief for commercial and residential property for every dollar in tax relief for agriculture, he said, even though agriculture has "borne the brunt" of high property taxes.
The committee plan needs to be adjusted to be "fair and equitable," Friesen said.
"I'm willing to work on ideas," he said.
Four rural senators and four urban senators from metropolitan Omaha sit on the committee.
The committee has taken no votes on elements contained in its tentative package, although cracks may be opening in terms of attempting to reach an agreement that can run the gantlet of floor debate and ultimately command the 33 votes that would be required to break a filibuster and the ensuing 30 votes needed to override a certain gubernatorial veto.
Friesen has sponsored a property tax relief measure (LB497) supported by the 61,000-member Nebraska Farm Bureau and a collection of agricultural organizations.
Briese introduced a property tax reform proposal (LB314) that has the support of a variety of agricultural and education interests.
The tentative tax reform package being considered by the committee will be subjected to an extraordinary public hearing next Thursday before the Revenue Committee, the Education Committee and the Retirement Committee.
Following that hearing, Linehan's committee will consider changes in the plan. No votes have been taken in the committee on any elements of the proposed package so far.
Linehan said she is "open to change" and acknowledged that committee members are engaged in conversations between individuals and sometimes in small groups as they attempt to move toward some consensus.
"There is general agreement that we retain the property tax credit fund," Linehan said. "The question is how much do we leave in it."
On a related topic, Linehan said "I am not giving up" on a proposed constitutional amendment to establish a 3 percent annual cap on increases in property taxes.
A proposal (LR8CA) sponsored by Linehan at the request of the governor is stuck in the Revenue Committee without majority support to send it to the floor of the Legislature for consideration.
Meanwhile, waiting in the wings is a petition drive to place a proposed constitutional amendment on the 2020 ballot that would provide a state income tax credit for 35 percent of local property taxes paid if the Legislature does not act on its own.