By Senator Tom Brewer
Despite the outcome, I admire Governor Pillen’s persistence and determination to call a Special Session of the Legislature over Nebraska’s high property taxes. They are depopulating my part of the state. He had the courage to leave no effort unexpended, to play like a Husker, and leave it all on the field. I’m proud of him.
The next Legislature must find a course of action that continues the long task of bending the arrow on the Nebraska property tax chart – down. We finally have a governor who is anxious to help play a decisive part of the property tax solution. People need to understand how deep the fiscal hole actually is. The solution that will attract the needed votes will take eight or ten years to fully implement.
A long 90-day session, like the one that will start in January, is required. Votes on different bills need to be traded between the senators so coalitions can form. The bill that will substantially lower property taxes in Nebraska will be vigorously filibustered and require 33 votes.
Any bill that reduces the property tax authority of ANY local unit of government (schools, counties, incorporated cities, NRDs, etc.) will be filibustered. These government entities all have very effective lobbyists. “Local control” is a very strong aspect of how we do government in Nebraska. You can count on the local units of government fighting tooth and nail to preserve their taxing authority.
Before any Senator introduces a bill about “rebalancing” where the state gets tax revenue from, I think the body should discuss Nebraska values first. Why does the state of Nebraska, and in some cases local units of government, tax things that Nebraskans need to live every-day life? For example, why does the state of Nebraska tax electricity?
Nebraska is the only state in the union with 100% publicly owned electrical utilities. This means all electricity in Nebraska is generated and delivered by “the government.” Chapter 70 in the state law calls public power a “subdivision” of state government. Why are Government entities taxing each other? Why are we taxing poor people on things they need to just exist?
Our slavish devotion to the income, sales, and property tax systems terribly limits our potential courses of action. If preserving these systems is so important, then the only way forward is to play whack-a-mole with the tax law. If you would like one tax to go down, one of the other two must rise.
I urge the next legislature to end the Nebraska income tax. The bill should build an 8–10-year off-ramp that ultimately sun-sets the Nebraska income tax. Every single state with growing populations and growing economies all have something in common – they do not have an income tax (like two of Nebraska’s neighboring states).
I think the best way forward for Nebraska is to eliminate the income tax, and collect 90% of the revenue the state needs to operate from a sales tax collected at the retail point of sale. The only things that should be exempt from taxation are things that people need to live ordinary, everyday life. Under this model, the property tax authority for local units of government would be substantially reduced because the State will be obliged by law to provide a baseline of funding. Bonding authority for schools, counties and towns should be preserved.
If we have the political will, Nebraska can show the rest of the nation what right looks like next January.
Please contact my office with any comments, questions, or concerns. Email me at tbrewer@leg.ne.gov, mail a letter to Sen. Tom Brewer, Room #1423, P.O. Box 94604, Lincoln, NE 68509, or call us at (402) 471-2628.