Committee Sends New Property Tax Relief/Business Tax Incentive Bill To Floor

LINCOLN, Neb (AP) – Nebraska lawmakers could vote as early as today on a major property tax and business incentive package, but time is running out as this year’s session has just 5 days remaining.

The Legislature’s Revenue Committee, whose previous attempts to lower property taxes had stalled, voted Tuesday in favor of a new proposal designed to benefit Nebraska property owners and attract businesses.

The new proposal seeks to combine the priorities of lawmakers who want to lower property taxes and those who want to continue offering tax incentives to businesses to replace the existing program that expires at the end of this year.

Property tax relief in the stalled version was $520 million dollars over 3 years, but after the coronavirus pandemic slowdown the new version starts at $125 million and builds up to $375 million a year over as many as 5 years. Property taxes in Nebraska grew by $198-million last year.

Gone from the bill are any changes to the state school aid formula and any new limits on school taxes or spending – proposals that had sparked strong opposition from schools. Instead, the plan calls for a new addition to the existing property tax credit fund, now at $275-million.

The new money would be tied to a percentage of how much property tax an individual pays for schools and would total about 3% of property taxes on top of the roughly 6% savings they get with the existing program pushed hard by Governor Ricketts.

The new bill also creates a new business incentive tax program for companies that create higher-paying jobs with total incentives capped at $25-million per year for the first 2 years. By year 5, it would reach $150-million – which had been the first-year target in the old bill.

Revenue Committee member Sen. Curt Friesen thinks the new bill is far from perfect with a lot of work remaining to rein in property taxes, including find a formula to fund schools different, but he thinks it’s enough of a compromise to be passed.

Friesen, an opponent of corporate tax incentives, says this is probably a time for the type of compromise where “we hold our nose and we get some property tax relief for everybody.”