On Tuesday, August 20, Governor Jim Pillen hosted a news conference and bill signing with invited state senators who supported passage of legislative initiatives introduced during the special session, aimed at fixing the state’s rising property tax crisis. The session was convened by the Governor on July 25. It adjourned, sine die, mid-afternoon.
“LB 34 is an important step forward,” said Gov. Pillen. “I appreciate the efforts of Sen. Lou Ann Linehan, members of the Revenue and Appropriations committees and the other senators here today who brought substantive ideas and fought hard on behalf of Nebraskans. This is not a one-and-done issue. It’s the top concern that Nebraskans talk to me about wherever I go, and it needs to be addressed so we are no longer chasing seniors out of their homes and killing the dream of home ownership for young people.”
Lawmakers passed LB 34, a property tax reduction measure, introduced by Sen. Tom Brewer. The bill features two main components. It provides for the frontloading of refundable income tax credits to offset school property taxes. Known as the School District Property Tax Relief Credit program, it will provide a significant benefit to taxpayers who have not claimed the credit when filing their taxes.
“This is a big deal,” said Gov. Pillen. “We’re making sure that 45 percent of Nebraskans who have not been getting that credit will now receive a 20 percent property tax cut.”
The bill also limits taxing authority by cities and counties year-over-year to the greater of inflation or 0%. It includes an exemption for public safety needs, including law enforcement, fire, emergency medical services, corrections, county attorneys and public defenders.
Sen. Linehan touted the significance of that part of the plan saying, “Putting caps on spending is the only real answer to fixing this. The reason our property taxes are high is because we have too many taxing authorities spending too much money. Finally, anything that is over three percent in revenue growth can go to property tax relief.”
Gov. Pillen gave early indication of a special session during delivery of his sine die address to lawmakers at the end of the regular legislative session in April. He followed up quickly by convening a workgroup of senators who he met with throughout the summer, to generate wide-ranging ideas for addressing the state’s property tax crisis.
In early May, the Governor launched the first of more than two dozen town halls across the state, all focused on escalating property taxes. That was followed by release of The Nebraska Plan to Cut Property Taxes, a comprehensive plan designed to provide up to 40% relief which was introduced during the start of the session as LB1. In late June, Gov. Pillen sent a letter to Speaker John Arch, indicating his intent to formally call a special session, which was followed up with a proclamation one month later.
State Treasurer Tom Briese congratulated his former legislative colleagues for their work, but echoed sentiments that the pursuit for more substantive property tax relief was far from over. He pointed to LB 1, which he said would have significantly addressed the property tax issue and was almost unanimously approved by the Governor’s working group.
“Unfortunately, lobbyists and special interests got in the way. Going forward, they will need to decide if they are serious about property tax relief, or they just want to talk about it,” cautioned Treasurer Briese.
“There’s nobody here who wants to see the state shrink,” said Gov. Pillen. “If we want to keep growing our state, we need to keep plugging away.”
In addition to the primary property tax relief bill, the Governor also signed a corresponding appropriations bill (LB 34A) and two budget bills to help offset costs associated with LB 34. LB 2 and LB 3 were introduced on behalf of the Governor by Senator Rob Clements. All had an attached emergency clause, making them effective immediately with the Governor’s signature.
