By Senator Tom Brewer
The 2nd Session of the 108th Legislature adjourned “Sine Die” (‘Sine Die’ is a Latin phrase meaning without any future date being designated). In his speech yesterday, Governor Pillen made it clear that this is probably not my final session in the Nebraska Legislature. The Governor said he plans to call a special session to address the property tax issue. I supported Senator Linehan’s LB 388 brought on behalf of the Governor. Depending on the school district it would have lowered property taxes by 25-50%. The bill did not have the votes and it was passed over during debate on the floor.
I strongly support the Governor’s focus on the property tax crisis we have in Nebraska. Since our Legislature passed the income and sales tax in 1967, property taxes have steadily grown worse. We have reached the point where citizens are forced to sell their property in order to pay the property taxes. This isn’t just bad public policy; this is immoral. I am glad the Governor has made this his top priority. I support him 100%.
That being said, whatever bill is produced from a special session will be vigorously filibustered. Nebraska’s 244 school districts, our 528 incorporated villages, towns and cities, and our 93 county governments have greater authority compared to neighboring states. If you add them all up, there are nearly 3,000 ‘Local Units of Government’ in Nebraska that have the authority to levy, collect and spend property taxes. They will fight tooth and nail to protect their only source of revenue to fund the operation of their local unit of government. LB 388 would have provided the same amount funding to schools, except some of their funding would have transitioned to the state budget and reduce the burden on property tax payers.
It will be hard to know how many senators will support what comes out of a special session because the bill isn’t written yet. However, there is an election coming in November and a number of senators are hoping to be re-elected. Setting the political conditions necessary for passing a comprehensive property tax reform bill are coming together.
I have been a supporter of Senator Erdman’s EPIC consumption tax idea for many years. Between income, sales and property taxes, we collect $11.7B in Nebraska. The revenue from all of our current forms of taxation would be replaced by a single “consumption” tax collected at the retail point of sale. This idea would tax all services, and all “new” goods, except groceries and other life necessities. I think out-of-the-box ideas like this will steadily gain more support. A special session will see Senator Erdman introduce this bill introduced for a third time.
The reality is 75% of the senators in the legislature represent Lincoln and Omaha. In a couple years, the valuations made by the county assessors in Douglas, Lancaster and Sarpy will have risen to the point their schools will no longer receive state aid from our school funding formula. In the very near future this will increase property taxes in our two population centers by over 20%. I think this reality will provide us a historic opportunity to finally fix the most important issue facing Nebraska.
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.