By Senator Tom Brewer
The Governor’s special session of the Nebraska Legislature has adjourned Sine Die. The 108th Nebraska Legislature is in the history books. I have still got some interim study hearings to complete, but I will never be “under the gavel” (in session) as a Senator on the floor of the legislative chamber again.
The governor said in his press conference we will see about a 20% reduction in property taxes. I have heard some Senators say it will be much less than that. It is clear to me that there are several assumptions in the funding formula that must prove-out in real life before anybody will know what the exact reduction will be.
The increases in sales tax the Governor first proposed did not happen. Spending caps on local government stayed in the bill (public safety and emergencies excluded). $750 million went into the School District Property Relief Credit Fund, and more will every year. Any State revenue growth over 3% is directed toward property tax relief. Most of the bill will go into effect in October. I believe it is likely to be more reduction than is being predicted simply because it is a wiser policy for politicians to under-promise and then over-deliver.
It suffices to say that the amount of property tax reduction is not enough, and it is not fast enough. However, property taxes will be less next year, not more, or politicians who said different will have to answer for it. This has not been said in Nebraska for 57 years. The arrow on the chart is finally pointing down, but not by much. Whether it continues to is now a question for future senators.
It appeared to me that the solution that finally had enough votes to pass made sure to protect and preserve our three broken systems of taxation; income, sales, and property taxes. When you are forced to use these systems, it really limits your options and shuts down any possibility of an out-of-the-box idea being adopted. I hope future senators can break that paradigm. Every single state with growing populations and growing wealth for their citizens has two things in common: they don’t have an income tax, and they have very low property taxes. They raise most of their state’s revenue by taxing “consumption” at the retail point of sale. (a sales tax).
If any lesson is taken from the special session, it is clear the taxing authority of our local units of government is something they will fight tooth and nail to defend. Something so strongly defended will not be easily changed in Nebraska. I think a lot of senators got to see the slogan Local Control! has a lot of political power behind it. Incidentally, those fighting the hardest against changing our tax system, are also the same people that fund most of the political campaigns. There are a lot of six and seven figure jobs in Lincoln and Omaha that utterly depend on the status quo never changing.
I am grateful Nebraska finally has a governor with the courage necessary to call a special session to address this crisis, because it has been destroying my part of the state for my entire life. As a senator, I am thankful for the incredible talent and experience of my two colleagues, Senator Linehan and Clements, for guiding the body to the best outcome we could hope for.
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.