Senators in the Nebraska Legislature wrestled with a slimmed-down property tax relief proposal Thursday, with a split between those who said something was better than nothing and those who wanted to try to do more.
Technically, lawmakers on Thursday were considering a cash and interest transfer bill to help the state make up for the revenue it would lose from the local property tax cut. Currently, that cut would be about $450 million, or about 3% of total property taxes, over the next three years. Sen. Rob Clements said that’s better than nothing.
“I’m disappointed, too, that we didn’t do more, but I think the choice was to get nothing or to get something,” Clements said. “And $450 million over three years is something, and I hope we come back next session and do more.”
While the average reduction in property taxes would be 3%, it would not be evenly distributed. For the majority of Nebraskans who already claim the property tax credit on their income tax return, nothing would change. But for the roughly 45% of people who do not currently claim the credit, it would now be automatically deducted from their property tax bill, reducing their tax liability by about 20%.
Senator Mike McDonnell said the proposal approved so far was inadequate.
“I had a meeting in Omaha at 7 a.m. this morning and as I was walking in, a couple of people stopped me and asked how things were going, what we’d been working on and where we were today. When I explained it to them, their response was, ‘That’s not enough. That’s not enough,'” McDonnell said. “It’s not enough.”
Senator Mike Moser agreed, but said it only reflected what senators were willing to do.
“The idea that this is only a 3% improvement in property taxes and that’s not enough, so I get mad and go home and stomp my feet, that’s not enough,” Moser said. “Yeah, it’s not enough, but it’s something, and we’re going to keep trying until we can make a significant difference without having more revenue. There weren’t many places where we could find money to offset the property taxes.”
At the start of the special session, senators considered raising the sales tax by about $600 million to finance a property tax cut of up to 50 percent, but that plan was dropped amid opposition to the new taxes.
Further information on the special session of Parliament:
The legislature is seeking budget cuts
Legislators push forward significantly reduced property tax bill
Parliament prepares important vote on property tax for Tuesday
Senators continue to discuss taxes
Special session debate: Should there be a special session at all?
Senator Justin Wayne said the latest, slimmed-down version would have little impact.
“We’re not really trying to solve the problem. We’re just putting the problem off,” Wayne said.
Wayne blamed House Speaker John Arch, who sets the agenda, for putting proposals from the Finance and Budget Committees before other ideas to raise revenue, such as legalizing marijuana or online sports betting.
“This is a dictatorship,” he said. “Nebraskans, your voices are not being heard. Your voices are not being heard because the process does not allow your voices to be heard. The Speaker has decided to silence you.”
Arch said he put the Revenue and Appropriations Committee bills first on the agenda because they most closely matched the reasons given by Governor Jim Pillen for calling the special session.
“I made it clear that I will do that,” Arch said. “And then I also made it clear that it is the will of this body when we are done with this. If you want to stay in session to discuss other bills, go ahead. Then we will do that.”
Senator Steve Erdman criticized the property tax measure LB34 that has been pushed forward so far, saying it would only lead to a smaller increase in the overall property tax.
“We’re always nibbling around the edges and saying we’ve done something,” Erdman said. “So I’m at the point now where I don’t care if we pass anything. OK? So I’m not going to vote for anything in the future – (LB)34, LB1,2,3, whatever you have. I’m out.”
The loss of Erdman’s vote could have significant consequences, as he was one of the 34 senators who voted to halt first-round debate on LB34. It takes 33 senators to halt debate and vote on the bill itself, so if Erdman and another senator drop out, the bill could be stopped.
As debate continued Thursday, senators debated whether to do something else or wait until the regular session in January to try again.