LINCOLN, Neb. — A Nebraska lawmaker who has fought for property tax cuts unveiled a major proposal Thursday to address the issue and warned again that he will try to place it before voters if senators don’t act this year.
Sen. Steve Erdman of Bayard introduced the measure as an advocacy group prepares for a statewide signature-gathering initiative to put a nearly identical proposal on the November general election ballot.
Erdman and leading farm groups have said they will try to persuade lawmakers to pass property tax legislation in this year’s session, but will keep the ballot petition available as a backup in case nothing happens.
“There’s not going to be a will (in the Legislature) to do anything unless they’re forced to,” Erdman said Thursday.
Lawmakers have passed a handful of property tax measures over the last decade, most often by steering state money into a tax credit fund that offsets what property owners have to pay.
Some farm- and ranchland owners say those measures aren’t enough to offset land values that have risen sharply. Property taxes on agricultural land increased nearly 164 percent between 2006 and 2016, according to the Nebraska Department of Revenue.
Yet attempts to pass new property measures have faced growing resistance recently, in part because a majority of senators now come from Omaha, Lincoln and other cities where property taxes haven’t risen as quickly.
Erdman said he’s hopeful the ballot measure will win support from at least some urban homeowners, whose property taxes have also started to increase. He said a handful of Lincoln residents approached him recently to complain about their home property tax bills.
“I think it can be done,” he said. “We’ve been talking about property taxes now for 40 years. It’s time to start doing.”
Erdman’s proposal, the “Property Tax Relief Act,” seeks to lower property taxes using income tax revenue. Starting in January 2019, taxpayers would receive a refundable income tax credit equal to half of the school district taxes levied on their property. Because it’s refundable, property owners who pay little or no income taxes could get money back from the state.
It’s not yet clear how much the legislation would cost, but the bill would likely trigger a large flow of state money back to property owners. Erdman has estimated it would trigger about $1.1 billion in property tax reductions statewide, starting in 2019. Property taxes are levied by local governments, and the state can only influence them indirectly.
Gov. Pete Ricketts has questioned the plan, saying it would lead to either massive cuts in state services or a large increase in sales or income taxes. Ricketts is expected to unveil a different plan that includes property and income tax reductions during his annual State of the State address on Wednesday.
Sen. Jim Smith of Papillion, chairman of the tax-writing Revenue Committee, said last week that any tax plan will likely need to address income and property taxes to win approval from lawmakers.
A group that pushed for property tax reductions in last year’s session, Reform for Nebraska’s Future, is now spearheading the ballot drive. The organization has already submitted proposed ballot language to the Nebraska secretary of state’s office and will start collecting signatures in the coming weeks, said Trent Fellers, the group’s spokesman.
Fellers said the group faces a “massive undertaking” to gather the roughly 85,000 signatures that are needed, but expressed confidence that organizers would succeed.
“We’ve been really overwhelmed by the amount of support we’re getting,” he said. “Right now, I think putting this in the hands of the people is the path that needs to be taken.”
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