LINCOLN, Neb. — A last-ditch effort to reduce property taxes has stalled in the Nebraska Legislature after key senators failed to reach an agreement before their deadline, lawmakers said Monday.
Seven lawmakers met over the weekend to try to find a plan that would win enough support to pass, but they remained divided over the best approach.
Speaker of the Legislature Jim Scheer convened the group last week in hopes of bringing lawmakers to a compromise. Monday marks the deadline for bills to advance through a first-round vote and have a shot at passing in the final days of the 2018 session.
One major sticking point was whether lawmakers should lower property taxes by increasing other taxes, said Sen. Jim Smith, chairman of the Revenue Committee. The senators met for nearly seven hours over the weekend after a contentious and unfruitful tax debate on Friday.
“I think that was an area that was most difficult to overcome,” Smith said.
One proposal would have raised state sales and income taxes and used that money to offset property taxes, which are levied by school districts, counties and other local governments. Smith introduced a package on Gov. Pete Ricketts’ behalf that would have lowered corporate income tax rates and provided income tax credits to reimburse property owners, but critics noted that it wasn’t clear how officials would pay for the cuts beyond their first year.
Another major sticking point was funding for K-12 education, a major driver of property taxes. In a statement, the senators said they recognized that the current system creates burdens on taxpayers.
“In looking to correct the problem, we need accountability for state funding of education both financially and for educational outcomes,” the senators said. “The difference came as to how to fix the problem.”
The impasse is likely to give momentum to a statewide ballot measure that would use more than $1 billion in state revenue to lower property tax bills. Some conservatives, including Gov. Pete Ricketts, have said the ballot measure could require major tax increases to compensate for the lost revenue.
The ballot campaign, Reform For Nebraska’s Future, is making “steady progress every day” in its effort to gather approximately 85,000 signatures by July 6, said spokesman Trent Fellers. Fellers previously predicted that lawmakers wouldn’t pass anything this year that would satisfy the state’s property tax payers.
“We think the people have the right to vote on this,” he said.
The senators involved were Scheer, of Norfolk; Smith, of Papillion; Sen. Tom Briese of Albion; Sen. Mike Groene of North Platte; Sen. Burke Harr of Omaha; Sen. Curt Friesen of Henderson; and Sen. Steve Erdman of Bayard.
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