LINCOLN — Nebraska lawmakers are officially set to debate a tax relief package Tuesday that will include consideration of ending nearly 70 sales tax exemptions to provide funding for property tax cuts. 

One month ago, a draft property tax plan indicated lawmakers might begin taxing sales of 120 more goods or services. That number has been incrementally reduced in successive rewrites, and at this point has been cut nearly in half. 

The proposal

Some of the main components of the tax plan include:

• Lowering the maximum school district tax rates for operational expenses to 40 cents per $100 of valuation for fiscal year 2025-26; 35 cents in 2026-27; and 30 cents in 2027-28 and beyond. The current maximum rate is $1.05.
• Capping the annual increase in property tax collections by municipal and county governments at the rate of inflation or at 0% in times of deflation.
• Crediting taxpayers for property taxes paid to their natural resources district (beginning at 50% in the next fiscal year).
• Reimbursing county jail expenses (beginning at 25% in the next fiscal year).

Revenue Committee advances NE property tax relief package, with debate to start Tuesday

Most funding will come from retooling existing property tax reduction programs, such as tax credits and the portion of homestead exemptions no longer needed as school tax rates come down.

The other major area of financing will come from the newly taxed goods and services and increases to “sin” taxes, such as on spirits, cigarettes, oral nicotine pouches, vapes, cigarettes, keno and cash devices.

Legislative Bill 34, as originally introduced by State Sen. Tom Brewer of north-central Nebraska, would freeze property valuation increases over four years. He has described it as a “backup plan” or “fail-safe.”

‘They don’t fix the problems’

State Sen. Brad von Gillern of Elkhorn, vice chair of the Revenue Committee, said he is “cautiously optimistic” heading into Tuesday’s floor debate after he and the committee chair, State Sen Lou Ann Linehan, and others “listened to parties on all sides.” Von Gillern said committee members tried their best to build the bill around concerns raised.

State Sen. George Dungan of Lincoln, the lone “no” committee vote on LB 34, said the package remains “inherently regressive” and would hurt low-income residents. He said it would also not provide relief to renters, who live in about 50% of the housing units in Dungan’s district.

“I understand there are certain parts of it that are intended to help low-income individuals, but on the whole, when you balance those against the other portions of the bill, I simply think they don’t fix the problems,” Dungan said.

State Sen. Eliot Bostar of Lincoln, who was “present, not voting” on Monday’s committee vote, said afterward: “It’s just not there yet for me.”

The Legislature is officially nonpartisan, but votes sometimes split along ideological lines. On Monday, the six Republican committee members supported the package. Dungan and Bostar are Democrats.

Municipalities have raised concerns about the proposed sales tax changes on two fronts. One is with the state collecting an additional 12% in local sales tax revenue each year. The other involves how businesses can request future refunds for economic development and workforce incentive programs, such as the Nebraska Advantage and ImagiNE Nebraska Acts.

Those tax incentive programs utilize local sales taxes, but with the municipalities not collecting the full tax base, some have said it could further complicate planning for those future refunds.

Von Gillern pointed to a provision of LB 34 ensuring that cities or villages do not collect less sales tax revenue than they did in 2023-24, plus a 1% annual increase.

“There is a floor built into the bill, so they’re not going to get hurt on any of that,” he said.

‘We’ve got to get to 30’

Von Gillern also pointed to an independent study from Ernie Goss, a regional economist and professor at Creighton University, contending that all taxes are regressive but that high property taxes are the most detrimental to economic growth.

“We’ve done as much as we can to take as much out that would have impacted the lowest income people, and I think we’ve done a good job of that,” von Gillern said. “We listened to the opponents, and we tried to modify as much as we could.”

He also pointed to internal legislative modeling, which was done on a previous tax package, where families with modest income would see a net benefit. He said that “seems to be forgotten in this discussion.”

Linehan said she thinks she has 31 votes but that getting to 33 votes on some bills to break a filibuster, particularly on proposals related to taxation, is “very, very partisan.”

“We’ve got to get to 30,” Linehan said. “I think we’re at about 31 right now.”

Many provisions of LB 34, if passed, would take effect Oct. 1. That would require 33 votes not only to end debate but also to pass the bill to take effect within three calendar months. Sales tax exemptions or repeals can only occur at the start of a calendar quarter.

First-round debate on the package will begin at 9 a.m. Tuesday and can last up to eight hours.

LINCOLN, Neb. (KOLN) – Nebraska’s current special session is shaping up to be the costliest one in the state legislature’s history.

According to Clerk of the Legislature Brandon Metzler, it has cost just under $127,000 since it began on July 25.

“It’s, on a daily basis, the most expensive special session,” Brandon Metzler, Clerk of the Legislature, said. “It’s certainly somewhere in that ten to fifteen thousand dollars a day.”

Much of how the money has been spent can be broken down into three main categories:

• Per diem for senators, which has totaled over $86,000 so far.
• Salaries for employees such as pages and sergeants working the session specifically- that has been just under $23,000.
• And the cost of printing each paper, for each bill and it’s amendments, for each senator. So far, more than $14,000 has been spent on that alone.

“We’re talking about 100, 150 pages,” Metzler said. “And every time it’s a rewrite, that’s another printing of the same 150 pages. So they add up very quickly.”

LB4, the Nebraska bill introduced at the beginning of the session to set aside tax-payer money to cover the session’s expenses, planned for a session lasting 10 days. Monday was the tenth day, and the end date is still unknown.

“You have an ongoing special session with undetermined costs at this point,” Metzler said. “And yet we have a bill with a hard cap on what that costs.”

He said that there are still enough funds to cover the session for around another week. Going longer than that could mean having to bring LB4 back onto the floor, where it can be amended to allocate more funds to cover the session’s cost.

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LINCOLN, Neb. (KLKN) – The Nebraska women’s soccer team had a magical season in 2023, and senior forward Abbey Schwarz hopes to lead the Huskers to an even greater campaign in 2024.

Schwarz enters her senior season with an already loaded resume.

Big Ten Distinguished Scholar (2023, 2024), Academic All-Big Ten (2022, 2023), Big Ten Freshman of the Week (Oct. 26) and the Tom Osborne Citizenship Team (2022, 2023, 2024) are just a few awards to her name.

The Huskers kicked off preseason soccer last Monday.

Schwarz made her presence on the pitch known with two goals to help give Nebraska a 5-1 win over Kansas City.

“Finishing off some of those scrappier goals is one of my goals,” said Schwarz. “It was good, it was a good little confidence boost.”

The Huskers experienced a run unlike any in recent memory last season, winning the Big Ten regular season title and making it the Elite 8 in the NCAA Tournament.

“Last year was such a great year and I think one of the best things is that we were so present to the moment,” said Schwarz.

Looking ahead to this season, Nebraska comes into the year pre-ranked 6th in the nation.

Starting out sixth.

️ https://t.co/VgzgcwRVIF | #GBR pic.twitter.com/vq2fW6MvJn

— Nebraska Soccer (@HuskerSoccer) August 7, 2024

“Seeing where we’re at now and setting our sights on Big Ten regular season, tournament championships, and national championships things like that,” said Schwarz. “There’s been a shift, I think, in just the perspective of not only on the individuals on the team but the team collectively.”

Nebraska finished with a 1-1 record in preseason games following a 1-0 loss to Oklahoma on Friday.

The Huskers kick off the year at Hibner Stadium versus Oklahoma State on Thursday, Aug. 15 at 7:05 p.m.