LINCOLN, Neb. (AP) — Nebraska lawmakers began debate Tuesday on a special session bill to ease soaring property taxes, largely through mid-year budget cuts, caps on spending and shifts to sales and special taxes. But likely to be left on the cutting room floor are several bills designed to bring in millions of dollars a year in new revenue.

Among the new revenue measures are proposals to legalize marijuana and expand online gambling. Another would free up an estimated $25 million a year by allowing early parole for people who are incarcerated and meet certain criteria, as well as encouraging judges to offer alternatives to jail for some offenders — moves that would ease prison overcrowding and lower the state’s cost of feeding and caring for people in prison.

Republican Gov. Jim Pillen called the summer special session after the Legislature failed to pass his proposed plan to cut property taxes by an average of 40% during the regular session earlier this year.

Soaring housing and land prices in recent years have led to ballooning property tax bills for homeowners and farmers alike. Nearly all lawmakers in the officially nonpartisan Nebraska Legislature agree that ever-increasing property tax bills are forcing some people, including young and older people on fixed incomes, out of homeownership.

But they disagree on how to fix the problem. Democrats accuse Pillen and his allies of trying to ease property taxes on the backs of poor people, while some hardline conservatives object to any tax increase without significant cuts to spending.

Democratic Sen. Terrell McKinney introduced the bill intended to ease prison overcrowding and costs, which has not advanced from committee.

McKinney and fellow Democrat Justin Wayne have also proposed bills that would legalize marijuana use and regulate its production and distribution.

“That could bring in potentially $150 million,” McKinney said Tuesday. “Y’all don’t want to entertain that conversation, which is wild to me if we’re coming here and you guys are saying to put everything on the table.”

The question of legalizing marijuana could appear on the November ballot after a petition effort turned in nearly 115,000 signatures to state election officials in July — more than the 87,000 or so needed. The Nebraska Secretary of State’s Office is in the process of verifying the signatures.

A plan by Democratic Sen. Eliot Bostar would put on the November ballot a proposal to allow online sports gambling. The General Affairs Committee advanced for debate of the full Legislature but without a companion bill that would adjust ballot language deadlines to allow it to make the ballot. Bostar estimates the proposal could bring in more than $30 million a year in tax revenue.

Wayne, who supports the expanded gambling bill, said Nebraska is losing out on revenue that state residents already spend on online sports betting by simply crossing the border into neighboring states that allow it. That happened during the most recent College World Series held in Omaha, just west of Iowa, which allows online sports betting, he said.

“They literally drove over to Carter Lake, (Iowa), if they were in a car, and if they weren’t, they walked over to the Bob Kerrey bridge, got on their phone and made a bet,” Wayne said. “All that revenue is gone.”

The plan backed by Pillen, which remained in flux Tuesday, calls for dozens of goods and services currently exempt to be subject to the state’s 5.5% sales tax. That includes such things as pet grooming and veterinary care, real estate transactions, lawn mowing and landscaping, taxi and other transportation services, moving and storage. Many agriculture services and purchases — including machinery, chemicals, seeds, irrigation, and grooming and veterinary care for livestock — remain exempt.

Pillen’s plan would also issue several so-called sin taxes on purchases of candy, soda, cigarettes and vaping items, CBD products and alcohol. It would also cap the amount public schools and city and county governments could collect in property taxes.

Lawmakers expected to debate a version of the governor’s proposal throughout the week.

LINCOLN, Neb. (KLKN) – Nebraska baseball coach Will Bolt signed a five-year contract extension on Tuesday.

The deal runs through the 2029 season, Athletic Director Troy Dannen announced, and Bolt’s annual salary will be $500,000.

“We are pleased to have Will Bolt as the leader of our baseball program well into the future,” Dannen said in a press release. “Will has been a big part of the success of Nebraska Baseball over the past two decades, not only as the head coach, but also as an assistant coach and player. Through his past experiences, he knows what it takes to win at Nebraska and has a great vision to continue to elevate our program in the coming years.”

Bolt helped lead Nebraska to the program’s 19th 40-win season this year.

Nebraska then secured its first Big Ten Tournament title since joining the conference in 2012.  It was also the Huskers’ first conference tournament title since 2005.

“I would like to thank Athletic Director Troy Dannen and Deputy Athletic Director Dennis Leblanc for their confidence in our leadership and the direction of our program,” Bolt said in the release. “There is a lot of momentum with our program, and I am grateful for the dedication of our coaching staff, the hard work and commitment of our players, and the incredible support of our fan base.”

In five seasons with Nebraska, Bolt has 137 wins under his belt, the sixth most in program history.  The Huskers have also won two conference titles and made a pair of NCAA regional appearances with Bolt at the helm.

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.