LINCOLN — State Sen. Julie Slama of Dunbar, who has criticized Gov. Jim Pillen’s property tax relief plan for costing many Nebraskans more while he benefits, touted her own proposal Saturday.

Slama’s 16-piece package of proposed constitutional amendments largely mirrors Colorado’s Taxpayer Bill of Rights (TABOR), with hard limits on state, local and school taxing and spending.

She split up the proposal to avoid running afoul of the Nebraska Supreme Court and the state constitutional rule that restricts certain new laws to a single subject. 

Her proposal to let Nebraskans adopt a TABOR-style initiative at the ballot box this fall was heard Saturday by the Revenue Committee.

Slama described her proposal as a long-term fix for rising taxes linked to increased spending by local, school and state governments. She said it would let voters apply the brakes.

“This approach is unique in that it empowers the people,” she said. “It empowers the people to decide what their tax rate should be, what government should be spending money on.”

What Slama’s amendments would do

Essentially, her amendments would cap spending and taxing authority by every level of government unless overridden by a vote of the people. It would also let constituents sue the government to enforce the caps.

It would require a public vote to issue major government debt or bonding and would require a baseline rainy day fund of 3%.

Slama said her proposal, as an example, would likely prevent any future project like the City of Omaha’s modern streetcar project without voter approval.

Nobody but Slama testified in support of the idea, but State Sens. Brad von Gillern and Kathleen Kauth, both of Omaha, who sit on the Revenue Committee asked questions that seemed to express interest in the idea.

Both nibbled around how Slama’s proposal might be more lasting than others because it would be part of the constitution and not a state law that lawmakers could more easily change.

Both seemed to buy into Slama’s idea that her proposal would pair well with any short-term fix for property taxes the Legislature might adopt during Pillen’s special session.

“By any measure this is wildly popular in Colorado,” von Gillern said at one point in the hearing. “It’s hard to say the people shouldn’t have a voice in their tax policy.”

Slama, asked whether additional lawsuits could cost taxpayers more, said they wouldn’t because most would stop wayward tax increases with court injunctions.

Critics question damage caps could do

State Sen. George Dungan of Lincoln and a pair of testifiers from Colorado, encouraged to testify by OpenSky Policy Institute, emphasized the potential damage to school and local funding.

Dungan questioned what role the passage of TABOR played in Colorado ranking near the bottom nationally in teacher pay and in school funding per pupil.

Representatives from the Nebraska Association of County Officials and the League of Nebraska Municipalities warned about the risks to hiring and retaining public employees.

Jon Cannon, executive director of NACO, and Lynn Rex, executive director of the League of Nebraska Municipalities, pointed to the declining condition of Colorado’s roads and said Nebraskans wouldn’t accept such poor road conditions.

Former Colorado state Rep. Brad Young and Denver-based economist Chris Stiffler said many local governments and school districts have opted out of TABOR, after public votes, because of the funding crunches it caused. (Nebraska’s version, as written, would limit the authority of local governments and schools to opt out.)

Young, who wrote a book about TABOR’s negative effects, said setting the cap for government spending growth at inflation plus population growth didn’t let local governments keep pace with their needs.

He said shrinking government relative to the economy means that the state and its local partners couldn’t pay competitive wages to teachers, health care workers or college and university employees.

“Population plus inflation does not keep up with the economy, and as a result, you end up with a constant shrinking of the government,” Young said.

Government costs don’t follow CPI, expert says

Stiffler said tying the government’s ability to purchase what it needs to the consumer price index leaves governments too little flexibility.

Governments “buy” roads, teachers and health care, he said, all of which have seen costs  rise faster than the types of goods in the consumer price index. He said tying caps to a producer price index might work better.

He said some states tie spending caps to personal income growth. But he said starting teachers in Colorado now earn less than a Starbucks manager and the state is losing talent.

Some districts shortened the school week to four days during a recent round of state budget cuts that sliced $1 billion out of school funding, Stiffler said. 

State Sen. Lou Ann Linehan of Omaha said Colorado’s schools consistently rank well in test scores and academic offerings.

She said higher school spending doesn’t always equate with outcomes, and she said Colorado isn’t struggling to attract new residents or visitors. 

Colorado has grown from about 3.5 million in 1992, when TABOR passed, to 5.8 million in 2024, based on Census estimates. 

“I know this is a slightly unique approach, but it brings a unique flavor to the debate,” Slama  said. “Nebraskans work hard for their money, and they deserve a direct say in how it is spent.”

Nebraska voters rejected a TABOR-style state spending lid in 2006.