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This week, the Legislature’s Revenue Committee is scheduled to hold a hearing on LB 289, a bill proposing the largest tax increase in the history of Nebraska.
The bill raises the sales tax to its highest level ever for an estimated $210 million sales tax increase on Nebraska families. It raises the cigarette tax. It also imposes new taxes on plumbing and HVAC services, bottled water, candy, and veterinary care among other items. This will make many basic necessities, such as cars, appliances, and pet vaccinations more expensive for working Nebraskans. It will also raise the cost of common amenities like gym memberships and TVs.
Worst of all, LB 289 proposes to take away $224 million in existing property tax relief and redirect it to increase spending. Right now, Nebraskans receive a credit from the state that provides property tax relief by reducing your tax bill. The Revenue Committee is proposing to wipe out this credit to fund government’s spending addiction.
Some Senators have argued that they cannot deliver property tax relief without these proposals. History and common sense, however, tell us the Legislature’s plan will not work. In the past, Nebraska has tried to provide property tax relief by raising other taxes and pumping significant amounts of money into state aid to schools. Every time, we have ended up with record high property taxes within a few short years. If Senators raise taxes again, we can expect the same results.
Nebraskans want to see real property tax relief, not smoke and mirrors. It’s time for Senators to break the seemingly endless cycle of taxing and spending in Nebraska. To do so, they need to get back to the basics and control spending. Here are a few ways the Legislature can deliver true property tax relief without raising your taxes:
- Budget Discipline: The key to tax relief is controlling spending. Just like your family, government should live within a budget. If state and local government do not control spending, there will be no tax relief and possibly tax increases in the future. If they do control spending, they will have room to do tax relief every year – like I proposed in each of my budgets!
- Direct Property Tax Relief: By controlling spending, the state delivers $224 million of direct property tax relief annually to Nebraskans. In January, I proposed an additional $51 million in annual property tax relief, bringing the new total to $275 million, or almost double from when I took office. The Revenue Committee is proposing to end the practice of delivering direct relief; instead, they want to redirect these resources away from you and into school budgets.
- Limit Local Tax Growth: We have a complicated property tax system full of assessments, valuations, levies, and boards. Right now, there’s no limit on the money local government can take from you, which means your property tax bill is often an unpleasant surprise. By limiting the annual growth in taxes, we can create certainty for taxpayers. I proposed LR 8CA this year to limit growth in local taxes, however, the Revenue Committee has voted down my proposal. They refuse to let Nebraskans vote on this issue.
- Valuation Reform: For tax purposes, Nebraska values property based on market value. This works well in many cases, but not when valuing farm and ranch land. Many ag states use an income potential system for assessing property for tax purposes, and Nebraska should do the same. This would ensure that taxes better reflect current commodity prices and the land’s ability to produce—helping protect future generations of family farms.
- Basic Funding: While the state provides $1.4 billion annually to fund K-12 schools, many school districts receive relatively little aid. To fix this, I support providing a basic level of funding for schools on a per-student basis. This can be done using existing state revenues without raising taxes, and it ensures every school district receives a basic level of state support.
These are just a few of the ways your Senator can deliver property tax relief for you this session. If you want to see the Legislature control spending instead of raising taxes, I hope that you will contact your Senator. You can find all their contact information at www.NebraskaLegislature.gov. If you have a question on this topic or any other, you are welcome to contact me at firstname.lastname@example.org or 402-471-2244.