Nebraska lawmakers are gearing up for next year's legislative session with a focus on broad-based property tax relief for city dwellers as well as farmers and ranchers.
Legislative leaders and Gov. Pete Ricketts have pegged property taxes as one of the top priorities for the session, despite a projected budget shortfall.
Sen. Mike Gloor, chairman of the Revenue Committee, said he expects an attempt to slow the sharp land value increases that have forced farmers and ranchers to pay more in taxes. Gloor said he and others are also looking at proposals that would benefit residential and commercial properties.
But Gloor, of Grand Island, said there's "just no way" lawmakers will find enough money to bring property taxes into balance with income and sales taxes next year. Farmers and ranchers have complained that property taxes account for a disproportionately large share of their total tax burden.
"If we can come up with significant amounts of money year after year after year, we'll get there," Gloor said. But next year, "I think it's unlikely that we'll come up with hundreds of millions of dollars that would be required to get us back to an appropriate balance."
Speaker of the Legislature Galen Hadley said he doesn't yet know which specific property tax policies lawmakers will debate, but he expects the issue to dominate the short, 60-day session that begins on Jan. 6.
Hadley said it's too early to tell how the state budget will affect the Legislature's ability to reduce taxes. Nebraska faces a projected $110 million revenue shortfall in addition to major budget requests from the Department of Correctional Services, the Department of Health and Human Services and other agencies.
"I certainly hope we can put together some kind of package," said Hadley, of Kearney. "It seems like every time we get some momentum going, we get hit with one of these problems."
The projected shortfall will likely change in February, when the Nebraska Economic Forecasting Advisory Board meets to update its revenue projections. A projected increase in state revenue would make it easier for senators to balance the budget, but a decrease could force them to trim spending or tap the state's cash reserve.
Ricketts spokesman Taylor Gage said the governor remains "committed to working with senators to provide additional property tax relief," but declined to discuss specific proposals.
During a press conference last week, Ricketts said he wouldn't rule out an increase to the state's property tax credit fund, which uses state money to offset what property owners have to pay to counties and school districts.
Ricketts and lawmakers approved a budget this year that provided $204 million a year for the tax credit, increasing it by 45 percent. With the additional money, owners of a $150,000 home get a $141 credit applied to their property taxes.