Nebraska Property Tax Plan Slogs Through Legislature

April 6, 2016 09:07 PM

A property tax plan championed by Gov. Pete Ricketts is crawling through the Nebraska Legislature despite repeated attempts to derail it, with lawmakers giving second-round approval Wednesday to a bill that could make it easier for schools to lower their levy rates.

The measure by Sen. Kate Sullivan of Cedar Rapids would effectively remove an excuse that school boards use not to lower the rates, as well as tighten budget restrictions on bonding for projects such as mold abatement and environmental hazards.

Sullivan has said the measure, which is the culmination of work between Sullivan, Ricketts and Sen. Mike Gloor of Grand Island, seeks to address ongoing complaints about rising farm and ranchland property taxes.

Gloor has introduced a separate bill to increase a state tax credit for farm and ranch land owners. The two bills make up the governor's property tax package in this year's session.

Sen. Ernie Chambers of Omaha railed against the entire package Wednesday and mounted a filibuster to try to block Sullivan's bill. Chambers said the measures would help wealthy farm and ranch landowners who don't need it. But farm and ranching groups have argued that their property tax liabilities haven't kept pace with their incomes, which have fallen along commodity prices.

The package has also opened a rift between urban and rural lawmakers. Some Omaha-area senators said the package doesn't do enough for their constituents, while rural lawmakers point to soaring property taxes on agricultural land.

"People across the state have stood up and said loudly and clearly, 'We need property tax relief,'" said Sen. Dave Bloomfield of Hoskins, whose district is largely rural. "What do we get? Chicken feed."

Sullivan said her bill represents sound public policy that will ease some of the pressure on rural landowners without hurting local schools.

"Is it chicken feed? Well, it's something," she said. "I view some of these steps as incremental changes that need to happen."

Sen. Roy Baker of Lincoln, a former Norris Schools superintendent, said Sullivan's bill seeks to fix "bad public policy" that encourages schools to levy more from local property taxpayers so they can receive more state aid. Baker said his own district raised its levy even though it wasn't necessary and put the extra money into its cash reserve.

"It doesn't make sense to me to say if you levy a little more you qualify for more equalization aid," Baker said.

The original version of Sullivan's bill would have required districts to seek voter approval before issuing bonds on capital projects and imposed new limits designed to slow the growth of their budgets. It drew praise from Nebraska farming lobbyists but was roundly criticized by state school officials, who would have faced new restrictions on their budget authority.

Lawmakers adjourned for the day before starting debate on Gloor's bill. The Legislature resumes Thursday.

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