A push to reduce property taxes in this year's legislative session is gaining new support in Nebraska with a widening coalition of agricultural and farm groups.
The new group announced Tuesday includes 16 organizations that will push for a package with "adequate and sustainable" funding for K-12 public schools while shifting the tax burden away from property owners.
Nebraska Farm Bureau President Steve Nelson said public schools have come to rely too heavily on property taxes to finance their operations. Roughly two-thirds of Nebraska's public school districts don't qualify for state equalization aid because their surrounding property values have risen too high, even though farm incomes have declined.
"We can relieve our overreliance on property taxes and still preserve education for our children," Nelson said at a press conference at the Capitol.
The new group, Nebraskans United for Property Tax Reform and Education, rallied with more than 50 members in advance of public bill hearings on Wednesday. One proposal would raise the state's current sales tax rate from 5.5 percent to 6.5 percent and divert the extra money into a state tax credit that offsets local property taxes.
Separately, Gov. Pete Ricketts has introduced a plan that would change the way agricultural land is valued so that it more closely aligns with farm incomes. If it passes, Nebraska would adopt a system already in place in South Dakota, North Dakota, Kansas, Iowa, Illinois, Indiana, Ohio and Wisconsin.
Farm groups have said they appreciate the proposal but argued it won't have a large enough impact on their property tax bills. Some are also concerned that Ricketts' proposal to lower the top income tax rate will divert money away from their attempts to reduce property taxes. In response, Ricketts points to measures he championed over the last few years that used millions of dollars in state money to lower property taxes.
Nelson said the coalition would support eliminating sales tax exemptions or raising the state sales tax rate, but added that he's open to different ideas. Ricketts has said he opposes any attempt to raise taxes.
Property taxes have surged in part because schools have been forced to make up for lost state equalization revenue, said York Public Schools Superintendent Mike Lucas. Lucas said school districts have shown financial discipline when balancing their budgets but can only do so much.
"It's not a school spending problem. It's a funding problem," said Lucas, speaking on behalf of 15 mid-sized Nebraska public schools.
Former state Sen. Al Davis, a Hyannis rancher, pointed to repeated legislative studies which have concluded that property taxes are a disproportionately large share of total government revenue when compared to sales and income taxes.
"It's past time that the Legislature do something," said Davis, a representative for the Independent Cattlemen of Nebraska.