It’s Nebraska, not east and west
How do you get eastern Nebraska legislators working for western Nebraska interests and vice versa? Nebraska’s state senators will have seven months to think about just that and whether they can find common ground.
This year’s legislative session culminated in the classic rural vs. urban standoff that occurred in the final days of the shortened 90-day session. It’s not the first time senators of these two interests have butted heads and most likely, won’t be the last.
Ever since Dan Hughes of Venango began campaigning for the 44th District legislative seat, reining in out-of-control property taxes has been his goal.
This session looked like this would be the one where that goal could become a reality. Several bills were introduced to deal with rising property taxes, especially in the ag sector.
Property values soared after grain prices hit record levels early in the decade. Most local taxing entities took advantage of the higher valuations by increasing their spending which in turn raised property taxes.
Add to that the state’s formula to provide state aid to schools, which favors those districts with lower total valuations. Ag got hammered again as school funding accounts for a major share of local property taxes.
One bill that would have ensured all school districts got state aid proved too complicated with potential unknown consequences. Those uncertainties doomed the bill and it never moved past first-round debate.
A second bill, LB183, was pared down to providing $100 million in property tax relief, financing it with the removal of certain sales tax exemptions. A prior provision to raise the state sales tax by 0.5% to help produce additional revenue for even more property tax relief was not included in the bill.
Another bill of keen interest to urban senators was the passage of LB750, a new business incentive package for business growth and recruitment. The current package expires at the end of the year.
Speaker Jim Scheer said both bills deserved to advance. Despite his advice, LB183 failed to gain enough urban support to move the bill along.
At that point, rural senators decided it was time to make a point and stand their ground by blocking LB750. Typically, urban senators have the votes to get their way. But their lack of support for LB183 alienated enough other senators that their bill couldn’t advance either. With no compromise in sight, the speaker adjourned the session six days early.
Another dynamic exists in the quest for substantial property tax relief.
Rural senators make the case that additional sales taxes and the removal of some exemptions are not a tax increase but instead a tax shift away from a reliance on local property taxes.
Unfortunately, Gov. Ricketts disagrees and has taken the position that any move to increase sales taxes is a tax increase. He believes that dollars for property tax relief can come instead from reduced spending. That’s ironic because the state budget grew again this year.
Speaker Scheer was right—Nebraska needs both pieces of legislation to help grow our state. Urban senators must act on behalf statewide interests, not just for their own interests. Let’s hope the two can find common ground and the governor can get on board to move our WHOLE state forward.