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Revenue Committee chairwoman foresees a tax reform package

February 21, 2019

Another journey down the long and winding road begins next week.

Three major property tax reform proposals have received public hearings in the Legislature, and its Revenue Committee is ready now to begin to tackle the task of corralling majority support for a plan to send to the floor.

Sen. Lou Ann Linehan of Elkhorn will be leading the way as committee chair and she sees the likelihood of “one package, not one bill.”

“Components,” Linehan said Tuesday during an interview in her first-floor Capitol office. “Pieces of the puzzle.”

“What can we do right now? What next year and what finally later?”

Linehan is planning for the committee discussion to begin next week; first will come an executive session Thursday to get online sales tax collection legislation out of committee and onto the floor for legislative action.

And then, she said, it would help “if three guys come to some kind of agreement” about how to proceed with their competing tax reform bills that focus on property tax reduction.

“They’re all going in the same direction,” Linehan said.

Those senators are Tom Briese of Albion, Curt Friesen of Henderson and Mike Groene of North Platte.

All three are members of the committee and will be fully engaged in the discussions aimed at negotiating a settlement or a compromise, or at least a package, to take to the floor.

“But the whole committee will be involved,” Linehan said.

“There are parts of all of the bills that I like,” she said. “We need some big-picture understanding now.”

Linehan does not plan to involve Gov. Pete Ricketts in the discussion at this point.

“Not until I have something,” she said, and that might be sometime in April.

Ricketts has his own property tax reduction plan, which consists of a $51 million increase in the state’s property tax credit relief fund and a proposed constitutional amendment that would establish a 3 percent cap on the growth rate of local property taxes.

Friesen’s bill (LB497) has the support of the Nebraska Farm Bureau; Briese’s bill (LB314) has backing from the Nebraska State Education Association.

Only one senator from Omaha or Lincoln signed onto any of the three bills and that was Sen. Patty Pansing Brooks of Lincoln, who co-signed Briese’s proposal.

The Briese plan envisions $650 million in property tax relief by fiscal 2020-21 funded by generating new state revenue through a one-half percent increase in the state sales tax rate, imposing an income surtax on high-income Nebraskans, increasing taxes on cigarettes and alcoholic beverages, and repealing a number of sales tax exemptions.

Friesen’s proposal would generate an estimated $518 million in additional state revenue to fund 50 percent state support for every school by repealing a number of sales tax exemptions, increasing taxes on alcohol and cigarettes, and repealing the state’s personal property tax exemption.

The Groene plan (LB677) would reduce the maximum property tax levy for school districts, coupled with a corresponding increase in state funding triggered by the state aid formula. That increase was estimated at $91 million in fiscal 2020-21.