Property tax bill in limbo with Nebraska session on pause

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Posted at 3:57 PM, Apr 05, 2020
and last updated 2020-04-05 16:57:37-04

LINCOLN, Neb. (AP) — Nebraska lawmakers who are seeking to lower property taxes won some extra time to make a deal with opponents last month when the coronavirus pandemic brought their session to a halt, but so far it doesn’t appear that anyone is budging.

Key lawmakers said they’re still working behind the scenes from their homes to craft a proposal with enough support to pass in the one-house Legislature. The current version faces an uphill fight because of united opposition from Nebraska’s public schools, leaving some lawmakers frustrated.

“I don’t have any real suggestions from the school lobby as to what they could live with,” said Sen. Lou Ann Linehan, chairwoman of the Revenue Committee and a leading supporter of the bill. “All I hear is, ‘No, no, no, no, no.’”

School officials said they welcome portions of the bill that would substantially boost state funding for K-12 education, but they don’t trust lawmakers to maintain that commitment in future years. They also object to the bill’s proposed restrictions on their taxing authority, arguing that it would reduce their flexibility and eventually hurt their ability to educate students.

“We would be supportive of a measure that was pro-education, and that’s what we need to get back to,” said Mike Dulaney, executive director of the Nebraska Council of School Administrators.

Further complicating matters is the coronavirus pandemic that has forced all Nebraska schools to close and thrown the state’s economy into disarray, with a record-setting surge in unemployment claims. No one knows how the outbreak will affect state tax collections, which is key because the bill relies on state tax revenue.

The decision to suspend the legislative session created problems as well, making it harder for supporters and opponents to discuss the bill in person. Lawmakers have 17 days left in their 60-day session, which they’ll try to squeeze into one hectic, three-week period when they return to the Capitol.

“You can’t really negotiate on Zoom,” Linehan said, referring to the popular video-conferencing service. “When you negotiate, you need to be in the same room. You need to be able to read body language, to see if people are understanding what you’re saying. If you’re in the same room and you say something that people don’t like, you can tell it right away.”

Speaker of the Legislature Jim Scheer said he expects that lawmakers will debate the property tax proposal again before the session ends, but he warned that senators may not know for a while what the outbreak is doing to the state’s finances.

“From my perspective, it’s too early to know,” Scheer said. “I think it’ll be a while before we know from an economic standpoint what’s doable and what’s not doable.”

When lawmakers do return to the Capitol, Linehan said she hopes to shift the debate toward what could happen if nothing changes. Property taxes have soared over the last decade, primarily for farmers and ranchers, but many homeowners in cities are beginning to feel the pinch as well as residential values have risen.

Sen. Mike Groene, the chairman of the Education Committee and a key supporter of the bill, said the property tax package would help middle-income families and farmers who are struggling because of the virus. Even if the bill doesn’t pass, Groene said he intends to force a vote on it to put lawmakers on-the-record with their positions before the November election, given that many ran for office promising to lower property taxes.

“This is a big economic incentive that we can do in Nebraska,” he said. “There’s no better way to help the average, middle-class Nebraskan.”

School officials said they recognize the need to lower property taxes, particularly in hard-hit farming areas, but they also want to maintain local control.

Many small-town school board members are farmers who have personally seen their tax bills increase, said Jack Moles, a former superintendent and executive director of the Nebraska Rural Community Schools Association.

“We have pretty conservative boards of education,” Moles said. “They want to have good schools too, and they’re really good stewards of the local property taxes.”