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Battle lines drawn on property tax debate

Posted at 6:37 PM, Jan 22, 2020
and last updated 2020-01-22 19:37:13-05

LINCOLN, Neb. (KMTV) — The stakes of the issue were made known about an hour into the hearing Wednesday.

"As a company we are looking at investing in Iowa, possibly liquidating in Nebraska," says Ed Herlein, who runs an ag business.

Farmers and those that run ag businesses like Ed Herlein say property taxes are too high and they want to see this bill pass to help bring them down.

"There was no other thing to do but support this bill, it's the best thing going right now, it is the thing going right now," says former Lt. Governor, Lavon Heidemann, who was representing a variety of ag groups.

The bill would bring taxes down for those that own homes and commercial property, reducing taxes paid to school districts by 15 percent by 2022.

It would reduce taxes on ag land more, going from what it is currently taxed at, 75 percent, eventually landing at 55 percent in the next two years.

Revenue committee chair Lou Ann Linehan says it'll drop property taxes paid to schools an estimated 15 percent.

"We believe that this bill offers a firm foundation upon which to build subsequent legislation in future sessions, further relieving property owners,” says Doug Kagan, with Nebraska Taxpayers for Freedom.

The reason they can reduce these taxes is they'll throw 520 million dollars of estimated extra revenue into the school aid formula.

That was cause for concern from some.

"The funding of LB 974 is based upon projected increase state revenue, the only fiscally responsible way to provide property tax relief is to fund it with new state revenue sources,"

Dave Welsch, Milford school board president.

Each district, many of which receive no state money, would get at least 15 percent of its budget from the state. It'll also cap the amount schools can raise local property taxes every year, which schools also didn't like.

"We are being punished for being fiscally responsible,” says Welsch.

Large school districts could see decreased funding from this plan, and to make up for that, they're giving those districts like Omaha, Millard and Lincoln transitional aid for at least three years, but that still was cause for schools to worry.

"Transition aid as a solution requires a district that is demographically changing, potentially growing, having increases in special education populations to decrease their budget by one percent when the cost of staffing is going up," says associate superintendent for Lincoln Public Schools, Liz Standish.

This bill is expected to change, at least a bit. Governor Pete Ricketts supports the broad outline of the bill and is working with the committee on amendments.