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Debate starts in Lincoln on controversial tax bill

Posted at 10:19 PM, May 07, 2019
and last updated 2019-05-07 23:23:13-04

LINCOLN, Neb. (KMTV) — No votes were taken Tuesday, so nothing has been decided, but battle lines were drawn.

Rural senators say the bill balances out the tax system, saying the state has some of the highest property taxes in the country.

"We're trying to compete with states who charge eight dollars in property taxes and we're at 100,” says state senator Curt Friesen, of rural central Nebraska.

The bill would raise the state's sales tax by a half cent, and start taxing services not currently taxed, like haircuts, vet care and auto repair.

The $370 million of extra revenue would go to fund public schools, which currently rely heavily on property tax dollars.

"We must pick up a greater share of K-12 education and that's what this bill does,” says state senator, Tom Briese, one of the architects of the bill.

But at least two senators from urban centers say it'll hurt those inside the cities. Senator Adam Morfeld of Lincoln is worried the big school districts like OPS and Lincoln Public Schools will lose the flexibility to ask for more funding, as they grow.

Chambers, of north Omaha, says the tax increases will hurt the poor and only help rural parts of the state.

"I have not seen a time when the farmers were concerned about any segment of the population other than their own, when there is a flood in their territory, here they come...and we want to bail them out,” says senator Ernie Chambers.

Bill sponsor Sen. Lou Ann Linehan says the state provides over half the budget for some school districts such as Grand Island, while small school districts like Elgin, get almost no state funding.

"I think Nebraskans, if they truly understood that, would not think that's fair, and that's what we need to change, it needs to be fair to the taxpayers and it needs to be fair to the students,” says Linehan.

The fate of the bill is unknown, because some senators haven't made up their mind yet.

John McCollister of west Omaha, worries the school funding portion isn't sustainable long-term.

"I think we're not quite there yet, we haven't quite developed the plan that we need,” says McCollister.