LINCOLN, Neb. (AP) — Nebraska Gov. Pete Ricketts will attempt to lower taxes for homeowners, farmers and military retirees this year while setting aside money to help the state recover from the historic 2019 floods.
The governor pledged in an Associated Press interview to present lawmakers with a property tax package during the legislative session that begins Wednesday. He said he’ll also continue pushing for one of his earlier priorities, a tax exemption for military retirees equal to half of their benefit income.
“What you’ll see in the budget that I lay out is us continuing to make significant progress on property tax relief,” Ricketts said. “We made progress in 2019, and we want to continue to build upon that.”
Ricketts and lawmakers will have more revenue at their disposal this year, thanks to higher-than-expected tax collections over the last several months.
“We have the opportunity to be able to deliver significant tax relief,” Ricketts said.
However, members of the tax-focused Revenue Committee still haven’t completed a property tax proposal for the upcoming session. Ricketts said he remains opposed to any measure that lowers property taxes by increasing other taxes, an approach the committee considered last year.
Revenue Committee members are now considering a bill that would reduce the amount of property that school districts can tax.
If it passes, school districts would only be allowed to tax 55% of the total value of agricultural land, down from the current 75%. They could tax 85% of the value of residential and commercial property, down from the current 100%. Nebraska would compensate the schools with increased state funding, but the bill would also impose spending limits on each district.
“The governor wants spending controls, and I do too,” said Sen. Mike Groene, of North Platte, a Revenue Committee member and chairman of the Legislature’s Education Committee. “Just throwing money at it isn’t going to work.”
The push comes as activists and some state senators gather signatures to place a property tax cut measure on the 2020 ballot. Ricketts has opposed the ballot measure, saying it would create budget problems and potentially lead to other tax increases. In the interview, he said there’s little he can do to stop the ballot campaign, and he plans to remain focused on addressing the issue in the Legislature.
“This is not a one-and-done kind of issue,” he said. “Even if we make progress on this issue this year, we still need to continue to work on this issue in the future.”
Ricketts said his budget proposal to lawmakers will include additional money to help cover the state’s flood recovery expenses. The federal government is expected to pay most of the cost, but the state must provide matching dollars for road repairs and to fix local, publicly owned bridges and buildings. Ricketts said the state will likely spread the costs out over several years.
“We just have to manage that within our budget,” he said.
Another Ricketts priority, the tax bill for veterans, is set for debate in the Legislature on Jan. 13. Sen. Tom Brewer, of Gordon, introduced the measure last year but it didn’t advance out of committee until just before the 2019 session ended.
Brewer said he believes the measure has a good shot at passing. He said Nebraska’s tax on military retirement income discourages former service members from remaining in the state, particularly when they can move to neighboring Iowa or Missouri and not pay any tax on their benefits. Those who do move often start new careers or businesses that generate other taxable income, Brewer said.
“This issue is bigger than people realize,” he said. “I’m really hopeful this will work out.”
