Sens. John Fredrickson of Omaha (from left), Barry DeKay of Niobrara, Tony Vargas of Omaha and George Dungan of Lincoln speak during the second day of the Legislative Special Session on July 26 at the Capitol. Dungan was the lone member of the Legislature’s Revenue Committee to vote no Monday on the advancement of a property tax relief package that remains unpopular among some urban lawmakers.
KATY COWELL Journal Star
After Nebraska lawmakers adjourned early for the weekend Thursday in an effort to negotiate a compromise tax plan, a key committee voted Monday to send a property tax relief package to the floor of the Legislature that remains unpalatable to critics.
Led by Sen. Lou Ann Linehan of Elkhorn, the Legislature’s Revenue Committee voted 6-1 on Monday to send the tax cut package on to the full Legislature.
Sen. George Dungan of Lincoln cast the committee’s lone no vote, while Sen. Eliot Bostar of Lincoln was present-not-voting. Six conservatives, including Linehan, voted to advance the plan. The full Legislature will begin debating the tax plan Tuesday morning.
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The committee’s 122-page tax plan — which calls for the state to eventually take over more than $1 billion in public school costs currently funded by property taxpayers — underwent few changes over the weekend.
When lawmakers adjourned last week, the proposal called for the maximum property tax rate school districts can levy to drop from $1.05 now to 25 cents by the 2025-26 fiscal year, replacing the locally collected taxes with state aid.
The version lawmakers advanced Monday instead calls for incremental cuts to school districts’ max levies, dropping the rate from $1.05 to 40 cents next year, 35 cents the year after and 30 cents in the 2027-28 fiscal year. That change followed criticism Friday from a coalition of schools groups that warned the prior plan moved “too far too fast.”
The latest plan also spares agricultural and manufacturing equipment and machinery purchases from a 2% sales tax the prior plan sought to impose.
The plan advanced by the Revenue Committee also scraps a proposal to have the state take over funding and operating of district courts. The plan also now includes an incremental approach to the state takeover of county jails and natural resources districts, both of which are currently funded by local property taxpayers.
Under the new plan, NRDs would be fully funded by the state starting in the 2027-28 fiscal year, while county jails would have half their costs covered by the state in the 2026-27 fiscal year, remaining at the 50% split until lawmakers decide otherwise.
Before those changes, the plan would have cut Nebraska’s collective property tax bill by about $1.8 billion, replacing the locally collected tax revenue with $1.2 billion worth of existing property tax credits, $525 million in new sales taxes on previously untaxed goods and services, and increased “sin taxes,” which are projected to bring in another $170 million per year.
It’s unclear how much property tax relief the new plan will provide, Linehan said Monday. And it’s unclear if the plan will garner the support of enough senators to become law, a feat that would likely require 33 votes to overcome a filibuster in Nebraska’s single-house Legislature made up of 49 lawmakers.
“Getting to 33 is very, very hard,” Linehan said, adding: “I think we’re at about 31 right now. So I’m not sure.”
Linehan
Prior versions of the plan have long faced criticism, particularly from urban lawmakers who have blasted the crux of the plan as a “reverse Robinhood’ scheme over its partial reliance on increased sales tax revenues to fund tax relief that will provide the most benefit to the state’s largest landowners.
Dungan, the lone member of the Revenue Committee to vote against the plan’s advancement Monday, called it “problematic” and said it “hurts poor people, is regressive in its nature and it doesn’t do enough to provide property tax relief for people across the board.”
Dungan
Under the committee’s plan, Nebraskans would pay the state’s 5.5% sales tax rate on previously untaxed goods and services, including lawn care and landscaping, dry cleaning, taxis and transportation, soda and candy, movers and storage facilities, nail and hair care, and marketing and public relations services.
The committee axed other new sales taxes that Gov. Jim Pillen had sought to enact under his tax plan, which called for the taxation of home and car repairs, zoo memberships, admissions to statewide sports events and accounting and tax preparation services.
In an effort to appease critics, the committee’s plan calls for the elimination of sales taxes on residential electric bills and a doubling of the earned income tax credit — which helps subsidize low-income working families by providing tax credits equal to a portion of their earnings — from 10% to 20%.
But Dungan said Monday those moves don’t go far enough.
“At the end of the day, the people who are most harmed by these kind of regressive packages are people who are on the lower end of income earners and who are on a fixed income,” he said, later adding: “I have no idea how they get to their 33 votes.”
Linehan’s path to a filibuster-proof majority appeared nonexistent in the hours after her committee sent the tax plan to the floor Monday afternoon.
Though there are 33 conservatives in the formally nonpartisan Legislature, Sen. Julie Slama of Dunbar has been among the tax plan’s most vocal critics. And Sen. Ray Aguilar of Grand Island, also a Republican, remained opposed Monday, he said.
Raymond Aguilar
“I don’t think it’s fair to my constituents at all to have to put on their backs property tax relief for rich billionaires,” said Aguilar, who reported that no one from the Revenue Committee reached out to him over the weekend — as Linehan said she and her allies were in contact with 40 lawmakers.
Other critics have blasted the Revenue Committee for “refusing” to seriously consider proposals to legalize and tax recreational marijuana or online sports gambling as they weigh the elimination of sales tax exemptions to help fund property tax relief.
Facing questions Monday over her attempts to broker compromise with her urban opponents, Linehan put the blame on the opposition.
“I don’t know, guys, I kind of gave up when they didn’t want EITC,” she told reporters, referring to the increased earned income tax credit. “When they walked away, didn’t care if we gave EITC, don’t seem to care or if it’s important that we have people who are in apartments, or on fixed income, and we keep taxing their electricity.”
Free lunch at 15 more schools; Downtown parking study; Black Hills fixed-price option
Top Journal Star photos for August 2024
Tae’veon Coleman, 7, (left) waits to cast his line as the sun sets during a Community Lake day hosted by Big Gumdrop Outdoors at Oak Lake Park on Friday, Aug. 9, 2024, in Lincoln. Big Gumdrop Outdoors, is ,a nonprofit created by Elijah Riley, a Lincoln native and UNL student, to help kids connect with nature and play outside.
KENNETH FERRIERA Journal Star
Travis Ruel and Alanna White, 9, of Lincoln, interact with Patches, a 1-year-old Catahoula dog, through the glass of her kennel at the Pieloch Pet Adoption Center on Friday. Patches has been at the shelter since June 19. The Capital Humane Society is offering a “Full House” promotion where adoption fees for all dogs are reduced to $100 until Sunday because the shelter is nearly full.
KATY COWELL, Journal Star
Framed through the grate of a fire pit, Olivia Dagget-Keagle, 9, blows out the fire on her blackened marshmallow during a Community Lake day hosted by Big Gumdrop Outdoors at Oak Lake Park on Friday, Aug. 9, 2024, in Lincoln. Big Gumdrop Outdoors, is ,a nonprofit created by Elijah Riley, a Lincoln native and UNL student, to help kids connect with nature and play outside.
KENNETH FERRIERA Journal Star
A bicyclist rides along the Billy Wolff Trail near the Union Plaza Amphitheater on Wednesday. After 13 straight days of highs of 90 degrees or above, including 100 on Monday, a cool front brought relief to Lincoln, with a high of only 75 on Tuesday. Wednesday’s high, which reached into the upper 80s, will likely be the warmest for several days. The National Weather Service forecasts highs in the 70s to around 80 through the weekend, about 10 degrees below normal for this time of year.
KENNETH FERRIERA, Journal Star
Jordan Jones, 6, and her brother Sincere, 7, (from left) react while riding the Super Drop ride at the Heart of America Carnival during the Lancaster County Super Fair at the Sandhills Global Event Center on Saturday, Aug. 3, 2024, in Lincoln.
KENNETH FERRIERA Journal Star
Todd Heiser of Lincoln makes one of five trips of the day to drop off tree debris at a collection site at Holmes Lake Park on Monday. J.J. Yost, assistant director of Parks and Recreation, said the debris drop-off site at Holmes Lake has been one of the busiest — and it’s also one of the smallest. The city has brought equipment to all the drop-off sites to consolidate tree debris. At Holmes Lake, workers also used a grinder to further process debris. Yost said the city is encouraging residents to use other sites, which include Seng Park (south of the ballfields); Woods Park (south lot off of J Street); Oak Lake Park (main lot off of Charleston Street); and Hofeling Enterprises, 2200 South Folsom Court. City parks sites will accept debris until Aug. 19.
JUSTIN WAN, Journal Star
Nowear BMX’s Sam Bussell (top right) performs a trick on his bike during a performance at the Sandhills Global Event Center on Saturday.
KENNETH FERRIERA, Journal Star
Wilber native David Rogers, 10 (first right) holds his cousin William Mays, 3, as they dance during the 63rd annual Wilber Czech Festival held in Downtown Wilber on Saturday, Aug. 3, 2024.
KENNETH FERRIERA Journal Star
A wild horse jumps onto its back as it tries to throw off a rope held by Troy Graybill (from front) Chris Hajek, and Scott Graves as they try to saddle it during the wild horse race a during the final day of Nebraska’s Big Rodeo at the Garfield County Fairgrounds on Saturday, July 27, 2024, in Burwell.
KENNETH FERRIERA Journal Star
Nebraska Capitol groundskeepers Lexis Funk (left) and Heather Dinslage collect fallen tree branches Thursday in Lincoln.
JUSTIN WAN, Journal Star
JC Brager’s Sawyer Bokowski (left) fields a ball as Papillion-La Vista South’s Derek Geist runs to third base during the second inning of a National division Class A Legion baseball tournament game against on Saturday, July 27, 2024, at Den Hartog Field.
KATY COWELL Journal Star
Harry Tompkin, owner of Palace Glass Co., hands off a piece of stained glass to Kelly Mathes (from left) as they sort through inventory on Wednesday, July 31, 2024, in Lincoln. After 43 years of creating stained glass, Harry Tompkin plans to close his shop by September. Most of the remaining pieces are rejuvenation projects or those that were planned before his decision to close.
KENNETH FERRIERA Journal Star
Burwell’s Keelin Swett, 12, blows a bubble with her gum while waiting in the staging area behind the chutes during the final day of Nebraska’s Big Rodeo at the Garfield County Fairgrounds on Saturday, July 27, 2024, in Burwell.
KENNETH FERRIERA Journal Star
New teachers gather for the Lincoln Public Schools New Educator Kickoff on Monday at Southwest High School.
JUSTIN WAN, Journal Star
Bob Swanson uses a chainsaw to clean up large fallen branches after a storm pummeled the city Wednesday in Lincoln.
KENNETH FERRIERA, Journal Star
Quade Peterson of Litchfield is dragged underneath a wild horse while attempting to saddle it in the wild horse race competition during the final day of Nebraska’s Big Rodeo at the Garfield County Fairgrounds on Saturday, July 27, 2024, in Burwell.
KENNETH FERRIERA Journal Star
Akroyd Darkgrove, played by Shade Ingraham (left), has popcorn thrown at him by Jacob Parman, 7, of Fargo, North Dakota, during a performance of “Phantom of Darkgrove” at the Denman and Mary Mallory Kountze Memorial Theatre at Eugene T. Mahoney State Park in July. Audience interaction is a big part of what makes the melodramas at the park special, crew members said. The crowd is encouraged to respond vocally to musical cues throughout the play and throw popcorn at the villain.
KENNETH FERRIERA, Journal Star
Noah Wong, 7, unzips backpacks for the assembly line to place school supplies inside it during Spreetail’s annual Back(Pack) to School Event on Friday.
KATY COWELL, Journal Star
Nebraska Volleyball head coach John Cook poses for a photo in front of the chutes before the Grand Entry on the final day of Nebraska’s Big Rodeo at the Garfield County Fairgrounds on Saturday, July 27, 2024, in Burwell.
KENNETH FERRIERA, Journal Star
Matt Rhule (center) leads a group of participants inside to cool off during his “She’s Got Game” girls football camp on Saturday, July 27, 2024, at Memorial Stadium.
KATY COWELL Journal Star
Nazar Durzhynskyi, 9, focuses on keeping the ball off the ground using his racket while participating in a practice drill during a tennis camp held for Ukrainian children at Woods Tennis Center on Thursday.
KENNETH FERRIERA, Journal Star
Reach the writer at 402-473-7223 or awegley@journalstar.com. On Twitter @andrewwegley
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