As they work to determine the best way to bring property-tax relief to Nebraskans, state lawmakers are debating a bill this week backed by Governor Pete Ricketts. Legislative Bill 947 would create a refundable tax credit for agricultural and homeowner property taxes that would grow over time, and reduces the top corporate income tax rate about one percentage point over five years. While the measure outlines some property-tax relief, critics say it is nominal for residential property owners and does little to help agricultural landowners now. Jordan Rasmussen with the Center for Rural Affairs contends it misses the mark. “Really, what it offers up is an income-tax cut for our corporations here in the state as opposed to bringing tax relief to our everyday Nebraskans. Moreover, it will create a significant shortfall and gap in the state’s budget over the years that it goes into place.”
The governor says L-B 947 is a reasonable approach to tax relief. Rasmussen argues it does not address low state support for K-12 education, which has increased the need to rely on property taxes. Other opponents point out there are lingering questions over how the plan would be funded.
L-B 947 would cost the state nearly 650 million dollars when fully implemented. And Rasmussen explains it would take dollars out of the cash reserve fund. “Those are our rainy-day funds for when something truly problematic comes up, and this is not the instance to be making use of that. It’s just very unsound policy that’s being brought forward.”
The Center for Rural Affairs is among groups supporting the principles outlined in L-B 1084. Rasmussen explains they would modernize the tax code by striking the balance needed between property, sales and income taxes.”Rural Nebraskans, they are in need of property tax relief but they’re not asking to sidestep the responsibility to help fund schools and services that uphold their communities. These assets are important in rural Nebraska. They’re just simply asking for balance in the ways the state meets its obligations to pay for education.”
Agriculture and educational groups in the state helped draft L-B 1084, which expands the sales tax base, eliminates loopholes and keeps school spending growth at a minimum.