The state of Nebraska is currently facing a significant debate over a bill that aims to reduce property taxes in the state. Governor Jim Pillen has called for a 40 percent reduction in property taxes, leading to the introduction of Legislative Bill 388 earlier this year. The bill passed 28-14 after a debate on increasing other taxes to offset the reduction in property taxes. Nebraska currently has one of the highest average property tax rates in the U.S., with rates sometimes exceeding 2 percent in the largest counties. The wider bill makes changes to taxation on various goods such as cigarettes, soda, hemp products, and lottery tickets, among others, to fund the property tax decrease.
Initially, Pillen proposed a 2-cent increase in the state sales tax rate along with taxes on various goods and services to achieve the 40 percent reduction goal. However, the bill has since been amended to include a reduced 1-cent sales tax hike and a shorter list of goods and services subject to it. This change came after heavy lobbying against the proposed tax increases by various groups such as business organizations and anti-tax advocacy groups. The amendments to the bill mean that Nebraska’s property tax would be reduced by 22 percent if enacted in its current form, with the bill advancing to its final reading and a vote scheduled for April 18—the last day of Nebraska’s legislative session.
Despite the amendments, Governor Pillen remains committed to reaching the 40 percent property tax cut goal. Speaker of the Legislature John Arch has noted the struggle to identify the revenue source necessary for the property tax relief to be implemented successfully. Some lawmakers have proposed delaying the bill to create a more thoughtful approach during a special session in the summer instead of rushing forward. However, Pillen is determined to address the issue, citing the excessive burden of property taxes on Nebraska residents and the need for transformational property tax reform to bring down the annual property tax collection to around $3 billion.
Pillen stated that the current property tax structure in Nebraska is taxing lifelong residents out of their homes, making it unacceptable and emphasizing the importance of providing an opportunity for Nebraskans to retire in the state. His commitment to reaching the 40 percent reduction goal reflects his dedication to addressing the issue of high property taxes and creating a more favorable environment for residents. The bill’s fate remains uncertain as the debate continues, with the possibility of a special session in the summer to further discuss the best approach to implementing property tax relief in Nebraska.
