Nebraska lawmakers could debate yet-to-be-developed Frankenstein property tax plan soon

Six days into a special legislative session Gov. Jim Pillen called to address the state’s “property tax crisis,” Speaker of the Legislature John Arch of La Vista told colleagues to plan on debating the yet-to-be-developed package into the night next Thursday and Friday, as well as during a rare Saturday session.

Meanwhile, State Sen. Lou Ann Linehan of the Omaha area, the Revenue Committee chairwoman, expressed confidence that her committee will have a proposal ready on the speaker’s timeline, although it may differ from the governor’s initial plan.

“We’ll be able to come up with something that will provide significant property tax relief for Nebraskans and more funding for schools,” she said, but added: “I don’t know what it will be.”

Public hearings on the 81 bills and 24 proposed constitutional amendments introduced during the session are scheduled to end this Saturday. Arch said he plans to leave Monday, Tuesday and part of Wednesday available for the Revenue Committee and other committees to meet and decide what to advance to the full Legislature.

Dream. Brad von Gillern of Omaha, the Revenue Committee vice chairman, predicted the committee will end up “Frankenstein-ing” a package, taking the best parts from multiple bills and putting them together like the creature created by the fictional Dr. Frankenstein.

But Linehan said the process will work as it always does, with committee members sorting through the ideas presented and trying to figure out what is reasonable and doable. She said she has been listening carefully to all the bills offered so far and several senators said they introduced bills to offer options to the committee.

Among the ideas presented at hearings Thursday was Legislative Bill 34, from Sen. Tom Brewer of Gordon, which would freeze property valuations for four years at 2025 levels. Brewer said the bill could become a backup plan in case other plans failed, while putting pressure on lawmakers to agree on more significant reform before the freeze ends.

But Jon Cannon, executive director of the Nebraska Association of County Officials, said the proposal would not help with property tax bills because levies could still increase. He also said it would violate the Nebraska Constitution because properties would no longer be valued uniformly. New property owners would pay on updated valuations, while others would pay on valuations that had been frozen.

Dream. Kathleen Kauth of Omaha offered Legislative Resolution 6CA, a proposed constitutional amendment modeled after California’s Proposition 13. The measure would limit valuation increases to 2% on properties held by the same owner and only allow valuations to be reset to market levels when a property changes hands .

Shoe Sen. George Dungan of Lincoln questioned how the proposal would affect young people buying their first home. Those new buyers would end up paying more property taxes than neighbors whose valuation increases have been capped over the years.

Other bills would increase taxes on windmills and solar energy fields, vaping devices, gasoline and purchases of luxury items. Dream. Eliot Bostar of Lincoln offered a bill to increase the state’s earned income tax credit, which helps lower income families and was part of the property tax package advanced by the Revenue Committee during the regular session.

The majority of proposals during the special session went to the Revenue Committee. However, almost all other committees also have been hearing bills aimed at raising revenue, freeing up state funds to be used for property tax relief or at reducing the cost of local government to reduce the need for property taxes.

Pillen’s plan would create a new property tax credit aimed at offsetting school property taxes and paid for by expanding sales and other taxes to more than 100 goods and services. It also would cap property tax revenues for cities and counties.