Nebraska senators brainstorming ideas to ease property taxes

By GRANT SCHULTE

Associated Press

LINCOLN, Neb. (AP) - A special legislative committee is brainstorming ways to reduce property taxes in Nebraska, but the ideas are still broad and some senators voiced skepticism Wednesday that major changes are possible.

Several lawmakers said any large reforms will take several years to fully enact because of their impact on local and state budgets.

The ideas discussed included an increase in state aid to K-12 schools and a “freeze” in the taxes collected on property for education. But outside attorneys recruited by the Legislature to moderate the hearing stressed that none of the suggestions were firm.

Sen. Mike Gloor of Grand Island said he doubted lawmakers will be able to pass major reforms during the short, 60-day session that begins on Jan. 6, but he said lawmakers can still show progress.

“We have to do something that carries over several years, and likely several budget cycles,” said Gloor, chairman of the Revenue Committee.

Sen. Kate Sullivan of Cedar Rapids said she sees no “silver bullet” solution to lower property taxes while preserving the quality of the state’s K-12 schools. But lawmakers need to respond to constituents who are calling for lower taxes, she said.

None of the ideas so far have won resounding support, but the discussion was expected to continue Thursday.

Nebraska’s public schools rely heavily on property taxes, but rising agricultural land values have forced farmers and ranchers to pay an increasing share of the cost even when their incomes decline. At the same time, urban senators with fast-growing districts want to protect state aid for their schools.

Speaker of the Legislature Galen Hadley said lawmakers need to demonstrate to the public that they’ve already taken steps to address the concerns and will likely do more.

In May, lawmakers and Gov. Pete Ricketts approved $408 million for the state’s property tax credit fund in an effort to reduce what property owners have to pay. This year, the owner of a $150,000 home will receive a $141 tax credit.

“It’s a perception thing, and the perception is we’re not doing anything,” Hadley said.

Sen. Paul Schumacher of Columbus questioned whether it’s possible to substantially lower property taxes without other revenue sources or cutting services.

“There’s no wiggle room in the system (for a change) that’s meaningful to everybody,” said Sen. Paul Schumacher, of Columbus. “We could screw this up a lot easier than we could fix it.”

Nebraska’s school aid formula distributes money by calculating a school’s needs and subtracting what it can generate through local property taxes and a few other sources. The difference between a district’s needs and its local resources determines how much state “equalization” aid it receives.

The funding dispute revolves around larger districts with fast-growing student enrollment but slow-growing property values, and smaller districts with sluggish growth or shrinking numbers. The smaller districts often have an abundance of valuable land, but agriculture groups say farmers and ranchers are shouldering an unfairly large share of the costs.

The committee has scheduled a Nov. 12 public hearing to get feedback on its recommendations. Its first meetings are intended to generate ideas for possible legislation when the Legislature convenes in January.

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