OMAHA, Neb. (AP) - A proposal to cap Nebraska property tax increases at 3% stalled in the Legislature Thursday amid fierce opposition from allies of local governments, who cast it as an attack on local control.
Supporters of the bill fell four votes short of the 33 needed to overcome a filibuster.
The measure would have applied to school districts, counties, community colleges and other local governments that collect property taxes. Local governments could have continued to collect extra tax revenue stemming from the natural rise in home values, and the measure would have expired in 2027.
Property taxes are a perennial issue in the Legislature even though they’re levied by local governments and not the state. Attempts to clamp down on local governments have failed, however, and lawmakers typically responded by using state money to reimburse property owners.
Sen. Tom Briese, the new bill’s sponsor, said Nebraska faces a “property tax crisis” that will come to a boil if lawmakers don’t act. Property taxes have risen sharply for farmers over the last decade because of soaring land values, and more recently, homeowners have seen large hikes as well.
“Someday that anger is going to manifest itself into something we don’t like, something the state can’t handle, probably a ballot measure,” said Briese, an Albion farmer.
Republican Gov. Pete Ricketts has made similar statements, saying that voters frustrated with property taxes are increasingly likely to launch a petition drive that would impose even tougher restrictions if lawmakers don’t act soon. One lawmaker, Sen. Steve Erdman, of Bayard, is pushing to replace all property taxes with a “consumption tax,” similar to a sales-and-use tax.
Sen. Mike Flood, of Norfolk, said local governments including community colleges collected millions in extra tax revenue for a decade, with increases as high as 23% per year.
“That’s obscene, it’s a problem, and no one has a solution for it,” he said.
But opponents said the bill would deny local governments the flexibility they need to fix roads, protect the public and build and maintain schools.
“When we talk about our constituencies, it’s the same constituencies that elected local elected officials,” said Sen. Adam Morfeld, of Lincoln. “It is important to allow local officials the tools to run governments.”
Sen. John Cavanaugh, of Omaha, said the young, educated people Nebraska is trying to attract are usually more concerned about child care costs and student loans than property taxes. Cavanaugh, 40, said the bigger draw for many young professionals is amenities such as restaurants and trails.
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