Debate Starts on Property Tax Relief Proposal

LINCOLN–(KFOR Aug. 13)–A bill carrying the property tax relief plan was front and center before Nebraska lawmakers on Tuesday, which would phase in levy limits on schools to 40 cents per $100 of valuation starting next year, 35 cents in 2026 and 30 cents after that, among other things.

The plan was approved by the Revenue Committee on Monday. It also have Natural Resource Districts fully funded by the state, beginning in the 2027-28 fiscal year.  County jails across Nebraska would have 50% of their costs reimbursed by the state during the fiscal year 2026-27.

Originally, the plan would have cut Nebraska’s property tax bill by about $1.8-billion, replacing locally collected tax revenue with $1.2-billion worth of existing property tax credits, $525-million in new sales taxes on goods and services that had been untaxed, while increasing what lawmakers call “sin taxes” that could rake in another $170-million a year.

Dunbar Senator Julie Slama is against the tax plan, calling the math behind the package flawed and the potential revenue it would generate “is not real.”

“Because we’re throwing billions in new state funding obligations for education into this plan, without numbers that work,” Slama said.

Lincoln Senator George Dungan also opposes the bill, because it will not benefit all property owners and people will pay more taxes on more things.

“We all agree that this is a problem,” Dungan said.  “But we do have principled objections to the way this plan has been structured.”

Elkhorn Sen. Brad von Gillern voiced his support for the plan, saying he’s “tired” of the senators he called obstructionists for opposing the bill.

“Nebraskans hear this, you will pay more in property taxes next year–if this body does not act,” von Gillern added.

The plan also eliminates the two percent increases for ag machinery and business equipment. Nebraskans would pay the state’s 5.5% sales tax rate on previously untaxed goods and services, including lawn care and landscaping,  transportation, pop and candy, movers and storage facilities, nail and hair care, and marketing services.