Lawmakers are sharply divided over a proposal that seeks to lower property taxes by increasing sales and cigarette taxes and boosting state aid for K-12 schools. LB 2-89 also proposes  removing several tax exemptions and requiring local governments to cut their tax levies by 20%.

Governor Pete Ricketts has been fighting against the bill, but the sponsor, Senator Lou Ann Linehan, says the governor is ignoring the required cut in local property taxes. “By law, they have to lower their levies. It will go down to 95 cents the first year, and then as state aid increases, it will keep going down,” said Linehan.

Ricketts opposes the bill because it would impose sales taxes on 20 services that are currently exempt, and sees it as a tax increase due to sales taxes going up.

Linehan says Ricketts is not giving the bill credit for cutting property taxes. “Assumptions came out that it’s a tax increase, it’s a significant property tax decrease,” stated Linehan.

Senator Tom Briese said the debate on property tax has gone on too long, “it is decision time for this body, we have to decide if we are standing with Nebraskans demanding property tax relief, or are we going to stand in the way.”

Omaha Senator Ernie Chambers was the first to oppose the bill saying the tax increase will hurt poor people within the state. “It’s all I can do to stand here and not pick this item up and slam it on the floor, I hear you all talking so casually when you’re doing things to hurt poor people,” said Chambers.

An amendment was introduced by Senator Dan Hughes of Venango, saying “it will reinstate the sales tax on admissions to zoos in Omaha, Lincoln, and Scottsbluff.”

Debate ended with no vote on Tuesday.

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