The not-so-special session of the Legislature ended on Tuesday, August 20. Senator Loren Lippincott of Central City described the mood of the session as follows: “Unfortunately, the greatest lack seems to be the political courage to do the right thing on behalf of the people.”
Senator Lippincott’s testimony described exactly what happened during the special session of the House, which ended without passage of any meaningful or significant property tax relief.
What the legislature passed was nothing particularly original or new. It took the legislature 17 days to pass a resolution I had introduced as an amendment to another bill back in April. The reason I introduced that amendment was to help those who were not claiming their property tax credit on their income tax return. In April, my amendment had received 23 votes, but it needed 25 votes to pass. Four months later, and after 17 days of the most disorganized and confusing session I have ever attended, we passed the same amendment with 40 votes.
I knew back in April that passing this amendment would not stop property tax increases. What the legislature passed during the special session through LB 34 amounts to nothing more than a slight reduction in the increase taxpayers will see on their future property tax returns.
While the change will help the 45% of property owners who did not file the necessary paperwork to obtain the property tax credit on their income tax return, the credit itself has already been available since the passage of LB 1107 in 2020 and therefore does not really count as property tax relief.
In addition to bringing forward the property tax credit, which has been available to taxpayers since 2020, LB 34 also established a cap on local government units. The cap applies to their budgets.
The cap limits increases to zero or the rate of inflation (whichever is higher), but the cap can be lifted if there is a threat to public safety or by a referendum in May in odd-numbered years.
Many people don’t understand how their property taxes fund the many obligations the state imposes on local governments. From time to time, the state legislature passes laws that force counties, cities, and schools to pay for things the state doesn’t.
These types of bills are called “unfunded mandates.” Unfunded mandates cost property owners hundreds of millions of dollars each year in the form of higher property taxes. Unfortunately, state senators often do not consider how these unfunded mandates will impact taxpayers when voting on the bill.
I was part of the task force the Governor selected earlier this year to work on property tax relief. This group met seven times in the early summer months. It was said that this committee almost unanimously approved the plan presented by the Governor. Nothing could be further from the truth.
There was never a vote, nor were the task force members ever asked if they agreed with the plan. There was no method for reaching any kind of consensus. What the governor presented was his own personal plan. He was advised not to call a special session until he had 33 votes to get his plan through the legislature. He ignored that advice and now has learned the hard way that there are three separate, co-equal branches of government.
The governor has the power to call a special session of the legislature, but he has no power to keep state senators in session.
Earlier this spring, the governor said he would continue to call special sessions even if it took until Christmas to get any significant property tax relief. Now he’s announcing that he won’t call the state’s senators back to the Capitol unless he has the votes to do so.
Governor Pillen has stated on several occasions that his goal is to reduce property taxes by 50%. The bill passed by the House only provides for a 3% reduction, and now he calls this a great first step. Ultimately, what the House passed simply amounts to a reduction in the increase.
Steve Erdman represents District 47 – west of Lincoln County – in the Nebraska Legislature. His district includes the city of Sidney.
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