Nebraska’s governor says he’ll call lawmakers back to address tax relief
OMAHA, Neb.- Nebraska Governor Jim Pillen threatened from the start of this year’s legislative session that he would recall lawmakers for a special session if they failed to pass a bill to significantly alleviate rising property taxes. On the final day of the 60-day session Thursday, some lawmakers who helped torpedo an already anemic tax-shift bill said they would welcome Pillen’s special session.
“We are not going to pass this bill today,” said Omaha Sen. Megan Hunt, the only independent in Nebraska’s unique, officially nonpartisan, unicameral Legislature. “The time we resolve this will be in a special session where we start all over again.”
Pillen continued in his address to lawmakers just hours before they adjourned without voting on the property tax bill he backed. He said he planned to issue a proclamation for a special session.
“I will convene as many sessions as necessary to complete the long-overdue work of solving our property tax crisis,” he said.
Nebraska law requires that a special session be no shorter than seven days and that the actions contemplated be limited to those items outlined in the governor’s proclamation. Pillen has said in recent weeks that he would also consider a special session to change the way Nebraska allocates Electoral College votes to a winner-take-all system. Currently, Nebraska apportions its presidential elections based on the popular vote within its three congressional districts. Maine is the only other state that has split its electoral votes.
Republicans want the switch to happen ahead of this year’s hotly contested presidential election to ensure that an electoral vote tied to Nebraska’s Omaha-based 2nd Congressional District does not go to President Joe Biden, as it did in 2020.
Pillen has said he will include the winner-take-all issue in a special session call if there are enough votes to advance beyond a filibuster, which requires 33 votes. Although Republicans currently hold 33 seats, not all are willing to abolish Nebraska’s split system, so Pillen remains focused on passing a property tax cut.
He had supported a bill that initially aimed to increase the state’s sales tax to 6.5%, which would have been one of the highest in the country. It also expanded the sales tax base to include items like candy, soda, pet care, veterinary services and digital advertising, and added some limits on local government spending.
The measure successfully passed the first two rounds of debate, garnering just enough votes to overcome a filibuster. But by the time it reached the third and final round on the last day of the session, the sales tax increase had been eliminated, leaving only a fraction of the originally targeted property tax savings.
The bill was key to Pillen’s plan to reduce rising property taxes. Just days after the hearing, Pillen called for a 40% cut, which would save $2 billion on the $5.3 billion in property taxes collected in 2023. These property tax revenues are comparable to the $3.4 billion collected just 10 years earlier and far exceed collections. from sales and income taxes, which would raise approximately $2.3 billion and $3 billion, respectively, in 2023.
Rising home and land prices in recent years have led to skyrocketing property taxes for homeowners and farmers, but some homeowners have been hit especially hard because state law requires homes to be appraised at nearly 100% of market value, up from 75% . for agricultural land.
The sky-high costs mean that a new generation cannot afford home ownership, says Pillen. It’s also forcing some older residents on fixed incomes to leave homes they’ve already paid off because they can’t afford the ever-rising tax bill, he said.
But the series of proposed sales tax increases was enough to find opponents, both among Liberals, who complained that the tax burden was being placed too heavily on those least able to afford it, and among Conservatives, who called for more cuts related to new taxes.
Democratic Senator Danielle Conrad labeled the bill “one of the largest tax increases in Nebraska history,” drawing protest from the bill’s lead sponsor, Republican Senator Lou Ann Linehan, who defended it as a tax shift to a broader base of taxpayers.
“It’s easy to say, ‘No, no, no,’” she said. “So anyone who says we can do better, I hope you can submit those ideas to the Tax Commission by the end of June.”
If Pillen goes through with the special session, Nebraska will join several other states that have done so or are expected to do so later this year. On Wednesday, Virginia’s Republican governor, Glenn Youngkin, and the state’s General Assembly reached a budget deal that calls for a special session in May. On the same day, New Mexico’s Democratic governor announced a mid-summer special legislative session on public safety initiatives.
In Mississippi, Governor Tate Reeves in January convened two special sessions during the regular legislative session for lawmakers to consider incentives for economic development projects. And in Louisiana, the Republican-dominated Legislature passed a slew of tough-on-crime policies during a two-week special session in February, including expanding execution methods on death row, charging 17-year-olds as adults and abolishing of parole for most people. who will be imprisoned in the future.
Nebraska’s last special session took place in September 2021, when then-Gov. Pete Ricketts called on lawmakers to redraw the state’s political boundaries.