No more excuses on property taxes
January 4, 2019
Property tax relief promises to be front and center in the upcoming legislative session. And although the level of intensity on this issue varies from one senator to another, I am confident that each of my colleagues is genuinely interested in delivering the property tax relief Nebraskans so desperately need.
For many Nebraskans, relief cannot come soon enough. Agricultural bankruptcies in Nebraska are climbing to levels not seen in some time. Creighton University Professor Ernie Goss suggests part of the problem is the high property burden borne by Nebraska ag producers, noting that "(h)igh and rising property taxes are having major impacts on farmers." And in a state with an ag-based economy, as the farms fail, so does the rest of the state. Nebraskans need meaningful and substantial property tax relief, and they need it now.
What does effective relief look like? Overall, I believe the goal must be to generate new revenue, use those dollars to replace property taxes in a "revenue neutral" manner and implement a mechanism to ensure that effort actually yields property tax reductions.
But there are folks outside of the legislature who will try to stand in the way of meaningful and substantial property tax relief. In doing so, they will toss out some of the same old excuses. Let's take a look at some of their claims.
First, some opponents of property tax relief will try to dismiss Nebraskans' angst over property taxes as a "local" issue. But this claim ignores the fact that roughly 60 percent of property taxes go toward K-12 funding, and much of how we run public education is mandated at the state level. However, the state funds K-12 education at a lower percentage than 48 other states. And while most of our schools don't even get any equalization aid from the state, overall state aid to education has increased an average of less than 1 percent per year for the last three years. Our failure to properly fund schools at the state level amounts to a state-imposed property tax increase every year on hard working Nebraskans. So no, this is not a "local" issue.
Then, some of those same opponents will claim that raising new revenue to offset property taxes is a tax increase. That argument simply doesn't hold water. What I described above is revenue-neutral tax reform. In other words, every dollar of new revenue will be directed to lowering property taxes. Revenue-neutral tax reform is not a tax increase.
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Opponents of property tax relief will claim that it doesn't make sense to raise revenue to lower taxes. They will try to vilify revenue neutral tax reform as a "shift," as if "shift" is a four-letter word. But their argument misses the point entirely. Nebraskans deserve a fair and balanced tax structure. And with property tax collections exceeding state, local and motor-vehicle sales taxes by 70 percent and individual and corporate income taxes by 50 percent, we are nowhere close to a fair and balanced tax structure. Raising one form of revenue to offset another is classic tax reform, and it's the most effective way of delivering the fair and balanced tax structure Nebraskans deserve.
Another excuse is the claim that Nebraskans don't really support using other revenue to offset property taxes. Not true. I'd like to invite the opponents of property tax relief to join me at town halls next summer and talk to the same folks I talk to. Visits with everyday hard-working Nebraskans, along with statewide and district polls, confirm that Nebraskans support raising other forms of tax revenue to offset property taxes.
Success on this issue will require collaboration between senators, stakeholders and the governor. No one will get everything they want, and all must be willing to swallow hard and accept some aspects they deem less than desirable. The people of Nebraska deserve no less. The time for excuses is over. ❖
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