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In the last days of the 106th Legislature, a Legislature interrupted by pandemic and strained by grueling battles between the chambers of commerce, agricultural, and public education interest, passed and Gov. Jim Pillen signed into law Legislative Bill 1107, the Nebraska Imagine Act which included the NEXT project, and the Nebraska Property Tax Incentive Act. As with all significant legislation, LB1107 was a compromise. A compromise hammered out in August of 2020 by Speaker Jim Sheer who put seven senators in a room, shut the door, and demanded that we figure it out.
No one was thrilled with the result. No one won. Some were even disappointed, especially Nebraska's accountants who complained incessantly for the following three years that the income tax credit for general fund school property taxes paid was too burdensome.
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For three years multiple requests were made to the Revenue Committee to "fix" LB 1107 by front loading the credit. By the time Pillen formed the first working group in 2023 to review the property tax crisis in Nebraska, the only thing on which everyone agreed was the need to front load the LB 1107 tax credit. "Everyone" included the chambers of commerce, agricultural interests, schools, cities, counties, the vast majority of elected officials from across the state, and especially Nebraska's accountants. The only two people in Nebraska who expressed any hesitation were Treasurer Tom Briese and myself. But, as one learns in public servic,e even when the lobby demands action and you yield there will be grievances, some real and some imagined. The criticisms voiced by Chris Chappelear in the Omaha World Herald ("Midlands Voices: On property taxes, 'Nebraskans deserve more than political maneuvers,'" Sept. 29) are among the imagined grievances.
During the Nebraska Legislature's Special Session in August multiple bills were introduced to front load the tax credit. Every piece of Legislation concerning tax policy that is introduced receives a Revenue Committee public hearing. Before the hearing is held, the Legislature's Fiscal Office prepares a fiscal note. Each legislative bill's fiscal note that "front loaded" the LB 1107 tax credit made clear that to pay for the front loading the income tax credit for property taxes paid would sunset at the end of 2024.
The Revenue Committee held 58 hearings during the 108th Special Session, no one, not the lobby, not the dozens of Nebraskans representing themselves, not a single state senator ever voiced any concern about sunsetting the income tax credit for property taxes paid. The suggestion now that we should have done both the front loading and the tax credit is absurd.
First, doing both would cost an additional $570 million. The Nebraska Legislature is not Congress; we must balance our books. Every revenue raiser introduced during the special session was lobbied against by the chambers of commerce, agriculture, and multiple other business interests. The idea that we could do both was never even discussed.
So regardless of the lobby's Monday morning quarterbacking or just the general pastime of constant complaining, which consumes too many in Lincoln, the Legislature did not engage in political maneuvers. The Legislature did exactly what was requested in a very public and open process.