After waiting sometime with bated breath, Nebraska Governor Jim Pillen has unveiled some general information of his plan to significantly reduce property taxes across the state.
Circulating a 16-page property tax reform “playbook,” Pillen outlined the several pillars of his plan, promising to slash state property taxes by 50%, from about $5.3 billion to around $2.6 billion.
The bulk of these savings would hypothetically come from the state picking up the tab on public education costs. Under Pillen’s plan, the state would cover the cost of class instruction, and and local taxpayers will cover the cost of school buildings and physical assets. Three taxing programs being left in place would continue to yield about $497 million, leaving $2.6 billion to be covered by the State.
This reduction property tax levies from schools would be phased-in over the course of a few years.
Additionally, Pillen outlined possible new sources of state revenue through the elimination 114 existing sales-tax exemptions, claiming this would produce almost $1 billion in revenue for property tax relief. This broadening of the sales-tax would, “better balance Nebraska’s three-legged tax stool” comprised of corporate income taxes, sales and use taxes, and property taxes.
An increase on “sin taxes” is also within the plan, hiking state collections on the sales of cigarettes, candy, pop, vaping, spirits, keno gambling, games of skill, and consumable hemp. Pillen says this would generate over $200 million in property tax revenue when fully implemented.
Ultimately, this plan is the most detail we’ve received from Nebraska’s executive office regarding property tax relief, but could still be considered sparse and general.
Lawmakers are set to convene for a special legislative session one week from today, Thursday, July 25. This will be lawmakers first chance to dig into the specifics of Pillen’s plan.
“We’ll have bipartisan support, we won’t be scratching for 33 votes,” Pillen told reporters after his presentation.
Sales-tax exemptions on “food and medicine” appear to be safe from the chopping block, but Pillen said it will be up to lawmakers to finalize specific sales-tax exemption eliminations.
Pillen’s property tax cut playbook is available below.
