Property tax deliberation ongoing
Committee examines relief
possibilities, Johann’s plan
By Brian Carlson
Staff writer
Upon taking office in January,
Gov. Mike Johanns made a direct
property-tax rebate a centerpiece of
his legislative agenda. The proposal
gathered dust in the Revenue
Committee for two months, but the
committee continues to look at ways
to provide property tax relief.
In recent years, the Legislature
has sought to reduce property taxes
and equalize school funding by
increasing the state’s share of educa
tion funding.
Under LB1114, passed in 1996,
the state capped school districts’
property tax levies at $1.10 per $100
evaluation, to be dropped to $1 in
2001.
This was followed by a $ 110 mil
lion infusion of state aid to schools in
1997 to compensate for schools’ lost
property tax revenues. For the first
time, the state was footing nearly half
the bill for public education in
Nebraska.
But Johanns sought a different
approach to property tax relief, argu
ing that the present course had not
provided property tax efficiently.
“Where I have to question, what I
can’t defend, is in the area of property
tax relief,” he told the Revenue
Committee in a February hearing.
In LB881, he proposed that the
state create a trust fund to be filled
with excess state revenues and
returned to taxpayers through direct
property-tax rebates, starting with an
11 percent rebate the first year.
Johanns also favored preserving the
$1.10 levy limit and continuing state
aid to schools.
But opponents said the plan pro
vided no guarantee of property tax
relief and was unsound economic
policy.
In the Revenue Committee’s hear
ing, the late Sen. Stan Schellpeper of
Stanton said the bill could actually
have an adverse effect on taxpayers.
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With the higher levy lid in place, citi
zens’ property tax bills would be
higher. Then, if a downturn in the
economy reduced state revenue, the
state might be unable to afford the
property tax rebates.
“People could get hit twice,” he
said.
Sen. Bo^» Wickersham of
Harrison, chairman of the Revenue
Committee and a staunch opponent
of LB881, expressed similar con
cerns. Echoing Schellpeper’s con
cerns about an economic downturn,
he said the plan was risky and possi
bly unsustainable.
“Why substitute an absolute cer
tainty of lower taxes for a good
chance taxes won’t be lower?” he
said.
But Johanns defended his plan,
saying it broke the link between state
aid to schools and property tax relief.
“I’m not saying we should repeal
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the (school financing) formula,” he
said. “I really do not believe LB881
abandons the efforts the Unicameral
has been putting into place.”
LB881 failed to gather the five
votes needed for the committee to
advance it, and the bill remained in
committee for most of the legislative
session.
After Schellpeper’s death, Sen.
I
Cap Dierks of Ewing was appointed
to the Revenue Committee. His vote
may be crucial in ongoing negotia
tions over LB881 and other property
tax relief proposals.
The committee is now looking at
a variety of other plans, including one
that would not provide rebates, but
rather smaller property tax credits
that would begin this year.
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