Returning Balance to Nebraska Taxes

For decades, Nebraskans have heard that the real tax debate in this state should focus on sustainable, meaningful property tax reform. There seems to be a current consensus among citizens, Senators, and the new administration that the time has come to actually provide meaningful, sustainable property tax reform.
 
However, can Nebraska enact property tax reform while avoiding cuts to schools and other key services? Our local governments are among the most property tax dependent in the nation - only Illinois relies more on property taxes to fund schools. Nebraska is nearly 40 percent more reliant on property taxes for school funding than the national average.
 
Ideally, state revenue and spending come from a balanced mix of property, income and sales taxes – the three legged stool. But our tax system – our stool – is out of balance, leading to calls for property tax relief.
 
This year the Legislature has before it LB 280, sponsored by Senator Al Davis, which proposes to reduce property taxes for school funding only, expand resources for schools and reduce reliance on property taxes through a local income tax for schools, and increase state aid to schools in a method that is fair to all Nebraska schools.
 
The Center for Rural Affairs supports LB 280 because it is the only balanced, comprehensive tax plan before the Legislature, that recognizes that property taxes and school funding drive each other, and the only plan that proposes to significantly reform that connection.