The governor’s tax plan, LB 947, should be recognized for its attempt to address Nebraska's property tax challenge. However, this plan does little to bring balance and sound tax policy change to the state’s tax system.
By giving permanence and prioritization to income tax cuts for our state’s highest earners and corporations, rural Nebraska’s property tax plight remains secondary, and leaves residents reeling from continued cuts to health care, education, and public services.
Rural residents have shared, often publicly, they would rather see an increase in income taxes to help offset the costs of property tax relief. They are desperate for property tax relief, but this desperation does not supersede the demand for pragmatism and wise investment in health care, schools, and services critical to communities. Failing to account for the significant and long-term budget gap, which this legislation stands to create, is not only irresponsible, but will fundamentally reshape rural Nebraska.
The state’s metaphorical three-legged tax stool is imbalanced, leaning heavily upon property tax. The proposed tax plan exacerbates this imbalance by reducing income tax revenues and issuing income tax credits guised as property tax relief. Structural reliance on property taxes to fund education and local governments will remain. Gaps are left in Nebraska’s budget for today and into the future.
LB 947 recognizes rural Nebraskans’ need for property tax relief. Yet, residents are not willing to carry the burden of an income tax cut for the state’s wealthiest residents, while foregoing access to health care and investments in public education and public safety which uphold their communities.
For real property tax relief, the legislature must bring forth and vote for legislation that not only addresses the actual property tax burden, but also identifies how the state will fulfill its obligations.
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