August 16, 2024

2024 Special Session

Property Tax Plan Advances

The Nebraska Legislature began the first round of debate on LB 34 on Tuesday, which became the new vehicle for Governor Jim Pillen’s property tax plan. LB 34, introduced by Senator Tom Brewer (Gordon), was initially designed as a backup plan, which would freeze real property valuations through 2027. The bill was advanced from the Revenue Committee on a 6-1 vote with a committee amendment that contained the major portions of LB 1, including new taxes and the elimination of certain exemptions for over 60 products and services.

However, after several hours of debate, it became clear that it did not have the support to overcome the 33-vote threshold to invoke cloture and end debate. Senator Lou Ann Linehan (Elkhorn) brought forth AM 84, which significantly pared the bill down to the following provisions:

1. Adopt the Property Tax Growth Limitation Act to cap local government (counties, cities and villages) property tax requests by the greater of 0% or the State and Local Consumption Expenditures and Gross Investment rate. Execptions exist for real growth, personnel costs for public safety or public health, or by a vote of the people at a regularly scheduled election.
2. Adopt the School District Property Tax Relief Act to retool the existing property tax credits to provide payments directly to school districts in order to "frontload" the tax credits, rather than having to claim the credits on State income tax returns.

After eight hours of debate, the Legislature adopted AM 84 to LB 34 and advanced the bill from General File on a vote of 36-8.

The Legislature took up LB 34 again on the second round of Select File debate Thursday evening. Senators voted to adjourn after less than two hours of debate. Efforts were undertaken by supporters of a broader property tax plan to reinsert new sources of revenue via the elimination of sales tax exemptions and new taxes on products and services. However, time ran out and the bill was advanced with only minor amendments on a vote of 39-8 earlier this afternoon.

Additional funds will be needed to provide the property tax credits contained in LB 34, which will come from a General Fund transfer, and additional revenue and transfers through the Appropriations bills, LB2 and LB3, which will continue to be debated this evening (Friday).

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