LINCOLN — Sen. Steve Erdman of Bayard, who is leading the charge for major property tax relief legislation, rejected Gov. Pete Ricketts' new tax reduction plan on Thursday, describing it as "fantasy" and "an illusion" in terms of providing meaningful property tax reduction.

Erdman said he will proceed with his own bill (LB829) that would sharply reduce property taxes next year, and he's prepared to take the issue to voters in November with an initiative proposal if the Legislature fails to act.

After a day of studying the governor's proposed tax reduction package, which has been revised to add a layer of increased attention to property tax relief, Erdman said: "I'm not all impressed with it."

"I don't think his proposal is enough and not soon enough," he said.

In terms of immediate, substantial property tax relief, Erdman said, "it does absolutely zero."

The revised gubernatorial plan, which will be sponsored by Revenue Committee Chairman Jim Smith of Papillion, was unveiled Wednesday in the governor's State of the State address to the Legislature.

The proposal would provide a first round of increased property tax reduction by restructuring the state's current property tax credit fund into a new refundable income tax credit available only to owner-occupied households in Nebraska and agricultural landowners and producers who live in the state.

Additional property tax relief would be pumped into the program in the future whenever state revenue exceeds revenue forecasts.

The governor's tax package also proposes personal and corporate income tax reductions.

The Erdman bill would provide an immediate $1.1 billion in property tax relief through state income tax credits and refunds equal to 50 percent of property taxes paid to local schools.

If that bill fails to win enactment in the Legislature, an initiative petition drive, which is about to be launched by Reform for Nebraska's Future, expects to gather sufficient signatures to place the issue on the November general election ballot for the voters to decide.

While the focus has been on the property tax load borne by agriculture and rural Nebraska, Erdman said urban homeowners are also beginning to express their support for his property tax relief plan.

Responding to concerns about the cost of providing the estimated $1.1 billion in property tax relief contained in his proposal, Erdman said: "My job is to bring this legislation forward, not to say how to pay for it. That's up to the Legislature."

Trent Fellers of Lincoln, executive director of Reform for Nebraska's Future, has said one possible source could be elimination of some of the $4 billion in state sales tax exemptions in place.

"We may have given away too many tax advantages," Erdman suggested, "while not taking care of the people who brought us to the dance."

It's also possible that "we can live with less (in state government) if we have to," he said, and make additional efforts to "streamline government."

The problem that needs to be addressed now is a property tax load that has become unbearable, he said.

"Let's fix it," he added.

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