The following editorial first appeared in the Lincoln Journal Star.
State senators labored mightily this year to come up with meaningful property tax relief, especially for farmers who have seen taxes paid on farm land rise by more than 175 percent in the past decade.
Gov. Pete Ricketts put an innovative idea on the table. Senators invested countless hours. Researchers pored over figures; reports and statements were released. Rallies were held. Tensions rose between urban and rural senators.
And in the end?
It appears that all that labor will bring forth a mouse.
As the remaining hours in the session ticked away, a compromise allowed a property tax relief plan to advance that would boost property tax credits by $20 million next year. In combination with the $204 million already in the relief fund, a farmer now would get a reduction of about $120 for each $100,000 of valuation.
Sen. John Stinner of Gering called it “another small bite of that apple.” Sen. Dave Schnoor of Scribner called it a “Band-Aid, but something.”
This willingness to undergo such frustration only to settle for a modest property tax reduction, is mystifying.
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Everyone hates property taxes. Ask any candidate who has been on the campaign trail recently. Senators should consider a tax shift. The most obvious places to look for revenue are by raising the tax on cigarettes, and removing the sales tax exemption for pop and candy. The changes could be structured to be revenue neutral.
Senators had a cigarette tax hike on the table that could have accomplished much more, but the Revenue Committee snuffed it out like a cheap cigar.
Nebraska’s smokers currently have a bargain. The state’s tax on a pack of cigarettes ranks 39th in the country. LB1013 introduced by Sen. Mike Gloor would have raised the tax on Nebraska products by $1.50 pack, generating about $120 million.
Gloor proposed using $45 million of that for property tax relief. Arguably it could have been more.
Removing the sales tax exemption on for soda and candy – they are not food, after all – would generate another $10 million to $15 million a year.
Experts say the both moves would also have a positive impact on health. Tax increases have consistently led to decreases in the number of smokers, for example. Friends of Public Health, an advocacy organization, predicted that if Gloor’s bill had become law, 12,100 fewer young Nebraskans would have taken up the addictive habit and the number of adult smokers would have gone down by 12,300.
Senators who fought for property tax relief deserve appreciation for their efforts, and the $20 million in relief does represent movement in the right direction.
But to borrow a line from a country western song, those who battled for property tax relief could have done so much more if they hadn’t been looking for friends in all the wrong places.