The World-Herald’s Statehouse reporters round up news highlights from the Legislature and state government into the Capitol Digest — a daily briefing for the political newshound with a busy schedule.

Property tax relief. One day after a property tax relief proposal fizzled on the launching pad, state lawmakers worked to rekindle the issue.

State Sen. Lou Ann Linehan of Elkhorn, the sponsor of Legislative Bill 289, said she’s trying to organize a “road show” across the state this weekend to rally support for the proposal, which would increase sales taxes by half a cent and repeal about 20 sales tax exemptions to pump an extra $500 million into state aid for K-12 education. That would offset what property taxes now finance, delivering an average 20% reduction in taxes paid for schools.

She also said she plans to reach out to the state’s largest school districts, such as Omaha, Millard and Lincoln, which all opposed the bill. Linehan said she was puzzled by their opposition. A lot of senators and interest groups made compromises in drafting LB 289, but the big schools seem unwilling to give an inch, she said.

“And we’re not asking them to give up anything,” Linehan said.

She also questioned what the big school districts will do if a referendum that calls for a 35% refund of property taxes qualifies for the 2020 ballot and is approved. “That will mean real budget cuts,” Linehan said.

The senator needs to show that at least 33 of the one-house Legislature’s 49 senators support LB 289 before it could return for debate. Support for the bill is probably less than 25, some legislative observers said Wednesday.

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Already, Omaha Sen. John McCollister is working on an alternative plan to LB 289 that would be more palatable to the large school districts, which are worried about the long-term fiscal sustainability of the Linehan bill.

Both he and Omaha Sen. Brett Lindstrom said that any property tax relief plan, if it is going to pass, must also gain the support of the 18 Democrats in the Legislature, which was clearly lacking during Tuesday’s debate on LB 289.

Henderson Sen. Curt Friesen called the debate “weird” because many senators did not speak and those who did were sometimes noncommittal on the proposal. That, he said, makes it hard to discern what changes, if any, are needed to push LB 289 back onto the legislative front burner.

On Wednesday, lawmakers restored the property tax credit fund to $275 million, by overturning a decision by the Appropriations Committee to use half of a $51 million increase proposed by Gov. Pete Ricketts for the state’s rainy day fund, rather than tax credits.

That was a bit of good news for tax relief, because it would raise the credits by 23%. Farmers now get about $104 in credits for every $100,000 of property valuation; homeowners now get $86 on a $100,000 home. Senators interviewed said they were not giving up yet.

“I still think we have a 50-50 chance of getting something done,” Friesen said.

Governor off to Vietnam and Japan. Gov. Ricketts announced Wednesday that he’ll lead a trade mission to Vietnam and Japan in September.

“Vietnam is one of the fastest growing economies in the world,” Ricketts said. “It represents a tremendous opportunity to increase our state’s agricultural exports.”

Japan is a longtime trading partner, but exports to Vietnam increased 57.8% from 2017 to 2018, to about $4 billion. Beef exports alone were $12.3 million in 2018, a growth of 127%.

Pay for judges. After a long debate, senators gave first-round approval to a 3% increase in judges’ salaries in each of the next two years. The increase was higher than the 2.5% provided to other state employees. Omaha Sen. Steve Lathrop said the higher figure was, in part, payback for judges taking only 1% and 1.5% salary increases in recent years.

Capitol Digest reporters photo xcapitoldigest capitoldigest

From left, World-Herald legislative reporters Martha Stoddard, Paul Hammel and Aaron Hegarty.

Reporter - Regional/state issues

Paul covers state government and affiliated issues. He specializes in tax and transportation issues, following the governor and the state prison system. Follow him on Twitter @PaulHammelOWH. Phone: 402-473-9584.

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