LINCOLN — Gov. Pete Ricketts got in an early punch Tuesday, jabbing a legislative proposal to reduce property taxes as “the largest tax increase in Nebraska’s history.”
He is the first in an expected long line of opponents of Legislative Bill 289, which is the subject of a public hearing at 4 p.m. Wednesday at the State Capitol.
The bill would lower property taxes by raising state aid to K-12 schools by $540 million via a three-quarter-cent hike in state sales taxes, new taxes on pop, candy and bottled water, and increases in taxes on cigarettes and home purchases. Tax exemptions on services provided by plumbers, movers and veterinarians would also be eliminated.
Ricketts, a conservative Republican, submitted his written testimony for the hearing a day early and continued hammering LB 289 as a bad idea that has failed in the past. He cited efforts in 1990 and 1999 that raised state aid to K-12 schools but only temporarily lowered property taxes.
“LB 289 will be no different,” the governor wrote. “Nebraska may experience short-term reductions in property tax bills, (but) as history demonstrates ... Nebraska will end up with higher property taxes and higher sales taxes.”
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School groups are expected to testify against the spending lid included in the bill, and groups that advocate for the poor have already stated their opposition to the sales tax hike as a “regressive” step that hits low-income Nebraskans the hardest. The state’s municipalities say LB 289 will crimp their budgets. And veterinarians, real estate agents and grocers oppose the new taxes that would affect them.
Testimony Wednesday is expected to continue late into the night.
Ricketts has his own plan to reduce property taxes: place a constitutional lid on spending of property tax proceeds of 3% a year, and increase the property tax credit program by $51 million.