LINCOLN — An initiative petition drive seeking a 35% rebate for property taxes paid is setting its sights on the state’s urban areas after gaining signatures in rural Nebraska.
The TRUE Nebraskans petition drive will open an office in west Omaha on Oct. 16 in its push to gather more than 120,000 signatures of registered voters by July 2 to qualify its proposal for the November 2020 ballot.
Officials with the group said they may have already met one of the two qualifications to obtain a spot on the ballot, which is to obtain signatures from at least 5% of the registered voters in 38 of Nebraska’s 93 counties. Now, the group is determining how many more are needed from the state’s most populous areas to meet the overall signature requirement.
“We’re taking it to the three big counties, which encompass about half the population,” said Ed Truemper, a pediatrician based in Ashland, referring to Douglas, Sarpy and Lancaster Counties. Truemper serves as a field director for the organization in eastern Nebraska.
The TRUE Nebraskans drive — which stands for “Tax Relief Unites Everyone” — was launched in May after the Nebraska Legislature couldn’t pass a bill to provide substantial property tax relief.
The group’s initiative proposes giving all property owners a state income tax credit equal to 35% of their annual property tax bill. Backers, including former Omaha Mayor and U.S. Congressman Hal Daub, say it would force the Legislature to deal with high property and income taxes in the state.
“It’s not a perfect solution to go to the ballot box with an initiative, but this is a way of forcing the Legislature to do something,” said Daub, who recently ended a stint on the University of Nebraska Board of Regents.
He said Nebraska’s personal and corporate income tax rates are too high and make the state noncompetitive for new businesses and young people. The “35 Percent Solution” would lower those rates, as well as provide a property tax refund, he said.
“We’ve got to do something. We can’t just keep talking about it,” Daub said.
If the ballot initiative passed, it would blow a $1.5 billion hole in the state budget, representing about one-third of state government’s entire general fund.
Some state leaders have said it would cause chaos by either forcing steep increases in taxes or drastic cuts in state programs.
“If enacted, the ballot initiative would likely result in massive tax increases that would hurt job creation and working Nebraska families,” said Taylor Gage, a spokesman for Gov. Pete Ricketts.
“If it sounds too good to be true, it probably is,” said Renee Fry, executive director of OpenSky Policy Institute, a state policy think tank.
A $1.5 billion price tag is a “huge number” that would mean “catastrophic” cuts in services like roads, corrections, higher education and K-12 schools, she said, and could translate into higher local property taxes to offset the loss of state funds.
“It’s a terrible way to make policy,” she said, by forcing the Legislature to do something. Reducing property taxes is hard, and passing the initiative won’t make it easier, Fry said.
The Legislature’s Revenue Committee has been meeting almost weekly in recent weeks in hopes of developing a plan to shift about $500 million worth of the tax load off property taxes. The committee is looking at eliminating a slew of sales tax exemptions on services and products, such as junk food and haircuts, in hopes of lowering property taxes and possibly state sales taxes.
State Sen. Lou Ann Linehan of Elkhorn, who leads the Revenue Committee, said she understands the frustration, but the initiative “doesn’t get to the core problem and may exacerbate the problem.” She predicted that property taxes in Omaha could double if the initiative were adopted.
But State Sen. Steve Erdman of Bayard, a leader with TRUE Nebraskans, said state lawmakers have tried but failed to deliver on promises to reduce taxes and spending.
“I think people are starting to realize that nothing is going to happen” in the Legislature, Erdman said. “Every day, we’re getting people calling who want to be circulators and asking where to sign.”
He said the drive is close to meeting the qualification of gathering signatures of at least 5% of registered voters in 38 counties. Right now, the group is counting how many signatures it has in determining how close it is to a stated goal of gathering 60,000 signatures by the end of the year. Both Erdman and Truemper said last week that they did not know how many signatures had been gathered.
Erdman said TRUE Nebraskans did very well last month in gathering signatures at the Nebraska State Fair and Husker Harvest Days, both held in Grand Island. And, he said, he believes that Omaha-area property owners are just as upset as rural residents about high property taxes.
Truemper said he was “surprised” at how well he did collecting signatures at the recent Dundee Days celebration, adding, “it’s kind of the epicenter of liberals” in Omaha.
He estimated the group has between 250 and 300 volunteer petition circulators, and predicted that TRUE Nebraskans will eventually start hiring paid circulators — a step many political observers see as necessary to gather 120,000-plus signatures across the state.
“We have the start of the money to make that happen,” Truemper said.
TRUE Nebraskans officials said they expected donations to their initiative to pick up once they demonstrate that it has momentum. As of Sept. 25, the group had raised about $50,800, according to its state campaign spending report. That included $10,900 in donated social media and organizational work by an Omaha man.