LINCOLN — A coalition of mostly rural senators isn’t the only group pondering a statewide petition drive to lower taxes.
The Nebraska Chamber of Commerce and Industry and the Greater Omaha Chamber of Commerce are also considering a campaign to put a proposal on the state ballot in 2018.
Joseph Young, a vice president with the state chamber group, said the business groups believe that a constitutional amendment being formulated by freshman State Sen. Steve Erdman of Bayard to reduce property taxes could, if ultimately adopted by voters, significantly raise state sales and income taxes.
“Those two taxes (sales and income) are the ones that negatively impact our competitiveness,” Young said. “If they’re going to get that aggressive, we’re certainly not ruling out any options.”
The possibility of two competing tax cut proposals seeking a place on the 2018 ballot arose on the final day of the 2017 session of the Legislature.
The session ended without significant reductions in property taxes. That inspired Erdman, a rural senator from the Panhandle, to announce Monday that he’s seeking others upset with high property taxes to join with him to draft a solution.
Erdman said he would work with them to devise the details of such a plan, but its focus would be to restrict the amount of property taxes that entities such as school districts, counties and cities could collect. He emphasized that it would help farmers and ranchers, as well as residents of towns and cities.
“We’ve talked long enough. It’s time to do something,” Erdman said at a press conference Tuesday with nine other state senators, eight of whom are from rural areas.
Erdman said his proposal would be drafted by Jan. 1. It would be introduced as a proposed constitutional amendment in the Legislature, but if it didn’t advance there, he would launch a petition drive to put it on the 2018 general election ballot.
Sen. Curt Friesen of Henderson, one of the rural senators backing Erdman’s push, said that after this year’s failed attempt to address high property taxes on the floor of the Legislature, taking the issue to voters “might be the only solution there is.”
But while rural senators, as well as farm groups, have complained loudly about recent steep increases in property tax bills for farmers and ranchers, business groups such as the chambers have made reducing Nebraska’s relatively high income taxes their top priority. Income tax rates have hurt recruitment of new employees and cut into profits of small businesses, they say.
The main tax bill debated during the 2017 session was a proposal from Sen. Jim Smith of Papillion, incorporating ideas from Gov. Pete Ricketts, that attempted to cut income tax and provide reductions in taxes on agriculture land.
But Legislative Bill 461 was stalled by a filibuster, though Ricketts, in his session-end address to lawmakers, pledged to rework the bill and try again during the 2018 session.
Smith, who heads the Legislature’s powerful Revenue Committee, said Tuesday that he had not heard that the business groups are considering their own competing tax reduction drive, but he wasn’t surprised.
“I would say there’s a great deal of concern about (the Erdman push) by the business community about what unintended consequences there could be,” Smith said. “This is really serious business. We cannot have the tax burden shifted in this state to nonagricultural businesses. That is going to stifle growth.”
Young said the coalition of business groups, which includes the Lincoln Chamber of Commerce, has not arrived on the details of a tax reduction proposal and is in the discussion stage.
But it’s possible a pro-business petition drive that focuses on reductions in state income taxes could get the deep-pocketed support of the governor, whose campaign contributions last year helped elect several new state senators and helped approve a ballot initiative that restored the death penalty in Nebraska.
A governor’s spokesman said it was too early to comment on a proposal that hasn’t been finalized.
The Governor’s Office did not immediately respond to a request for comment Tuesday afternoon.
Ricketts, whose family owns the Chicago Cubs and TD Ameritrade, repeated again Tuesday, in his speech to state lawmakers, that Nebraska’s top income tax rate is higher than every neighboring state except Iowa. That makes the state uncompetitive, he said.
Erdman, at the press conference Tuesday, said he had not yet figured out how he would finance and manage a statewide petition drive. In recent years, such efforts have involved spending thousands of dollars to hire paid petition circulators and consultants who coordinate the effort.
But Erdman said he’s confident there are plenty of people, rural and urban, upset enough with high property taxes that they’ll join with him and form a plan that helps the most people.
“Where there’s a will, there’s a way,” he said.