Hearing 1

State Sen. Lou Ann Linehan, seated between two standing legislative pages, begins the Revenue Committee's hearing on its property tax relief measure on Wednesday.

LINCOLN — Local school leaders, city and county officials, and advocates for lower taxes lined up in force Wednesday to oppose a state legislative proposal to reduce property taxes via a major boost in state aid to K-12 schools.

Even major farm groups, which are screaming the loudest for property tax relief after seeing tax bills skyrocket in the past decade, could muster only a “neutral” stance on the proposal, Legislative Bill 289.

Have complaints about property tax proposal? Get in line behind these folks

“The situation is critical, and the time for property tax relief is now,” said Ken Herz, the president of the Nebraska Cattlemen. But the bill, he said, falls short by taking away a current state property tax credit and not generating enough tax relief.

“Revisit the issue, choke down your own prejudices and compromise,” suggested former State Sen. Al Davis of Hyannis, of the Independent Cattlemen of Nebraska.

Representatives of the state’s largest school districts were among the harshest critics of the bill, saying the increased state aid they would receive would not offset the loss in property tax revenue caused by the proposal.

“This bill creates great risk for our district and our children,” said Cheryl Logan, the superintendent of the Omaha Public Schools, the state’s largest district.

Andy Rikli, the superintendent of the Papillion-La Vista Community Schools, estimated that his district would see $3 million less in revenue to operate its growing district. A Lincoln Public Schools official projected a $4.5 million loss.

LB 289, which was primarily drafted by State Sens. Lou Ann Linehan of Elkhorn and Mike Groene of North Platte, would lower property taxes by raising state aid to K-12 schools by an estimated $575 million after two years. It would raise revenue via a three-quarter-cent hike in state sales taxes, new sales 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 also would be eliminated, and a tax on home purchases would rise by $1 per $1,000 of a home’s purchase price.

Linehan said the bill would address a complaint she’s heard for years — that Nebraska doesn’t provide enough state aid to K-12 schools. It would move the state from 47th in state support to 20th among all states.

“What we’re trying to do is treat everyone fairly,” she said of the state’s 244 school districts.

Only four of the more than 60 people who testified during a public hearing that extended until almost 11 Wednesday night were supportive of the measure.

“I’m sure farmers would like more property tax relief. At least this would sure help a lot,” said Art Nietfeld, who farms south of Wymore.

Only one school group testified in favor, the Nebraska Rural Community Schools Association, a group of smaller school districts, which have complained that they don’t receive enough state aid.

Gov. Pete Ricketts continued his offensive against LB 289 earlier Wednesday, calling a press conference to condemn the bill as “the biggest tax increase in state history.” He was joined at the press conference by owners of a grocery store, a heating/air conditioning business, homebuilders, a rancher, an advocate for pets and the conservative group Americans for Prosperity.

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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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