FAIRBURY – A Nebraska legislative committee advanced its proposal to lower property taxes by raising other taxes, and boosting state aid to K-12 public schools, to full Legislature on Tuesday.
Members of the Revenue Committee continued debate Monday on their package, but they voted 6-0 to advance LB 289. Two senators on the committee abstained from that vote.
The package would reduce property taxes by an average of 20 percent, although the exact amount would vary throughout Nebraska.
Under LB 289, about $372 million in new tax revenue would be raised by increasing state sales taxes by ½ cent and repealing the sales tax exemptions on about 20 services, ranging from haircuts, lawn mowing, home repairs and veterinary services for pets.
New taxes would be imposed on bottled water, pop and candy, and the tobacco tax would increase by 36 cents a pack.
The bill also aims to boost state aid to K-12 schools by $500 million.
Sen. Tom Brandt of Plymouth, a freshman senator from LD 32, campaigned hard on both property tax relief and fairness in school funding. He says LB 289 will benefit the 13 rural schools in his district, like Fairbury, Thayer Central, Meridian and his alma mater Tri County.
“If you look at a district like Fairbury, it should help the property tax payers there significantly,” Brandt said. “But, I can’t tell you how it will affect every school district in LD 32, until I see what the exact numbers are.”
Brandt says the Legislature will know more specifics on LB 289 when the hard copy comes out early next week.
Whether the bill can get at least 33 votes from the 49 senators to fend off an expected filibuster, and overcome an almost guaranteed veto from Gov. Pete Ricketts, is uncertain.
Gov. Ricketts issued a statement Tuesday evening, saying he was “appalled” by the advancement of the bill, calling it the “largest tax increase in Nebraska’s history.”
“If the full Legislature approves LB 289, working Nebraskans will be footing the bill for nearly $600 million in new government spending,” Ricketts said. “Nebraska has tried this approach before, it has failed and it has resulted in record high property taxes. I urge senators to kill these tax hikes.”
Brandt says he supports LB 289, which was largely authored by Sen. Lou Ann Linehan of Elkhorn – chairwoman of the Revenue Committee.
“It is short-term pain for long-term gain,” Brandt said. “The businesses argue against (sales tax exemptions), but the reality is the cost of all these things are borne by the consumer at the end of the day. Some of the people on the Revenue Committee have said that Nebraska leads the nation in sales tax exemptions. If we get rid of the sales tax exemption on the Henry Doorly Zoo for example, it would bring an estimated $1.8 million.”
Brandt also weighed in on LB 472 – a bill that would impose a half-cent sales tax to pay off a more than $28 million legal debt to six people wrongfully convicted of murder in Gage County.
Senators voted 41-8 Tuesday to override the veto of Gov. Ricketts, who opposed the measure, because it would allow the tax without voter approval.
The bill, sponsored by Sen. Myron Dorn of Adams, will allow Gage County’s board of supervisors to impose the tax to pay the federal judgment awarded to the ‘Beatrice Six.’
The six were imprisoned for a 1985 murder in Beatrice, but were exonerated by DNA evidence in 2008. The county wasn’t properly insured at the time.
Brandt was one of the 41 senators who voted to override the governor’s veto.
“It’s tough to raise taxes on people,” he said, “but (Gage County) has no choice. The state of Nebraska was not coming in to help them out. If you have to pay the judgement, you have to spread it out over as many people as you can. So, that’s why I supported it.”
You can follow Tommy on Twitter @Tommy_NCN.