Straight Talk From Steve

April 18th was the final day of the 108th Legislature. This was the shorter 60-day session and, save for a special session of the Legislature later this summer, this completes my tenure as a Nebraska State Senator. It has been a pleasure for me to serve the good people of Legislative District 47 for the past eight years.

When I came into the Unicameral Legislature eight years ago my number one goal was to provide the people of Nebraska with meaningful and significant property tax relief. First, I tried to reform the way agricultural lands get valuated for tax purposes by introducing a couple of bills to change Nebraska over to a production-based system. However, due to Nebraska's varying rainfall and diverse soil and terrain, no capitalization rate could be found that would treat each part of the state fairly.

Then, a gentleman by the name of Rob Rohrbough came to visit me at the Capitol and introduced me to the idea of a consumption tax. After Sen. McDonnell of Omaha, Sen. Steve Halloran of Hastings, and I listened to Mr. Rohrbough explain the consumption tax idea to us for about an hour, we were immediately sold on the idea. Nebraska's tax system is broken. State Senators have been trying to fix our broken tax system ever since we created it back in 1967, but with no success. Ever since 1967 taxes have increased faster than the household incomes of Nebraskans and many Nebraskans are now beyond the breaking point.

Nebraska's property tax system is a complete failure. Consider for example that the median annual property taxes for a single-family home in Nebraska is one of the highest in the nation and is higher than all of our surrounding states: Nebraska's is $3,017, South Dakota's is $2,794, Iowa's is $2,512, Colorado's is $2,430, Wyoming's is $1,884 and Missouri's is only $1,623. As you can see, Nebraskans pay almost twice as much money in property taxes as people living in Missouri. As a result of these high property taxes, Nebraska ranks third in the Nation for the most farm bankruptcies and tenth in the nation among states that people are leaving.

This year's big property tax solution proposed by the Governor and approved by the Legislature's Revenue Committee was LB 388. The bill was pulled by the introducer last Thursday. The bill failed because it did not result in meaningful and significant property tax relief. Instead, the bill raised taxes on such things as veterinary care, storage unit fees, hemp products, tobacco products, lottery tickets, skill games, soda pop, and candy.

When I ran the numbers for LB 388 on properties in Legislative District 47, the results were not good. Contrary to the projected 22 percent in property tax relief that Lee Will reported to the Nebraska Examiner, folks living in Legislative District 47 would have only received a two to three percent reduction in their property taxes. For these reasons, I voted against LB 388.

Because LB 388 failed last week, the Governor will most assuredly call the Senators back to Lincoln later this summer for a special session of the Legislature in order to address Nebraska's ever-growing property tax problem. However, if the Governor and the chair of the Legislature's Revenue Committee continue to write bills with these same failed tax shift policies, the results won't be good for Nebraskans.

Nebraska needs a new tax system. As Sen. Brian Hardin of Gering said on the floor of the Legislature last Thursday, "Trying to fix our current tax system is like holding a beach ball under water." The ball will eventually come back up and so will your taxes. Nebraska must abandon its current tax system and start over with something different and something that works. The best answer to Nebraska's tax problems remains the EPIC Option Consumption Tax.