Today, details about Sen. Jim Smith’s latest proposal were reveled in an Omaha World Herald story by Martha Stoddard. Instead of property tax reform, the proposal would actually increase property taxes in order to provide small income tax cuts for the wealthiest of Nebraskans.
Yes. You read that correctly. Nebraskans pay the seventh highest property taxes in the country, experienced an increase of 60 percent over the past decade and instead of providing property tax relief, as many of them have committed to, legislators now want to increase property taxes.
Reform for Nebraska’s Future has highlighted the issue of “property tax amnesia” among legislators. Many of them have advocated for property tax reform while on the campaign trail, but quickly kowtow to the special interests at the State Capitol once elected. This is just the latest example of politicians saying one thing during the campaign and doing something totally different once in office.
In fact, just a few weeks ago, Sen. Jim Smith said in a Twitter post that Nebraskans needed property tax reform. Fast forward to yesterday and amnesia set in yet again; or this was just a game of legislative deception. This proposal provides nothing to improve current tax policy in Nebraska, which means it fails to deliver the top priority that Nebraskans have for the current legislative session.
Under current policy, property taxes account for nearly 50 percent of all state and local revenues with income taxes accounting for a third and sales taxes, 19 percent. Looking at these figures, it doesn’t take a genius to realize how out of balance the three legs to the stool already are. This latest proposal would make them more unbalanced and gets us further away from the equitable policy needed to make the system more sustainable.
There are proposals that would help balance the system, but legislators have been quick to dismiss them. Two proposals introduced by Sen. Tom Briese would create more balance by closing sales tax exemptions and the other would broaden the sales tax base. In order to generate more balance, more state revenue from sales taxes must be generated to counterbalance the nearly 50 percent of state and local revenues currently funded by Nebraska homeowners and property owners.
Such a solution is unpalatable to some at the state legislature because they feel these proposals would increase taxes; however many of the positive solutions proposed are revenue neutral meaning they would not add a single additional penny in revenue.
With property tax bills increasing each and every year, doing nothing only increases property tax bills. Legislator’s inaction on this issue only ensures tax increases year after year.
Worthy solutions exist that would provide meaningful property tax reform. The proposal currently being pushed by Sen. Jim Smith is not one of them and in fact, would increase property taxes.