Senators debate shared accommodations; gird for tax battles

Nebraska lawmakers debated a proposal Thursday aimed at heading off regulations on shared accommodation services like Airbnb. And they prepared for fights on a series of tax proposals next week.

Sen. Tyson Larson introduced LB628, which would say local governments could not prohibit people from renting their property for short periods of time – no more than 30 days.

Larson said last year, 22,000 people visited Nebraska using short term rental services like Airbnb, generating $2.5 million in revenue for property owners. But he said around the country, cities are beginning to penalize people for using their property that way. And he said he wants to head that off in Nebraska. “LB628 is about the new market economy, the sharing economy, and helping everyday Nebraskans earn a little extra income while at the same time giving cities and counties the ability to regulate addressing, fire and building codes, sanitation, and other things,” Larson said.

Sens. Ernie Chambers and Carol Blood opposed the bill, saying it would facilitate sex trafficking. “The reason that these types of facilities are so interesting to sex traffickers is that they can go into a small community like Hastings, and stay there for a day or two, hop on Highway 6, go to the next community and go to the next community,” Blood said. “And that’s exactly what happens.

Larson said that was covered by his proposal. “The examples that Sen. Chambers has offered, and Sen. Blood, in terms of the sex trafficking and things like that, this bill directly says that cities can enact ordinances that expressly prohibit those,” he declared.

Sen. Burke Harr voiced another objection. “This bypasses our zoning requirements. And how is it different from any other hotel, motel, bed and breakfast? It’s how you book it. It’s not what you do on the property that differs. It’s how you book your room,” he said.

Harr also objected that the bill creates unfair competition by letting people rent their property without paying the occupation tax that hotels must pay, currently over 18 percent in Omaha. Larson said that could be fixed with an amendment.

The Legislature adjourned for the day without reaching a first round vote on the bill.

When lawmakers resume work Tuesday, they will confront a proposal by Sen. Mike Groene to funnel money from an existing property tax credit fund into increased school aid, and limit property taxes to no more than 55 percent of any school district’s budget. That would lower property taxes, especially in rural districts with high property values and low levies that don’t currently get state equalization aid. For urban districts, the proposal would lower the existing limit on how high property tax levies can be.

Groene said he’s gotten a mixed reaction. “Rural, unequalized districts like it. Urban districts, quite frankly the superintendents of schools don’t want to give up taxing authority, even though they tell the people publicly that it’s the state’s fault that property taxes are high, they like property taxes because it’s assured money,” Groene said. “You might lose your job or you might not be making any money on your business, but you have to pay your property taxes.”

Sen. Tom Briese has proposed an amendment to Groene’s bill that would move more money into the property tax credit fund by ending more certain tax exemptions, including sales tax exemptions on candy, pop, automobile repairs, cleaning, and home repair services.

Asked about critics who say that amounts to a tax increase, Briese disagreed. “I think it’s disingenuous to call this a tax increase, because all dollars raised by the inclusion of these services, by the elimination of these exemptions and exclusions, will be dedicated towards property tax relief. And so it’s not a tax increase. It’s rebalancing our funding structure in this state to create more equity and fairness for our taxpayers,” Briese said.

In addition to Groene’s bill and Briese’s amendment, lawmakers are scheduled to debate proposals backed by Gov. Pete Ricketts and the Revenue Committee to limit agriculture land valuations and cut income taxes later next week.