Legislature moves toward tax showdown; public power confidentiality advances

The Nebraska Legislature moved toward a showdown over property taxes, as a key group backed Gov. Pete Ricketts’ plan, while critics maintained it won’t do enough.

Speaking at a news conference flanked by representatives of business and farm groups, Gov. Pete Ricketts touted his tax plan Monday. “This bill delivers major property tax relief. Together with the property tax credit relief fund, this bill will deliver over $4.5 billion in property tax relief over the next 10 years, more than doubling the amount of property tax relief that is coming from the state this year,” Ricketts said.

The bill, LB947, would reduce agricultural property taxes by 2 percent next year and in stages after that, reaching 20 percent in 10 years. It would do the same for homeowners, starting with a 1 percent cut next year and reaching 20 percent by 2030. It would cut the top corporate tax rate from just under 8 to just under 7 percent. And it would spend $5 million a year on workforce development, such as subsidized training programs.

Steve Nelson of the Nebraska Farm Bureau said if the bill passes in its current form, that organization would stop pushing an initiative petition calling for a roughly 30 percent property tax cut next year. “Our preference is a legislative solution. LB947 is the right solution right now,” Nelson said. “From our perspective, not voting in support of LB947 is a vote against property tax relief.”

Later Monday, several other farm groups, including the Nebraska Farmers Union, came out against LB947.

The Farm Bureau's reasoning did not convince Sen. Steve Erdman, who is supporting the petition drive. “The average tax increase over the last 10-12 years has been 5.65 percent. You get a two percent reduction, but you get a five percent increase. Pretty good deal isn’t it?” Erdman said, sarcastically, of the governor’s plan. “This is smoke and mirrors,” he added.

Neither the Ricketts’ plan nor the initiative petition say how the state would deal with the loss of revenue it would otherwise have collected.

A competing plan, by Sen. Tom Briese, would raise income and cigarette taxes, among other measures, to fund property tax relief. Briese also criticized the governor’s plan for how long it would take to fully implement. “For those Nebraskans choking on red ink in agriculture due to the fifth-highest property taxes in the country; for those young urban homeowners forced out of the housing market or unable to make their house payment because of the 6^th to 7^th highest property tax relief in the country; tax relief delayed is tax relief denied,” Briese intoned.

Debate on the bill is expected to begin later this week.

Also Monday, lawmakers advanced a bill that would let public power districts keep certain information on their business operations confidential.

Sen. Justin Wayne objected to the proposal. “We need to have a serious conversation about generation costs; what the ratepayers – i.e. our taxpayers have to pay for that cost; how much debt is included in that cost; and underneath the proposed language…we will not have access to that information,” Wayne complained.

Sen. Dan Hughes, sponsor of the confidentiality provision, said enough information is already made public. Hughes cited the Nebraska Public Power District, the state’s largest utility. “They put an annual report out. There’s 64 pages of information here. Does it give you specific cost of production for each facility? No. That’s not information that the average ratepayer needs, nor, I believe, desires,” Hughes said. “If the board of directors felt the need, if they felt the cry from enough of their ratepayers, they could make that public. But as a business decision in a competitive market, that’s undercutting their authority. That’s not good business.”

Lawmakers rejected an amendment by Sen. Tom Brewer, based on some of his constituents’ frustration with a transmission line and wind farms proposed for the Sandhills, which would have delayed construction until after counties adopted zoning regulations. They then advanced the bill on a vote of 42-2.

And Sen. John Stinner, chairman of the Appropriations Committee, linked the ongoing discussion of the state budget with an announcement Friday that the Department of Health and Human Services had petitioned to put nearly three dozen nursing homes and assisted living facilities into receivership. “An estimated 2,000 patients are affected by this. Sixteen hundred and seventy eight employees went without pay for two to three weeks. DHHS …did a great job, but the other fact of the matter is that there is no money in DHHS,” Stinner said.

Stinner argued the state’s actions in holding down payments to nursing homes contributed to the facilities’ financial difficulties.