Historic preservation, property tax relief and water projects highlighted discussion in the Nebraska Legislature Tuesday.
Sen. Jeremy Nordquist of Omaha is chief sponsor of a bill to give an income tax credit for preserving historic properties. The proposal would give a 20 percent tax credit for investments in projects approved by the state historic preservation office or by local ordinance, up to $1 million per project.
Nordquist said every neighboring state that has an income tax also has such a credit. And he said it would help boost the economy. “There’s great evidence of economic impact. So for every dollar invested in really the footprint of Nebraska – these are tangible investments that are cemented to our land here -- every dollar that’s invested will leverage at least four dollars of economic investment,” he declared.
Columbus Sen. Paul Schumacher objected to the proposal. Schumacher said there is no limit on the overall amount of tax credits that could be given out. And he questioned the purpose they would be used for. Schumacher promised extensive debate on the bill. “We will proceed throughout the course of the next hours to look at the bill in detail, to examine the exposure that the state is taking on, and to see whether or not this is the area that we want to spend literally tens of millions of dollars, perhaps more every year on – old dilapidated buildings, instead of things of the future,” Schumacher said.
The Legislature has not yet reached a first-round vote on the bill.
Tuesday afternoon, the Appropriations Committee heard testimony on proposals to use some of the state’s cash reserve to offset property taxes, and on bills to spend money on water projects. Sen. Beau McCoy of Omaha proposes to spend $85 million to add to an existing property tax credit program. Last year, that program reduced property taxes on a $100,000 home by about $66. At that rate, McCoy’s proposal would cut about another $49 from that tax bill.
Lincoln Sen. Kate Bolz asked McCoy why his proposal would give the tax cut to every property owner, rather than only to those whose taxes exceed a certain percentage of their income. “Why not do the work of creating a circuit-breaker program or another more targeted strategy to make sure that property tax relief gets to the ones who most need it?” she asked.
McCoy said everyone who pays property taxes, whether on a small or large amount of property, needs and deserves relief.
The committee also heard proposals by Omaha Sen. Pete Pirsch to use $230 million over two years for property tax relief. Renee Fry of the Open Sky Policy Institute opposed both McCoy and Pirsch’s bills on the grounds that they would dip too deeply into the state’s cash reserve. That reserve is projected to reach $725 million by the end of the fiscal year. But Fry said the state is unlikely to receive any federal stimulus funds in the next economic downturn, so the reserve funds will be needed.
Late Tuesday afternoon, the committee began hearing two water proposals. One, by Sen. Ken Schilz of Ogallala, would make a one-time appropriation of $50 million for water projects. The other, by Sen. Tom Carlson of Holdrege, calls for appropriating $50 million a year. Carlson said projects are needed across the state “The truth of the matter is if push comes to shove, municipalities and domestic wells will have priority number one, because of the importance of water to life,” Carlson said. “But to keep our economy healthy, we have to manage that water in such a way that agriculture has what it needs. Industry has what it needs. And everybody in the state has what they need,” he added.
Lawmakers are expected to weigh the needs for water projects and tax relief against other proposals, including funding prison reform, over the next two months before the Legislature adjourns for the year.
Correction: The audio version of this story contained an incorrect figure for how much Sen. Pirsch's proposal would direct toward property tax relief over the next two years. The correct figure is $230 million.