Nebraska Governor Jim Pillen outlined his plan to cut the state’s collective property tax bill in half, emphasizing the need for a “hard cap” on local governments’ spending and a state takeover of funding for public schools. By eliminating sales tax exemptions and increasing sin taxes, Pillen proposed generating $950 million in revenue for property tax relief. He suggested cutting state spending by $350 million and leaving it up to lawmakers to identify replacement revenue through the elimination of sales tax exemptions.
However, critical questions remain about how the state will come up with the remaining $1 billion needed to fulfill Pillen’s promise. The plan has faced opposition from lawmakers of both parties, with concerns about the financial feasibility and potential impacts on working Nebraskans. Pillen’s proposal includes reducing school districts’ taxing authority, generating annual savings of $500 million by 2026, and front-loading income tax credits for property owners to achieve $898 million in savings.
Some lawmakers have criticized the plan as a “reverse Robin Hood scheme,” while others have expressed skepticism about shifting the tax burden onto working and middle-class families. The proposed elimination of sales tax exemptions, including on manufacturing and agricultural equipment, has raised concerns about how it would impact various industries. Despite these challenges, Pillen has indicated support for the legalization of online sports betting as a potential source of revenue.
The governor’s plan comes ahead of a special legislative session focused on property tax reform, but concerns persist about the lack of support for Pillen’s proposal in the Legislature. Lawmakers from both parties are expected to continue debating the plan’s viability and potential impacts on Nebraska taxpayers.
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