After one last bid to expand the scope of the Legislature's property tax relief package failed, Nebraska lawmakers sent the feeble plan to Gov. Jim Pillen's desk Tuesday morning, marking a disappointing climax of the special legislative session Pillen called last month to deliver "transformational" tax reform. Lawmakers voted 40-3 to send LB34 — the bill carrying the bulk of the Legislature's narrow property tax cut plan — to the governor on Tuesday after a small group of term-limited lawmakers made a last-ditch push to broaden the bill, which senators from across the political spectrum have repeatedly cast as lackluster.
If Pillen signs all four bills that make up the property tax cut package, the plan would cut various state budgets , place an inflationary cap on annual budget increases for cities and counties and pour $750 million into a property tax relief fund. Much of that relief, though, would be funded by front-loading an existing tax credit program that more than half of Nebraska's property taxpayers are already tapping, limiting the relief the plan will actually provide to many homeowners. The Legislature pivoted to the watered-down plan after the sweeping tax cut package championed by Pillen stalled last week in the face of fierce opposition from a bipartisan group of lawmakers over its reliance on increased sales tax revenue.
The impasse over how to fund property tax relief — conservatives broadly supported the repeal of numerous sales tax exemptions and hiked sin taxes, while progressives hoped for legalized online sports gambling and recreational marijuana, luxury taxes and a new income tax bracket — forced lawmakers to turn to the front-loaded income tax credits, the only revenue source the two camps could agree on. Lawmakers' decision to pivot to the scaled-down package , which multiple senators called "the very least we could do," was met with resistance from members of the Legislature's senior class , who have repeatedly pushed for the expansion of the tax package or for lawmakers to scrap the plan altogether and return to the drawing board. That push continued Tuesday as Sen.
Justin Wayne of Omaha moved to amend LB34 to eliminate sales taxes on household electric bills, hike taxes on alcohol and cigarettes, and repeal sales tax exemptions on services like dry cleaning, swimming pool cleaning and chartered flights. "It's important because the renter, the person on fixed income, are right now not getting any benefits from LB34," Wayne said Tuesday. "We're trying to create some balance.
" Sen. Justin Wayne of Omaha works at his desk on July 26 at the Capitol. Wayne led a filibuster on Thursday meant to torpedo a fail-safe tax plan in an effort to push the Legislature to come up with something more substantial.
"I just feel like we need to do more," he added. His latest push for an expanded tax package fell six votes shy Tuesday as lawmakers rejected his amendment on a 19-21 vote. Some defended LB34 even as they agreed with Wayne that it did not go as far as they hoped it would when Pillen recalled the Legislature to Lincoln last month for an abnormal special session focused on property tax reform.
"I'd like to see much more done in this session, and we had some great plans to do that, and they got resoundingly shot down. And that's, unfortunately, the way that things work in here," Sen. Brad von Gillern of Elkhorn said.
Sen. Brad von Gillern of Elkhorn speaks during debate on a property tax proposal during the special session of the Legislature at the Capitol on Aug. 13.
"But don't convince yourself that we're doing nothing here today," he added. "There are parts of LB34 that will have a lasting impact on property taxpayers in Nebraska." State Sen.
Julie Slama of Sterling speaks to the press in the hallway during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. State senators talk on the floor during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. State Sen.
Merv Riepe of Ralston, left, talks to State Sen. Teresa Ibach of Sumner, right, during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. An electronic button used to vote is on a senator’s desk during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024.
State senators talk during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. Members of the public stand in the rotunda after a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. Erin Feichtinger, of Omaha, paces the rotunda during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024.
State Sen. Mike Jacobson of North Platte, left, talks to State Sen. Lou Ann Linehan of the Omaha area, center, and State Sen.
Carolyn Bosn of Lincoln, right, during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. State Sen. John Fredrickson of Omaha, left, talks to State Sen.
Merv Riepe of Ralston, center right, during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. State Sen. Robert Clements of Elmwood, right, looks at his computer screen during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024.
State Sen. Teresa Ibach of Sumner, right, reacts during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. State Sen.
Danielle Conrad of Lincoln speaks to the press in the hallway after a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. State Sen. Beau Ballard of Lincoln, right, talks to State Sen.
Tony Vargas of Omaha, left, during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. State Sen. Robert Dover of Norfolk, right, talks to State Sen.
Teresa Ibach of Sumner, left, during a special session of the Legislature at the Nebraska State Capitol in Lincoln on Thursday, July 25, 2024. Reach the writer at 402-473-7223 or [email protected] .
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