NEBRASKA CITY – Gov. Pete Ricketts outlined a three-pronged strategy for property tax relief Tuesday.
1. Increase the Property Tax Credit Relief Fund by 23 percent, adding $51 million for a total $275 million.
2. Establish a floor so the fund can not go below $275 million
3. Amend the state Constitutional to limit the property tax growth to 3 percent per year.
Local governments are already under a levy cap of 45 cents and a growth lid of 3.5 percent, but the governor’s proposal would specifically limit growth of property tax.
Under the current lids, a city that has a drop in sales taxes, or a school that has a drop in state aid, could cover the lost revenue by raising property taxes by any amount below the 45 cent lid.
The governor said the only way to have sustainable tax relief is by controlling spending.
Ricketts: “One of the things we’ve tried in the past, or multiple things we’ve tried in the past to encourage that fiscal restraint have been, for example, levy caps or other sorts of ways on valuation to try and limit that amount of dollars. At the end of the day, people don’t pay their property taxes in levies, they don’t pay in valuations, they pay in dollars.
So, if we really want to get at the heart of this, what we’re going to do it limit the amount of dollars that local entities can bring in and that will help bring about that fiscal restraint.”
He said another tax proposal to cut taxes by 50 percent on military retirement benefits will encourage veterans to make Nebraska their home.
Ricketts: “One of the things we know about veterans is they continue to contribute to our state even after they retire … They can have a whole second career. Well, we don’t’ want those veterans leaving the state. We want them staying right here and contributing to our state.”
If the constitutional amendment passes the Legislature, it would go before voters on the 2020 ballot.