Ricketts calls legislative plan on property tax relief ‘out of touch’; crowd expected at hearing

Ricketts calls legislative plan on property tax relief ‘out of touch’; crowd expected at hearing
State Sen. Lou Ann Linehan, seated between two standing legislative pages, begins the Revenue Committee's hearing on its property tax relief measure on Wednesday. PAUL HAMMEL/THE WORLD-HERALD

LINCOLN — Gov. Pete Ricketts continued his offensive on Wednesday against legislative actions on property tax relief, calling a state legislative committee “tone deaf” to citizens’ cries for tax reductions.

“They’re completely out of touch,” Ricketts said at a midday press conference, just a couple of hours ahead of a public hearing on a legislative plan to reduce property taxes.

The governor was referring to a preliminary budget adopted Tuesday by the Legislature’s budget-writing Appropriations Committee, which voted to cut in half the $51 million Ricketts had proposed to add to the state’s property tax credit program.

The governor also used the press conference to again assail Legislative Bill 289, the Revenue Committee’s proposed property tax relief plan as “the biggest tax increase in state history.” He was joined by owners of a grocery store, a heating/air conditioning business, homebuilders, a rancher, an advocate for pets and the conservative group Americans for Prosperity.

They all spoke in opposition to the Legislature’s bill, which is the subject of a public hearing beginning at 4 p.m. on Wednesday. LB 289 would lower property taxes by raising state aid to K-12 schools by $540 million via a three-quarter cent hike in state sales taxes, new sales taxes on pop, candy and bottled water, and increases in taxes on cigarettes and home purchases. Tax exemptions on services provided by plumbers, movers and veterinarians also would be eliminated.

Ricketts, a conservative Republican, submitted his written testimony for the hearing on Tuesday, hammering LB 289 as a bad idea that has failed in the past. He cited efforts in 1990 and 1999 that raised state aid to K-12 schools but only temporarily lowered property taxes.

“LB 289 will be no different,” the governor wrote. “Nebraska may experience short-term reductions in property tax bills, (but) as history demonstrates … Nebraska will end up with higher property taxes and higher sales taxes.”

Ricketts said that past spending lids, like one proposed in LB 289, haven’t worked and were eventually watered down due to pressure from special interest groups. That, he said, is why he is proposing to place a 3% spending lid in the State Constitution, because that makes it harder to repeal or change.

A big question entering Wednesday’s hearing on LB 289 was if anyone would testify in support of it. Several groups, as well as those who stood with Ricketts on Wednesday, are preparing to oppose it.

School groups are expected to reject the spending lid included in the bill, and groups that advocate for the poor have already stated their opposition to the sales tax increase as a “regressive” step that hits low-income Nebraskans the hardest. The state’s municipalities say LB 289 will crimp their budgets. And veterinarians, real estate agents and grocers oppose the new taxes that would affect them.

The Open Sky Policy Institute on Wednesday outlined its opposition in a press release, saying there are “better options” than LB 289. The sales tax hike is regressive, the organization said, adding that repealing several sales tax exemptions would be a better idea.

Testimony Wednesday is expected to continue late into the night.

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