Agriculture and education representatives on Thursday lined up in support of Sen. Tom Briese's comprehensive property tax reduction and school finance proposal while business spokespersons attacked its proposed funding mechanisms.
The bill (LB1084) would increase the state's sales tax rate by one-half percent while boosting state cigarette taxes by a dollar a pack.
The measure would wipe out more than two dozen sales tax exemptions, including those applied to the purchase of candy and soda pop, apply a surtax to the state's highest-income earners, eliminate a designated capital gains exclusion and make other changes in tax law.
Briese's multi-faceted plan comes loaded with an array of moving parts that are designed to provide substantial property tax relief while protecting funding for public schools, which rely heavily on local property taxes now, with increased state aid.
It's the result of a collaborative effort, the Albion senator told the Legislature's Revenue Committee, and is subject to "further give and take."
Briese's proposal was endorsed by the Nebraska Ag Leaders Working Group, representing the state's major farm and commodity organizations, including the 61,000-member Nebraska Farm Bureau Federation, and supported by the Nebraska State Education Association, which represents 28,000 public school teachers and other education professionals.
"We cannot wait any longer" for property tax relief, Al Juhnke, executive director of the Nebraska Pork Producers Association, told the committee on behalf of the Ag Leaders.
The Ag Leaders group also earlier expressed support for a tax reform plan promoted by Gov. Pete Ricketts and sponsored by Sen. Jim Smith of Papillion, chairman of the committee, after amendments were proposed to sharply increase property tax reductions. That bill (LB947) also would reduce personal and corporate income taxes.
The NSEA said it endorsed the Briese plan because of its provisions assuring replacement state revenue for school funding.
Tiffany Joekel, policy director for Open Sky Policy Institute, described Briese's bill as "the only fiscally responsible tax reform plan."
Business opponents said the bill would damage Nebraska retailers and businesses, drive capital out of the state and impede efforts to attract new businesses and investment to Nebraska.
The Greater Omaha Chamber of Commerce, the Lincoln Chamber of Commerce, the Nebraska Bankers Association, the Nebraska Retail Federation and the Lincoln Independent Business Association were among those that registered their opposition.
Coby Mach, speaking for LIBA, said the bill would increase sales taxes at a time when retailers already are facing competition from sales conducted online. Although Nebraska sales taxes are owed on those internet sales, they are not generally collected.
The Briese plan was fashioned as an alternative to the governor's tax proposal and the $1.1 billion property tax reduction bill (LB829) authored by Sen. Steve Erdman of Bayard.
Hanging over this year's legislative tax showdown is the specter of an initiative petition drive to place a billion dollar property tax reduction plan before the voters at the November general election.
Complicating the tax battle is the likelihood that any plan ultimately would need to garner the support of at least 33 of the Legislature's 49 members in order to escape being trapped by a filibuster.
The Nebraska Department of Revenue has estimated that the Briese bill would increase funding for the state's property tax credit fund by more than $400 million by fiscal 2019-20.
The bill is designed to "strike a balance between property tax relief and adequate funding for the schools," Briese said.
And it is structured to assure "immediate and sustainable relief" for property taxpayers, he said.
"The naysayers and special interests will pick this apart," Briese said before opponents lined up to voice their assessments.
"It's a once-in-a-generation opportunity," Dave Welsch, a Milford farmer and member of the Milford School Board, told the committee.