Prospects for Property Tax Relief in Special Session

Episode Transcript

(00:00):
I wanted to talk to you aboutpossibilities, concepts, and what you know
of the governor's plan when the specialsession comes out comes around later this month
in the legislature, and he wantsto get severe property tax relief done.
And it's interesting to me, Iwonder what you think. It's interesting to

(00:20):
me that he waited, he didn'tcall it immediately. I think he kind
of waited and was talking to peoplebehind the scenes, and when he went
ahead to make the call, probablythinks he's got enough support to get something
done. Is that your view ofit. I'm not sure what the details
are about how many votes he has, but he certainly building momentum with these
town halls and rightly so calling thespecial session to address property taxes because we

(00:45):
have the seventh highest rates in thecountry. Got a little property tax relief
last year when we eliminated community collegetaxation. But we've got to get this
addressed. Yeah, well, salestaxes have to be a big piece of
this. The other thing that's relativelynew, I guess it's a week or
so old where he really started poundingthe idea of the state funding all of

(01:07):
our public education in Nebraska. That'scorrect, and not communities. That's correct.
In contrast to what was introduced inthe in the session in the spring,
where they would have subsidized local spendingon education. Now it sounds like
he would prefer and wants the stateto own the education funding and completely eliminate

(01:27):
the property taxing authority of public education, similar to what we did with community
colleges last year, but obviously ona much grander scale. Well, he
says that's what that's what the constitutioncalls for. And if that's true,
why wasn't how did we ever getaway from that? Well, the constitution
says that the state should provide educationfor kids, and so some some can

(01:49):
drive that conclusion. So, assumingyou want the state to own education,
as you mentioned, Gary, yougot to find the revenue sources. And
it looks like the number one revenuesource is going to be looking at eliminating
these else tax exemptions and carve outsthat we have in our sales tax system.
And he's using math to back himup. And you know the thing
that most people don't know about JimPillon and is he's a scientist. He's

(02:10):
not a farmer. He's a scientist. He just hasn't made a lot of
money in agriculture. But he's goingto go to a farmer and this is
what's happening in the town hall gym, and he's going to say, all
right, right now, you arepaying one hundred dollars an acre in property
taxes, right right, Okay,but he got that right, one hundred
bucks. Keep that number in mind. If I charge you two percent on
your inputs and your inputs are fortybucks an acre, that's what eight dollars.

(02:32):
Okay, Now, that's eight dollarsyou pay up front. But if
I lower your property taxes by sixtypercent, you just saved sixty dollars an
acre. Now, even farmers thathate taxes can add and subtract. And
this is the argument that he's making, and that is I'm going to ask
you to pay more upfront in someform of sales tax, but on the

(02:53):
back end you're going to get madevery whole. Now, your approach,
Jim, is we should have auniform tax code. We shouldn't be saying
it's two percent for you, fivepercent for you, seven percent for you.
Yeah, you can't discriminate. Andby having two tiers I would probably
disagree with how we apply that salestax and business inputs should be off the

(03:15):
table if you look at good taxpolicy, because that leads to higher prices
for consumers. If you take thosebusiness inputs off the table, they're still
over a billion dollars it's available outthere, and it sounds like he's going
to repurpose those eleven oh seven creditstoo, that that taxpayers across the state
aren't taking advantage of. And that'sone of the recommendations of Platts do as
well. Let's have a dollar fordollar tax relief with that money that's currently

(03:38):
available available for credits that's not beingutilized and taken advantage explaining eleven oh seven.
So eleven oh seven, you ifyou apply through your income tax when
you file your income tax return,you get an income tax credit for the
for a portion of the property taxesthat you pay for public education. So
people aren't doing that, not everybody, I mean people that do their our

(04:00):
own taxes probably aren't aware about todo it. No, and I think
it's only about sixty percent, andthere's well over billion dollars available. So
let's repurpose that money and get thatdollar for dollar credit. That's more transparent
for tax payers, no doubt.Well, so where are you top to
bottom on this or are you goingto wait until you see it? Yeah,
I don't have we don't have details. As long as it's properly funded

(04:23):
and you're not taxing business inputs,then I guess I would if I was
a policymaker, I'd be asking twodifferent questions. What does state oversight look
like for education funding? We can'thave budgets continue to increase because we all
know that taxes are a function ofhow we spend. And the second question
I would be asking, if Iwas a policymaker, how do you We're

(04:46):
going to have loss of local control, so what does that look like?
What does public engagement look like?When now education funding is going to be
handled by a state. How areschool district's going to apply for their budgets
every year? I'm reading the Pillans'sbudgets aren't going to go any aren't going
to decrease, But we can't haverunaway spending either, and we have to
have the public certainly engaged. SoI mean, we supported the elimination of

(05:11):
the community college taxation last year.That was actually our recommendation at Plot Institute.
So this is a much grander scale, but we got to make sure
it's properly funded and some of thesequestions get answered. Well, you also
have the education union leaning heavily onall of these guys. And I've seen
and you guys have two one senatorafter another and after they got in there.

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So I never had any idea howmuch power these lobbyists have. And
they don't like any part of this. No, no, they don't because
they want to see funding increase.They love it that there's property tax and
state money going and they want tosee more money going to education. So
now you're going to have the statecontrolling whether or not budgets increase, and

(05:55):
I don't think that that's going toplay well with them. Well, it
isn't. And some of the farmsenators in rural Nebraska have said from my
constituents, they say, any taxationon inputs, in other words, any
suspension of the exemptions is a nonstarter. Well, again, you know,
I think that that's a short sightedview when you look at the back

(06:15):
end savings on your property taxes,and I think if you explain it to
them, you know, people thatfarm are not dumb. Okay, they're
actually pretty smart, and they understandmath, and they understand prices and a
lot of stuff. So I thinkyou're going to be a little surprised at
how different they may sound after theyget the details. But I firmly believe
if you were to walk up anddown Dundee and knock on ten doors,

(06:41):
and you know, a wife ormother opens the door and you say,
you know, do you know wherethe money for your kids school comes from?
They'll say maybe. And then they'llsay, what if we told you
you're going to get the same amountof money plus a three percent increase every
year, but it's all coming fromthe state, and your property taxes is
going to go down forty five percent? Would you be okay with that?
You can talk on right, I'llbe okay with that. So they really

(07:02):
don't care where the money comes from. That comes from school board members and
superintendents. That doesn't come from people, I think outside of the state taking
over education. We also have tohandle and address the valuation increases, And
what I'd like to see is whatthey do in Texas. Evaluations go up
a certain amount, those levies haveto come down. So if the state's
going to take over public education funding. We still got the cities, the

(07:25):
counties, the nrds that are benefitingfrom the windfalls of these valuations, so
we have to make sure that weaddress those valuation increases. We have to
put hard caps so that they're notcollecting more than a reasonable percentage every year
in property tax collections without the voteof the people. One more question,
Jim Vocal, when you say no, you don't support any and reduce it

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or getting rid of exemptions for businessinputs, what do you call it business?
You're talking farmers, ranchers, manufacturers, farmers. Any business has certain
expenses that through the cycle of thatproduct or service, So you do you
would include agriculture in that, andthat's a ton of money. It is

(08:09):
a ton of money. But likeI said before, Gary, I still
think that there's a billion dollars ormore out there. If you don't tax
business. Are you talking to theadministration? We certainly, yeah, we're
certainly have have provided our roadmap.We did last last week released a series
of policy reforms for property taxes,and we look forward to engaging not only

(08:33):
with the governor's team, but withthe Senators as we approach the special session.
Great always good to be on Jimhere. Thanks Jim bacle Platt Institute