A look back at a busy week

A look back at a busy week

Last week was busy on the Nebraska tax and education policy front as OpenSky testified on issues such as funding for school construction, property tax reliance, income tax cuts, sales tax increases and the use of online sales tax revenue.

LB 595 would examine best ways to support school construction projects

On Tuesday, OpenSky testified in support of LB 595, which would create the Task Force on School Construction Assistance.

Presently, Nebraska provides relatively low state support for school construction projects, which puts more pressure on property taxes to fund needed infrastructure and facility improvements at our K-12 schools.

We support LB 595 because it will provide the Legislature an opportunity to consider the impact of school construction on the education of our students and on our reliance on property taxes to fund schools.

Wednesday hearings focused on major tax bills

On Wednesday, OpenSky testified in support of LB 280, a bill to reduce property tax reliance to fund K-12 while also protecting school funding, and in opposition to LB 357, which reduces income tax rates and increases the property tax credit by using transfers from the state’s rainy day fund.

OpenSky supports LB 280 because it is a comprehensive approach to facing Nebraska’s property tax and school funding challenges. The bill would help lower property taxes for all Nebraskans while ensuring school funding is protected for school districts. We were joined by a diverse group of Nebraskans in supporting this bill on Wednesday. To learn more about LB 280, see our FAQ page.

We opposed LB 357 because it would cause major damage to our state’s budget, school funding, and provide little benefit to low- and middle-income earners while conversely providing major tax cuts for the highest-income Nebraskans.

Bills to tax agricultural land at lower rate present revenue, equity concerns

On Thursday, OpenSky testified in opposition to LB 293 and LB 350, which would tax agricultural land at 65 percent of market value. Agricultural land is presently taxed at 75 percent of market value.

We opposed the bills because they would have a disparate impact on Nebraska taxpayers and would lead to revenue losses for schools, counties, community colleges and other local governments.

LB 200 would use internet sales tax revenue to reduce property tax reliance

On Friday, OpenSky testified in support of LB 200, which would direct new internet sales tax revenue, resulting from the potential passage of the federal Marketplace Fairness Act, into the state’s Property Tax Credit Fund.

We hope that Congress passes the Market Place Fairness Act because current law puts local stores at a competitive disadvantage with out-of-state online and catalog sellers who can’t be required to collect sales taxes unless they have some physical presence, like a warehouse, in Nebraska.

Furthermore, we support the use of online sales tax revenue to help lower our state’s reliance on property taxes. We would prefer to see a mechanism different from the Property Tax Credit program to provide more targeted and meaningful property tax reductions. But until a more targeted system is in place, we support putting this revenue in the program.

LB 256 would raise taxes on most Nebraskans

On Friday, we also opposed LB 256, which increases sales tax rates to put extra revenue in the Property Tax Credit Fund.

The measure would make our tax code more regressive and data from the Institute on Taxation and Economic Policy show the bill would increase taxes for the majority of Nebraskans. Most of the tax cuts under LB 256 would be reserved for residents with incomes in the top 5 percent.

Next week will be busy as well

Tax and school finance issues will again be forefront in the Legislature this week as lawmakers hold hearings on bills related to:

• Revenue volatility;
• Tax Increment Financing;
• Tax incentive review;
• Adjusting income tax rates to increase school aid and lower property taxes; and
• Transfers from the state’s cash reserve and General Fund into the Property Tax Credit program.

Also, this Friday the Nebraska Economic Forecasting Advisory Board will meet. The forecasting board provides revenue forecasts that are important in state budgetary discussions and decisions.