LINCOLN, Neb. (AP) — Nebraska Gov. Pete Ricketts will push to reduce property taxes during this legislative session by limiting local government spending, and he warns the issue could go to voters if lawmakers don’t approve changes.
Ricketts said he’s hopeful lawmakers will take steps to slow local government spending, similar to a package he proposed last year that faced strong resistance from K-12 schools. Lawmakers ultimately approved a tax credit for property owners to offset some of their local property taxes but scrapped provisions that would have restricted school spending.
“It’s important that the Legislature acts on this or, as history demonstrates, the people of Nebraska will do it for them,” Ricketts said in an Associated Press interview.
Ricketts declined to say whether he would support a citizen-led ballot measure to restrict local spending, but the former TD Ameritrade executive has a history of bankrolling ballot campaigns with his own money.
In 2016, Ricketts spent $300,000 on a successful ballot measure that reinstated the death penalty after lawmakers voted to override his veto and abolish capital punishment. He also has donated extensively to conservative legislative candidates, including some who challenged more moderate Republicans who supported ending the death penalty.
Anti-tax activists and conservative lawmakers have tried property tax ballot campaigns before, but most of their efforts failed in part due to poor funding.
In the interview, Ricketts pointed to a 1966 constitutional amendment that voters approved to bar the state from collecting property taxes. Farmers and some homeowners have complained in recent years that their property tax bills have soared over the last decade, and they’ve pressured lawmakers and Ricketts to intervene.
“I believe if it were on the ballot, people would overwhelmingly support it,” Ricketts said.
Ricketts said lawmakers have made headway on property taxes, but “now what we need to do is slow the growth of government so that property tax relief actually ends up in people’s pockets.”
K-12 school officials argue they already spend conservatively, and some rural schools note they have lost state equalization aid because of Nebraska’s school-funding formula. The formula distributes money to schools based on their needs and what they can generate locally through property taxes. Farmers argue the arrangement is unfair because they own large amounts of land and must pay higher taxes on it regardless of whether they make a profit.
State senators have passed dozens of laws over the last decade to try to slow the growth of property taxes, but rates have continued to rise.
Sen. Lou Ann Linehan, chairwoman of the tax-focused Revenue Committee, said more of the burden is shifting to homeowners in Nebraska’s larger cities and pressure will build on urban lawmakers.
“People are going to get their property tax bills and see that they’re not going down,” she said. “We can’t keep this up.”
One state lawmaker who has worked on property tax ballot initiatives in the past said he’s confident voters across the state would approve a tax cut.
“Every time we polled people, it was their number one issue, whether they were 18 or 80 and whether they lived in Scottsbluff or Omaha,” said Sen. Steve Erdman, of Bayard, .
Erdman has introduced a constitutional amendment this year that would replace most of the state’s taxes with a single “consumption tax,” based on purchases, with tax credits for low-income residents who would be disproportionately affected. The proposal has eight cosponsors, but it still faces long odds in the Legislature.
Ricketts also said he’ll propose additional money for Nebraska’s prison system and a new, two-year state budget with a focus on controlling expenses. The state corrections department is seeking $230 million from lawmakers to build a new state prison.
He said he’ll also be watching the Legislature’s redistricting efforts this year, a once-a-decade ritual that’s usually partisan and contentious.
He said he wants to ensure that “all Nebraskans, both urban and rural, are treated fairly” in the process, but declined to give specifics. Western Nebraska is expected to lose at least one legislative district because of population shifts from rural areas to Omaha and Lincoln.
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