Latest news with #LegislativeBill170
Yahoo
20-05-2025
- Business
- Yahoo
Sales tax, tobacco tax push doom Nebraska's ‘One Big Beautiful Bill' for property tax relief
State Sen. Tom Brandt of Plymouth, at podium, with Gov. Jim Pillen and State Sen. Barry DeKay of Niobrara, from left. Brandt serves as chair of the Legislature's Natural Resources Committee. DeKay chairs the Agriculture Committee. May 7, 2025. (Zach Wendling/Nebraska Examiner) LINCOLN — Nebraska's version of 'One Big Beautiful Bill' for property tax relief went up in smoke Monday despite an effort to narrow new revenues to increased taxes on cigarettes and vapes. It becomes the third property tax package in the past year to propose and fail to garner traction to use new sales tax revenues to lower property taxes. It also deals a significant blow to Gov. Jim Pillen's pledge to keep property taxes flat this year as he eyes reelection. Legislative Bill 170, led by State Sen. Tom Brandt of Plymouth, failed 30-15. It needed 33 votes to overcome a filibuster from opponents across the political spectrum who opposed the tax 'shift. The proposal originally sought to add sales taxes to 20 currently exempt goods or services, including pop, dating services, chartered jets, swimming pool cleaning and maintenance services and pet grooming. It also sought to hike the taxes on cigarettes (up to $1.36) and vapes (up to 40%). The original package anticipated $110 million in new revenue, with $100 million directed to property tax credits to offset property taxes paid to local K-12 school districts. 'Property taxes remain one of the most painful burdens our residents face, impacting everyone from family farmers to first-time homeowners,' Brandt said. 'This legislation is a responsible, targeted effort to address the burden by broadening Nebraska's tax base.' However, as happened at the end of both the 2024 regular session and an 18-day special session Pillen called last summer, lawmakers ultimately rejected expanded sales taxes on several goods and services, which could have raised about $53 million, Brandt's estimates indicated. 'It's just rebranded or repackaged from the prior two failed attempts that this Legislature has not moved forward for a variety of different reasons, with strong support across a politically diverse coalition,' said State Sen. Danielle Conrad of Lincoln. Brandt sought to narrow LB 170 to a lower revenue target of $80 million for new property tax relief each year by striking any broadening of the sales tax base. Instead, he proposed to increase cigarette taxes to $1.64 per 20-pack, which he said would raise nearly $60 million each year, and to increase vape taxes to 40% wholesale, which he said would raise about $15 million. Both versions of LB 170 also included a proposal from Fremont State Sen. Dave Wordekemper to capture a 20% tax on cigars, cheroots and stogies purchased online, which senators estimated would raise $100,000 in revenue. That left roughly $5 million that would have needed to be made up later, such as by adding back a handful of expanded sales taxes to the package. State Sen. Jana Hughes of Seward, who has fought for increased taxes on vapes, said property tax relief is necessary for the grandmas or grandpas across Nebraska, as well as retirees and veterans, who are being priced out of their homes because of property taxes. Hughes, State Sen. Mike Jacobson of North Platte and a handful of other conservatives in the officially nonpartisan Legislature defended the shift to new sales tax revenue as targeting 'optional' goods or services. 'We are so dang lazy we can't even go to the McDonald's drive-through by ourselves to go pick up our food. We hire someone to pick it up, and that's a service, and we're not even talking about taxing that service,' Hughes said. A vote against LB 170, supporters said, was a vote against property tax relief. 'Don't tell me you're representing your constituents when you say you don't want to lower property taxes, because you aren't representing your constituents,' said State Sen. Mike Jacobson of North Platte. 'You're representing some ideology.' Much of the pushback to LB 170 was bipartisan, including from Republican State Sens. Brad von Gillern of the Elkhorn area, chair of the Legislature's Revenue Committee, and Stan Clouse of Kearney, who said the bill was not 'sustainable' relief. Clouse, a former longtime Kearney mayor, said the relief was 'not real' and was 'simply increasing revenue streams.' He suggested eliminating unfunded mandates was a better focus. Added von Gillern: 'This is putting dollars into the top of a bucket that has a hole in the bottom of it.' State Sen. Beau Ballard of Lincoln, a Pillen appointee, criticized LB 170 and its narrower components as a 'tax increase with no end in sight' that wasn't the right path forward, even as he identified property tax relief as a top priority for his district. Von Gillern and State Sen. Tanya Storer of Whitman said the increased revenue also wouldn't keep up with property tax growth, which was nearly $300 million in two of the past three years. The exception in annual increases that high was last fall, after the state took on the tab for property taxes previously levied by community colleges. The state budget passed last week included about $57 million in expanded property tax credits for next year, and about $11 million more for homestead exemptions. Even combined with the $80 million in Brandt's bill, property taxes would likely increase statewide next year. That stands in direct contrast to Pillen's pledge to hold property taxes flat. He has said that, without 'a shadow of a doubt,' he and allies would find additional property tax relief this year. Storer, a rancher in north-central Nebraska, said she was concerned that the continued reliance on property tax credits was 'feeding the demon' and taking away accountability from local taxing authorities. 'We still haven't pulled the right triggers,' Storer, a freshman lawmaker, said. Another path forward for property tax relief includes buying down property tax levies directly, an approach led by Hughes in a Pillen-backed LB 303, which also sought long-term changes to how the state funds K-12 schools. However, the provision to lower property taxes directly has since been stripped out of LB 303 to give time for senators to further study the approach before returning next January. On the Democratic side, State Sen. George Dungan of Lincoln, who has consistently opposed expanding the sales tax to exempted items without lowering the 5.5-cent statewide sales tax rate, said the latest package would pick 'winners and losers.' Dungan criticized repeated efforts for a 'grand slam swing' at tax policy when expansive adjustments need more time to be effective. State Sens. Ashlei Spivey and Terrell McKinney, both of Omaha, noted LB 170 wouldn't have helped renters. Conrad and State Sen. Dunixi Guereca of Omaha cautioned that an increased tax on nicotine products also wouldn't be paid by 'Big Tobacco' executives, but everyday Nebraskans. Dungan and State Sen. Machaela Cavanaugh of Omaha added that increasing taxes on cigarettes and vapes would hopefully decrease tobacco usage, which could lead to less tax revenue. 'If we continue to just try to put a piece of tape over the hole in the boat,' Dungan said, 'it's not going to fix the actual problem.' After the vote, Brandt said he was disappointed and that he had made his 'run' for more relief. 'If the Legislature doesn't want to give property tax relief, I don't know what else I can do,' Brandt told the Nebraska Examiner. Voting to move forward on LB 170: Democratic State Sens. Wendy DeBoer of Omaha, Jason Prokop of Lincoln, Dan Quick of Grand Island, Jane Raybould of Lincoln and Victor Rountree of Bellevue. Voting against LB 170: Republican State Sens. Bob Andersen of Sarpy County, Beau Ballard of Lincoln, Stan Clouse of Kearney, Glen Meyer of Pender, Tanya Storer of Whitman, Jared Storm of David City and Paul Strommen of Sidney. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
14-05-2025
- Business
- Yahoo
Lawmakers unveil Nebraska's ‘One Big Beautiful Bill' aimed at property tax relief
Nebraska Gov. Jim Pillen, center, shakes hands with State Sen. Tom Brandt of Plymouth, whom the governor worked with to merge two state agencies in efforts to focus attention on the state's water resources. To the right is State Sen. Barry DeKay of Niobrara. May 7, 2025. (Zach Wendling/Nebraska Examiner) LINCOLN — A new 'One Big Beautiful Bill' unveiled Wednesday will be the last train out of Nebraska's 2025 legislative session for additional property tax relief this year. The new amendment to Legislative Bill 170, led by State Sen. Tom Brandt of Plymouth, would inject an additional $100 million each year into property tax relief, which would come at the cost of sales taxes being added to 20 currently exempt goods and services, effective Oct. 1, and increasing nicotine-based taxes on vapes (by 30%) and cigarettes (by 72 cents), effective July 1. Proposed targets for expanded sales taxes range from animal grooming and dating services to lobbying and chartered flights, as well as soft drinks and energy drinks. Supporters have dubbed the LB 170 package as 'One Big Beautiful Bill' in a nod to a federal spending package working its way through Congress with President Donald Trump's support. 'It's why I came here,' State Sen. Jana Hughes of Seward, who worked with Brandt on the package, said of property tax relief. 'It's all I heard about.' $42 million — 72-cent increase on cigarette taxes, up to $1.36. $28 million — sales taxes on 18 currently exempt 'optional' goods or services. $25 million — sales taxes on soft drinks and energy drinks. $15 million — increasing vape taxes from 10% to 40% wholesale. The only viable path to additional property tax relief this year requires the proposed revenue streams in LB 170, because lawmakers advanced, and will more than likely pass Thursday, budget bills leaving about $1.1 million to spend on other priorities. That calculation includes proposed 1.5% increases to judges' salaries each of the next two years that lawmakers have signaled they intend to pass. Brandt said he was pleased to get through the budget 'in pretty good shape' and praised the Appropriations Committee for its work. 'Now we can go back to working on broadening Nebraska's tax base,' Brandt said. A similar property tax relief plan failed throughout 2024, including during the summer special session called by Gov. Jim Pillen focused on property taxes. Opponents, including progressives and some conservatives, refused to vote for what they saw as a reliance on sales and 'sin' taxes that they said would 'shift' the burden onto low-income or middle-class working Nebraskans. Scaled-back proposals also failed to gain traction. Under Brandt's proposal, sales taxes would be added to 20 goods and services, as well as to soft drinks and energy drinks, a smaller subset than he previously proposed in LB 169. Taken together, the new sales taxes would generate about $53 million each year ($25 million of which is projected to come from pop or energy drinks alone). The package would not add sales taxes to candy, as had been proposed in LB 170. The full list of new goods or services that would be subject to the sales tax if the bill passes: Animal grooming of pets (grooming of livestock would continue to be exempt). Chartered flights. Dry cleaning or other cleaning of clothing (excluding coin-operated laundromats). Dating services. Interior design and decorating services. Lobbying services. Local passenger transportation by chartered road vehicles, including limousines or similar 'luxury' vehicles. Telemarketing services. Telefloral delivery services for out-of-state purchasers of items to be delivered in Nebraska. Personal instruction services for dance, golf or tennis. Sightseeing services by ground vehicles. Swimming pool cleaning and maintenance services. Travel agency services. Massage therapy services (excluding medical). Nail care services (excluding medical). Skin care services (excluding medical). Tattoo or body modification services (excluding medical). Weight loss services (excluding medical). 'Soft drinks' — nonalcoholic beverages that contain natural or artificial sweeteners, excluding drinks that contain milk or milk products; soy, rice or similar milk substitutes; or greater than 50% of vegetable or fruit juice by volume. 'Energy drinks' — carbonated or noncarbonated beverages containing a stimulant such as fortified caffeine, guarana, glucuronolactone or taurine 'specifically formulated to enhance energy, alertness or physical performance.' Brandt said that when he and other lawmakers determined which items to consider adding state and local sales taxes to, at 5.5 cents for the state, plus local taxes of up to 1.5 cents, he said 'optional' items were the focus. Lawmakers also tried to tread carefully, he said, on massage, nail care, skin care or tattoo/body modification services that are for medical reasons. Under the amendment to LB 170, taxes on cigarettes would increase from 64 cents per 20-pack to $1.36, the same as Iowa. Estimates that Brandt provided indicate it would generate about $42 million each year. Lawmakers would distribute about 88% of the tax to the state's general fund. That's a greater share than under current law, at about 77% of the tax. Revenue is currently divided among multiple cash funds, including for cancer research, outdoor recreation development and construction. The package also includes LB 712, from Hughes, to create a uniform 40% tax on electronic nicotine delivery systems, or vapes. It's estimated to generate about $15 million each year. The current system, which Hughes established in 2023, taxes vapes containing 3 milliliters or more of consumable nicotine at 10% of wholesale price, or 5 cents per milliliter on smaller devices. Also included is LB 212, from State Sen. Dave Wordekemper of Fremont, which aims to close a 'loophole' on taxes on cigars, cheroots or stogies purchased online from out-of-state retailers, subjecting those to a 20% excise tax. Estimates that Brandt provided indicate it would generate about $100,000 each year. The property tax relief push might also be paired with tweaks to the 2023-enacted income tax cuts that will drop income tax rates for corporations and anyone making more than $18,000 down to 3.99% by Jan. 1, 2027. Rather than pausing the reductions, as in Brandt's LB 171, some senators have suggested a longer stair-step down to 3.99%, by 2029 rather than 2027. Last month, Pillen called pausing the rate reduction a 'a crazy thought.' He has vowed to keep property taxes flat and said he was '100% confident' that lawmakers would deliver property tax relief. A separate tax relief measure at Pillen's request, LB 303 from Hughes, advanced from the Education Committee last week but has been significantly changed. It no longer includes a highly supported provision to directly lower school property tax rates, which is an alternative to increasing property tax credits to offset school property taxes. Instead, the measure includes only a committee to review and suggest long-term changes to how the state finances K-12 schools, with property tax relief in mind. Property taxes in recent years have grown annually by about $285 million. Last year was a noteworthy exception, with the state taking on the property tax portion of funding community colleges. Property taxes declined by $6 million last year off of a $5.3 billion total. LB 170 will likely be debated Monday, multiple senators said. That discussion is expected to last eight hours. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
