67% of Omaha town hall participants dissatisfied with property tax compromise

At our fifth and final Virtual Property Tax Town Hall of the summer, Omaha area voters and taxpayers had the chance to weigh in on a number of online straw polls on property tax issues. While most of these poll questions were asked of previous participants, the Legislature’s recent advancement of LB1107 gave us the opportunity to ask residents of the state’s largest metropolitan area about their thoughts on the property tax compromise, which is likely to pass this week.

The metro residents who participated in this program did not dramatically disagree with respondents in our previous town halls on most questions but expressed more uncertainty about making cuts to government spending to make reductions to local property taxes.

Few attendees at our town halls said the pandemic had convinced them that property taxes were a less important issue in the state, though as we moved eastward in our digital schedule, the percentage of voters who said the issue had become more urgent as a result of the crisis also became more muted. While 21% of respondents said the property tax issue became a greater concern, the vast majority of  Omaha area attendees said the issue remains about where it was on their list of priorities before COVID-19 was a part of daily life.

The Omaha area is home to a large share of the votes in the Nebraska Legislature. While area senators had been previously reluctant to sign onto property tax legislation that would have required changes to local school property taxing authority, the current compromise in LB1107 won most of the region’s votes in first-round debate. We decided to provide an overview of LB1107 and ask constituents what they think of the pending legislation.

While the text displayed for the question below was truncated due to character limits, participants were read the following question: The Legislature’s current property tax proposal, LB1107, promises to provide property owners $375 million in additional credits annually for school property taxes paid by 2024. Last year, a property valued at $100,000 received $104 in credit under the current property tax relief program. This new proposal is likely to more than double that amount, though local property taxes could still continue to rise. What is your level of satisfaction with this proposal?

Even though LB1107 is a noteworthy compromise and is undoubtedly the result of a lot of hard work in Lincoln, 67% of respondents expressed dissatisfaction with the proposal. Of course, this is the same group of voters and taxpayers who will later show their approval for a number of other property tax proposals, so the majority’s selection of “somewhat dissatisfied” may indicate that while they approve of the idea of doing something about property taxes, this particular legislation may not represent what the respondents had in mind.

One Omaha attendee noted, and I have heard throughout the town hall series, that these respondents were particularly concerned about property tax assessments. The bill itself does not curtail those assessments, though it does have a provision in later years to increase its tax credit policy as assessments rise.

Of course, many legislative changes will have policy details that voters may not like, and it’s possible that among some audiences, anything the Legislature could realistically accomplish might be seen as insufficient. Just because an idea does poorly in a poll doesn’t automatically mean it’s a bad idea or is not the best available option. Nonetheless, these voter sentiments might give us some sense of whether the policy will have staying power should it be adopted, or if there will be demands to move ahead with alternatives in the future.

In what might be seen as a surprise for an Omaha area audience, 53% of respondents favored a potential ballot initiative idea to amend the state constitution and replace property and income taxes with a broad-based sales tax. This idea, known to supporters as the Consumption Tax, performed better with Omaha’s audience than in Southeast Nebraska (Lincoln and surrounding areas) last week. Opposition to the idea was also not as pronounced at this town hall.

Nonetheless, support for this approach was significantly lower in Omaha than in Western and Central Nebraska.

And although another property tax ballot initiative idea called Truth in Taxation does not make anywhere near the promises to change the property tax system as the last two polled proposals, Omaha area voters and taxpayers gave strong approval to the policy in this straw poll. Seventy-nine percent said they would vote for an initiative requiring that taxpayers receive mailed notice of property tax hearings at the local level. While this is less ambitious than eliminating major taxes or even spending down property taxes with state funds, it seems some people on both sides of those issues see some value in this approach, and relatively few were opposed or undecided.

One area where many Omahans tend to look at property taxes differently than voters in some rural areas of Nebraska is whether local government spending needs to be significantly reduced as part of property tax reform. While there are certainly some very enthusiastic fiscal conservatives in Omaha, when you take the whole body of voters into account, the belief that property taxes are bad enough at this time to justify sacrificing local services faces much more resistance in most of the Omaha metro.

Even among what might be argued to be a more conservative audience through self-selection, the majority of respondents were either undecided or opposed to cutting government spending to the point that it would impact schools, health programs, or roads. That doesn’t mean they would never join the 40% plurality here if they found a favorable way to cut government spending, but it does mean most of these voters will perceive a risk of losing something important to them, even if they were able to pay less property tax in exchange.

As a town hall guest demonstrated on the program, if your kids are homeschooled, it may be easier to see the property taxes you pay to the local school to be a burden, and that you would not be impacted if the district’s funding were cut. But if all your kids attend that school, you may see what you pay in property taxes to be a relatively great deal that adds to your quality of life.

And finally, in light of the Legislature now taking action on property taxes, we wanted to measure whether these voters and taxpayers would be satisfied to settle down and leave the property tax issue up to state senators in the future, or if there would still be interest in moving forward with a voter initiative to address their concerns.

We’ve had some thoughtful responses and discussion about the role of the Legislature and voters throughout this virtual town hall series, and there has been a contingent who believed the Legislature was better suited to tackle the property tax problem in every region of the state. But even in Omaha, there is clearly some voter impatience that would justify a ballot campaign even knowing what we know now. Fifty-three percent of these respondents said they think voters would do a better job on the issue.

It will be up to property tax reform advocates to figure out what kind of approach would attract enough of this audience to build a durable level of support in the metro, which would be critical for a potential statewide campaign.