World-Herald Editorial: Not Passing Property Tax Reform Would Be an “Embarassing Failure”

Having had the pleasure to get to know several of the people behind the Omaha World-Herald’s editorials over the years, they have always been thoughtful individuals who chose their words carefully.

Maybe sometimes, in my opinion, too carefully. When it comes to tax policy, as long-time watchers and admirers of the Unicameral, they have often been deferential toward policymakers in ways an average taxpayer might find hard to accept.

But that’s why it was notable to me that the phrase “embarrassing failure” appeared in the World-Herald’s otherwise mellow missives today.

That’s how the paper said this legislative session would be looked upon if senators failed to overcome an impasse on property tax reform, and that senators were currently failing the state.

The inability of senators to work collaboratively on LB974 is now impacting other bills. Senators are starting to sink each other’s legislation out of frustration, and this leads to more retaliation based on personalities and politics instead of policy.

While this is bad for the institution of the Legislature, it’s especially frustrating for taxpayers because it raises the question of how serious senators were about property taxes in the first place. Campaigning on property taxes wins a lot of votes, but the changes required to make major property tax reform happen are not popular in the rotunda of the State Capitol.

Admittedly, in some cases, voters themselves may not be sold yet on the policy details of property tax reform. But if leaders want to avoid endless arguments about underwhelming legislation, they have to make the case for why a bigger change is needed and build a bigger coalition in support of those changes.

Over the last two years, the Revenue Committee has been trying to make its own case for property tax reform, with the full knowledge that they can never satisfy everyone. But it seems no matter what they do or how they pare back the legislation, they can’t overcome the filibuster on the floor of the Legislature.

It’s hard to see how the Legislature can be effective on property taxes if LB974 is considered a bridge too far. Even if the bill passes, non-school district property taxes will still continue on their current trajectory.

The weirdest thing about the LB974 debate is that while we support the policy, in a way, opponents of tax reform should probably be more eager to pass the bill than we are.

LB974 has a lot of good features but is far from a whole loaf from our perspective. If it passes, senators will have the ability to tell their constituents they cut property taxes, and that may result in policymakers becoming even more complacent than they already are.

On the flip side, if LB974 continues to stall, the domino effect of tax incentives and other policies potentially failing all at once may dramatically increase demand for going around the Legislature to enact major tax reform through ballot initiatives.

If that were to happen, the “embarrassing failure” of LB974 may be remembered only as a temporary setback on the path to hitting the reset button on Nebraska’s tax policy.