These 8 senators set Nebraska’s tax policy agenda
The Nebraska Legislature’s Revenue Committee is the gatekeeper for all things tax.
Eight state senators hold public hearings and decide which tax proposals move on from the bill introduction stage and receive consideration from the whole Legislature.
Through 2019 and 2020, the committee was deeply dug into a process of trying to move forward on property tax reform. Their overall goal was to use an infusion of state revenue to lighten the load of local property taxes needed to fund K-12 education.
The committee was jam-packed with committed tax reformers, both rural and urban, who weren’t satisfied with the status quo, and were willing to offer significant changes. But the senators still faced obstacles in convincing 33 of their colleagues, and enough constituents, of the urgency of their proposals.
The governor wouldn’t support a bill that would require new revenue sources, like eliminating sales tax exemptions. Tax experts said an outright increase in taxes, such as raising the state sales tax, would reduce the competitiveness of Nebraska’s tax code more than the property tax changes offered would improve it. And school districts wouldn’t go along with a plan that put additional limits on local property taxing authority in exchange for new sources of state funds, perhaps in fear the state would someday pull its funding back.
The resulting compromise was the Property Tax Incentive Act, which the Nebraska Department of Revenue recently announced will be worth a 6% refundable state income tax credit on school district property taxes paid in the first year, not including bonds or overrides. The credit is in addition to the Property Tax Credit program that appears on your property tax bill, which has been in operation since 2007. That funding is sent to local governments directly instead of to taxpayers.
The credit will provide a big boost in property tax relief in the years ahead, but it won’t make changes to the current direction of property taxes Nebraskans see on their bills, or generate much notice on tax climate rankings. It also comes with the long-term risk that state spending on property tax programs will crowd out other budget priorities, while not making a significant change to the state’s tax code.
As a new class enters the Legislature, the latest Revenue Committee will consider whether to build on top of that previous effort, or to let things be for a while. Half of the previous committee is returning. Sen. Lou Ann Linehan continues as chair, rejoined by Sens. Tom Briese, Curt Friesen, and Brett Lindstrom, each of which have been vocal on tax policy issues throughout their time in the Legislature.
But despite this year’s turnover, the Revenue Committee will be surprisingly comprised of even more veteran legislators. Returning state Sens. Mike Flood and Rich Pahls will now be on the committee, lending their experiences from past sessions of the Unicameral.
Sen. Eliot Bostar and Sen. Joni Albrecht will also be joining the committee for the first time. Former Revenue Committee members Sens. Mark Kolterman, Mike Groene, and John McCollister have moved to other committee assignments, while Sen. Sue Crawford was term limited last year.
Committee assignments are a big deal in the Unicameral. The only second house that can move a bill forward under gridlock are the voters themselves. In the short term, that means committee composition says a lot about what legislation could be advanced, if not what will be advanced.
This Revenue Committee is largely conservative, if not deeply so, and is not likely to advance proposals for tax increases without some kind of overall strategy. That doesn’t mean the members are not willing to put some new ways of paying for government on the table.
Two of the committee members, Sens. Albrecht and Briese, are co-sponsors of a proposal to essentially replace Nebraska’s state and local tax system with a consumption tax. That commitment may be more in their back pocket than anything, but it’s certainly different from what we have today. In addition, all of the returning members have supported legislation to change the state’s tax structure to reduce reliance on property taxes or income taxes.
Sens. Flood and Pahls bring experiences that could shape how the Revenue Committee’s work is received in the larger Legislature. Flood was the longest-serving speaker of the Unicameral in his previous terms in the body, which coincided with the Great Recession, while Pahls is a former principal in the Millard Public Schools.
Bostar, as the sole registered Democrat on the committee, could potentially be outvoted on some key committee issues. But that doesn’t mean his role is any less important. He adds representation from the Lincoln area that was absent on the previous Revenue Committee. And besides making contributions to proposals as they move through committee, Bostar will also have the ability to report back to his fellow travelers in the rest of the Legislature, with his take on the quality of the work being done, and whether it deserves support.
Here’s the full list of the Revenue Committee members. You can keep in touch with each through our lawmakers page or the individual profile for each member.