Gov. Pete Rickett’s tax reduction proposals died Tuesday in the state legislature, even though the majority of state senators supported the bill.In keeping with the nature of this session, controversial bills fall by the wayside unless supporters can get 33 votes – the number needed to end debate -- allowing opponents to delay the bill with a filibuster.
Rickett’s bill, sponsored by Sen. Jim Smith of Papillion, called for a gradual income tax reduction in years when state revenues increase by 3.5%.
Property taxes for agricultural land would have been figured on an income-potential basis. To accomplish this, the state would have to kick in more state aid to education starting next year, increasing the number of school districts that would receive state equalization aid.
Critics included education and agriculture groups who worried about changing the income stream for schools.
Several ag groups scoffed at the changes in property taxes. One set of critics said the proposal would cut $1 in property taxes for every $10 in income taxes.
In the last election, Ricketts openly backed the opponents of several senators who voted against his proposals. Ricketts contributed financially to some opponents. Several incumbent senators were defeated.
But the governor’s clout did not extend far enough in this debate to get the needed votes to pass his bill. He needed 33 votes, and received 27.
There were 13 senators who did not vote.
Sen Mike Groene did not support the bill. He said Wednesday that it would merely shift taxes.
The bill would lower ag-land valuation from 75% to 65%, he said, "which sounds great until you realize that it would cause all taxing entities to raise tax rates to make up for the lost valuations, so what little tax relief there is for agriculture would shift to home and business owners."
Groene said there are two true ways to gain property tax relief -- replace local property taxes with state income and sales taxes through state aid to education, and simultaneously control local government spending.
The 13 senators “stood on the sidelines not voting, many who campaigned on tax reform, and who could have prevented this,” said Jim Vokal of the Platte Institute, which strongly supported the bill.
It is possible that at least some of the bill's provisions will be attached to other bills yet to be debated, legislative observers say.
In a short statement, Ricketts said, “Twenty-two senators voted against Nebraska taxpayers.”
He thanked the senators by name who voted to invoke cloture on the bill – Sens. Albrecht, Bostelman, Brasch, Brewer, Clements, Craighead, Ebke, Erdman, Friesen, Geist, Halloran, Hilgers, Hilkemann, Hughes, Kolterman, Kuehn, Larson, Lindstrom, Linehan, Lowe, Murante, Riepe, Scheer, Smith, Stinner, Watermeier and Williams.