Pillen Should Push Back on Taxes

Focus on Counties and Cities

Update: Don Stenberg has his say: https://nebraskaexaminer.com/2024/01/13/thoughts-on-property-tax-reform-history/

Nebraska Governor Pillen is under attack for trying to reduce property taxes by raising and shifting to the state sales tax (https://nebraskaexaminer.com/2024/01/11/polling-indicates-many-nebraskans-oppose-pillen-plan-to-offset-property-taxes-with-higher-sales-tax/). God bless him! The American for Prosperity poll claiming this is unpopular is sloppy because most people think they do not pay property tax or not very much. This is why the property tax credit is not taken advantage of to the extent it should be, but if they took the time to compare what they are paying to what others are paying, they would scream. Also, while American for Prosperity is a taxpayer’s friend, they often object to taxation for the sake of hating taxes instead of advocating for serious reforms. There are only two things certain in life: death and taxes.

The Governor has been a bit naive about funding schools and expecting them to drop property taxes. Instead, he should completely reform Nebraska County governments. I have known Doug Kagan of Nebraska Taxpayers for Freedom for decades and I know and appreciate Walt Peffer, the Douglas County Assessor. They have a passion for advocacy and are receptive to ideas, but I find their suggested reforms get stuck on a “hamster wheel”: somehow after supposed reform, you end up where you started.  However, Pillen has tapped such people for ideas but he needs more ideas thus this essay.

 The Counties have so many difficulties, tax reform should focus on them. If the Metropolitan Community Colleges can be removed from the property tax, what can be done for the counties? Can the cities such as Omaha and Lincoln work to lower their property tax dependency? Can the bus services of Omaha and Lincoln be turned over to a state agency and funded by the state?

The cities have numerous ways of going away from the property tax system. However, the Counties have way too many restrictions on their ability to charge fees for basic services and have great expenses to pay for important services such as County hospitals and Court buildings. At the same time, County Commissioners have given themselves heavy pay raises which need to be capped.

Douglas County Commissioners are stuck in a real sadistic bind. They want to improve assistance to juveniles in the justice system. They could raise a County sales tax, but it cannot be implemented in Omaha which means such a tax cannot be implemented in the vast majority of Douglas County. So the Commissioners are stuck with raising property taxes which they can do countywide! They are lucky higher property evaluations come to their aid. At the same time, the Counties are dependent on the inheritance tax, yet there are proposals to abolish this tax which only puts the Counties in a more dire situation.

Yes, the inheritance tax should go, but the whole taxation and fee systems of the Counties are in need of dramatic reform. The EPIC Option (https://epicoption.org/) does this quite well, but if EPIC is not to happen, the taxation capabilities of the Counties must change. You have probably heard Jim Vokal of the Platte Institute take issue with the EPIC Option or perhaps heard a similar derision of EPIC from Bryan Sloane. However, serious and dramatic reform is needed and such advocates need to put out serious ideas instead of naysaying.

I appreciate all the above people, but property taxes are a cancer on Nebraska's economy.  Merely getting rid of the market evaluation on properties and going to a flat square foot tax would be an improvement.  You have an 1800 square feet home. You pay 10 cents per foot. You pay $180 in property taxes. This is basically a land tax (https://en.wikipedia.org/wiki/Land_value_tax). (Such taxation largely goes back to George Henry https://en.wikipedia.org/wiki/Henry_George)  This reform would get rid of all the idiotic market evaluations. But the powers-which-be don't want to do this because they know every increase in property evaluations is an increase in tax revenue imposed on a minority of people. This is their evil superpower they do not want to surrender. 

So, Governor Pillen, if you are not going to embrace EPIC Option, go back to the Counties and cities and get them to be less dependent on the property tax system.