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Gov. Pill’s plan to cap local property tax requests would reshape state tax structure
Summary
Gov. Pill’s proposal—frequently cited as LB1—would limit annual increases to local property tax requests to zero or the prior year’s CPI change, add narrow exceptions, revise the property tax credit program and shift some agency funding; proponents and opponents began testifying in committee this week.
Gov. Pill on Tuesday drew a revenue committee hearing for a comprehensive property tax package that would cap increases in county and city property tax requests at either zero or the prior year’s percentage change in the Consumer Price Index, the weekly legislative report said. The proposal is commonly referenced in committee materials as LB1.
The package includes several carve-outs: exceptions would be available for declared local or state emergencies, population or service growth, new public health or safety services, and pay increases to fill unstaffed law enforcement positions. Under the plan, counties could exceed the cap if a majority of voters approved an increased property tax request at the next regularly scheduled election.
The report said LB1 would remove more than 100 existing sales tax exemptions and create new taxes and rates on services, revise the existing property tax credit program to add credits for school taxes paid, and leave schools’ authority to levy taxes intact. It also noted that the overall plan would change the funding structure for some state agencies and programs by shifting support from state general funds to cash funds or other dedicated sources.
The revenue committee heard testimony both for and against the concepts; the report said some witnesses testified in opposition while others raised support for specific provisions. No formal committee vote on final text was recorded in the report; the committee was expected to advance concepts from LB1 and related property tax measures for debate by the full Legislature the following week.
A procedural note in the report warned that several “shell” bills are available, meaning bill numbers and printed titles could change as new language is substituted.
The matter moves next through the revenue committee’s work and then to floor debate if the committee advances a final bill.
