DeKay prepares for special session

As you may have read or heard, Governor Pillen announced his intention to call the legislature back in special session relating to property taxes beginning July 25 until “unfinished business” is resolved. On the last day of session, the legislature did not take a final vote on the session’s property tax package since that bill’s introducer did not believe they had the votes necessary to overcome a filibuster. Since the legislature adjourned, senators, including myself, have spent countless hours dedicated to talking with various groups and fellow lawmakers about how to address the property tax issue.

As of this writing, Speaker Arch has asked the legislature to plan to be available beginning July 25 to July 27 for bill introduction. Public hearings for bills introduced will start the morning of Monday, July 29, and will likely continue through the remainder of the week. I predict debate on any bills advanced from committee will begin the week of Aug. 4, though this timeline is subject to various factors, such as the time spent by the revisors’ office to draft any amendments. While bills are being prepared, the legislature will likely take up pending gubernatorial appointments and decide whether to approve or reject the governor’s appointees to various state agencies, boards and commissions. I anticipate the legislature will adjourn in mid-August due to the complex nature of the topic at hand.

In a special session, the legislative process is somewhat condensed. Bills can be introduced during the first three days. Senators may only introduce legislation within the scope of the proclamation issued by the governor, which traditionally covers only one or two subjects. For example, a senator likely could not bring a bill pertaining to prisons in the upcoming special session, but changes to property assessment, school funding or tax exemptions would probably be permissible. The governor can amend his proclamation at any time to expand the scope of the special session. Once introduced, each bill’s public hearing must take place no more than five calendar days after such bills are referred to committee. Bills advanced by committee must then pass through three rounds of debate like in a regular legislative session before they can be signed or vetoed by the governor. 

As of this writing, I am aware of at least five sets of proposals being worked on by various senators, whether in a group or independently. The most notable proposal is from the governor’s property tax working group consisting of 17 senators and the governor’s office. This proposal would fund public schools with state dollars instead of local property taxes. The money for state funding would come from a combination of state agency spending cuts, changing the LB1107 income tax credits to direct property tax credits and expanding those credits, new or increased taxes on tobacco, vaping, alcohol and hemp products, and elimination of over 100 sales tax exemptions. These changes would be paired with caps on cities, counties and other political subdivisions which would limit their property tax asks to whichever is greater: zero or the Consumer Price Index plus real growth. Exemptions would exist for situations involving public safety and voter-approved overrides.

One possible alternative includes adopting the EPIC Consumption Tax, which would likely be modeled off of legislation, LB79, brought by Senator Erdman in 2023. Another likely proposal involves expanding the state’s tax base, such as by legalizing and taxing online gambling or marijuana, and using those revenues to generate property tax relief. Other ideas include tweaking the state’s school-funding formula and choosing tax exemptions different from the ones selected by the property tax working group. Whether these proposals can be brought forward will depend on the scope of the proclamation issued by the governor. 

Right now, I am not backing any one specific proposal. It is important for me to see every proposal brought forward in writing before I will commit to anything. It may be the case that all sides may end up needing to compromise and give up something to get meaningful property tax relief and that no one will leave the room fully happy. Regardless, the main objective should be that any proposal enacted in the upcoming special session needs to result in a net tax decrease for as many people as possible.

I welcome your thoughts and opinions on the upcoming special session. My Capitol office telephone number is 402-471-2801 while my email is [email protected]. My mailing address is: Senator Barry DeKay, District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509.