State lawmakers advanced a major property tax relief proposal to Final Reading on April 10. ...

State lawmakers advanced a major property tax relief proposal to Final Reading on April 10. LB 388, which was introduced by the Legislature's Revenue Committee Chair Sen. Lou Ann Linehan of Elkhorn, advanced on a 28-14 vote. The Nebraska Farm Bureau advocated for the bill as it includes several provisions targeted to slowing property tax collections by political subdivisions and raising revenues elsewhere to offset reductions in property taxes; both being steps needed to better balance the state's three-legged tax stool of property, sales, and income taxes. The bill would:

• Incorporate property tax collection caps for counties, cities, and villages.
• Frontload funding to reduce property taxes paid to K-12 schools by property owners by using state dollars currently allocated to fund the state's Refundable Income Tax Credit (RITC) for property taxes paid to schools.

• To sustain that relief, the bill adds $30 million to the fund each year moving forward.
• It also includes provisions to add additional dollars to the front-loaded funds if state revenues exceed certain thresholds.
• By the state paying those school property taxes upfront, Nebraskans will no longer need to apply for the RITC credit as those and additional dollars will be used to directly lower property taxes collected by K-12 schools from taxpayers.

• Increase taxes on cigarettes, vaping, and consumable help products.
• Eliminate sales tax exemptions for lottery tickets, clothing cleaning and repair, pet related veterinary services, candy, and soda.

Senators will take a final vote on the bill Thursday, April 18, the last day of the 2024 legislative session.