Constitutional Amendment Would Require Replacing Revenue Lost By Tax Cuts

By Gordon HopkinsA proposed constitutional amendment, LR287CA, is intended to ensure that local governments aren’t left underfunded should the Legislature pass Governor Jim Pillen’s proposed tax package.Pillen has made cutting property tax the cornerstone of his administration. While NACO (Nebraska Association of County Officials) has offer conditional support of the governor’s overall tax plan, local officials want to find a way to replace the lost revenue resulting from the proposed tax cuts.According to the amendment’s Statement of Intent, “LR287CA is a proposed constitutional amendment to require the state to compensate political subdivisions for any locally imposed revenue source that is reduced or eliminated by the Legislature.”Jefferson County Commissioner and southeast director for NACO, Mark Schoenrock, was one of several individuals who testified in favor of LR287CA on Thursday, February 15, 202, in front of the Government, Military and Veterans Affairs Committee at the Legislature.Schoenrock said, “The costs of all inputs required for the administration of county government have increased significantly in the last few years. The 93 counties in Nebraska county government must procure all these to provide the essential services to our citizens that reside in county government. I know many of our county boards across Nebraska and I believe that we’re fiscally prudent and responsible managers of our respective county budgets.”Schoenrock gave the recent snow emergency as an example of the importance of keeping local services funded.“Now I’d like to give you an example of that with the terrible snowstorms that we had in January. We kept people in our county shop overnight, so they could go out and clear roads,” said Schoenrock. “We’re glad that we had them on duty that night, because they had to go out and clear the road for an ambulance to go out and get somebody in the middle of the night and probably save that person’s life.”Schoenrock added, “If the source of revenue needed to provide these services is cut, Nebraska counties would have no choice but to cut essential services.”Also testifying in support of the bill were John Cannon, Executive Director of NACO; Deb VanMatre, President of the League of Nebraska Municipalities and mayor of Gibbon; and Gary Mixon, Sarpy County board member. There were no opponents present.Inheritance TaxOne of the taxes Pillen is looking to cut is inheritance tax.“Revenue from inheritance tax for the last five years has been about $650,000 and that equates to about three points on our levy,” Schoenrock pointed out. “About 10 to 12 percent of our budget comes in from inheritance tax.”Schoenrock has previously emphasized that he doesn’t oppose cutting or even eliminating the inheritance tax, he just wants to see the lost revenue replaced, which is why he supports LR287CA.Press ConferenceThat same day, NACO and the League of Nebraska Municipalities held a joint news conference at 10:15 a.m. on Thursday, February 15, 2024, at the Capitol Rotunda in Lincoln. The purpose was to present the results of a statewide poll commissioned by both organizations.Schoenrock was one of the speakers and opened the press conference, “County and local government is the level of government closest to our citizens. And as you will see in the survey results that we are presenting today, it is the most trusted by our citizens.”VanMatre also spoke, “The statewide poll commissioned by the League and NACO underscores the need for more property tax relief. The poll also indicates that an overwhelming number of Nebraska voters across the political spectrum support using various state sources of revenue to provide additional property tax relief and help local governments maintain essential services.”

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