“Generational Change In Tax Policy”

By Gordon HopkinsNACO (Nebraska Association of County Officials) has offered conditional support of Governor Jim Pillen’s tax package. That condition depends on finding a way to replace the lost revenue resulting from the proposed tax cuts.Pillen has made cutting property tax the cornerstone of his administration. In his State of the State address on January 18, 2024, the governor said, “We must lower our overall tax burden, widen our tax base, and end the era of special interest tax breaks. Tax policy must benefit our state as a whole, not whoever has the best lobbyist. With these changes Nebraskans’ property tax bill will be cut by 40 percent this year. I know there is the will, good faith, knowledge, and ability in this chamber to solve it, and I pledge to work with you as long as it takes to get this done.”Jefferson County Commissioner Mark Schoenrock, who serves on the NACPO board, gave an update to his fellow commissioners at a meeting on Tuesday, January 30, 2024.“The NACO board has had a number of discussions, both within our board and with the governor and his staff,” said Schoenrock. “NACO is taking the position of conditionally supporting the governor’s tax package.”“And we are using the word conditional because,” said Schoenrock. “We have not received assurances from either the governor or from key members of the legislature, primarily in the revenue committee, as to where the replacement revenue is going to come from.”While commissioners support reducing property tax, Schoenrock pointed out, “The governor’s tax package will take away from counties. That overall tax package will cut the Nebraska property taxes by approximately 40 percent. And, obviously, that’s the primary source of revenue for county governments.”Schoenrock said, “I call it a generational change in tax policy in Nebraska, and Governor Pillen is very adamant, you know, that he’s going to get through this 40 percent cut.”Another source of revenue for counties is inheritance tax. There has been an active campaign to eliminate inheritance tax in the legislature for man year.“The other concern is the inheritance tax will in all probability be eliminated, either over the next five years or potentially all at once,” said Schoenrock. “And so we have the same concern with that, if the inheritance tax is eliminated, where will the replacement revenue come from for that?”Schoenrock explained, “And for us here, that’s to the tune of about three and a half cents on our levy, which equates to about 10 to 12 percent of our budget. And I have continually made the point, as have a couple other members of the board, when we spoke with the governor.”Raise taxes or cut services in a debate that is held every budget season. Commissioners has reported an numerous occasional that, while all citizens want lower taxes, most don’t want to see services cut.Schoenrock said he gave detailed examples of what the funds are used for in Jefferson County, “You know, to try and give him some concrete examples of what county government is having to pay in order to maintain these essential services for our citizens. There’s no fluff in this budget. This is what it is costing county government to provide these essential services to our citizens.”Schoenrock remains optimistic that the governor understands the difficulty, “To his credit. I think he has he’s been listening closely to what we’re saying.”

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