May 05 2019

LB289 Adds $500M in State Spending with No Guarantee of Property Tax Relief


As the 2019 Nebraska Legislative session continues, state senators will be debating LB289, a major tax package claiming to lower property taxes. The plan offsets more than $500 million in new spending by raising $372 million in new taxes and raiding the income and sales tax in the Property Tax Credit Fund to the tune of $100 million in 2020 and nearly $200 million in 2021. The Lincoln Chamber of Commerce is one of the state's top advocates for tax reform. We support policies that 1) promote growth and improve our city and state's economic competitiveness; 2) make starting or growing a business in Lincoln and Nebraska easier; and 3) reduce, or at least hold steady, Nebraskans' overall tax burden for the long term.

Here's where LB289 falls short:

  • This bill does not guarantee long-term property tax relief. The only thing it guarantees is unsustainable budget growth outpacing revenue growth.
  • The measures designed to avoid spending growth are insufficient, and the bill does not build the cash reserve.
  • If this bill passes, Nebraska will be ranked in the top 20 high-tax states for sales, property and income taxes. This ranking will not attract new residents or workers or spur economic growth.
  • At best, this bill might temporarily shift burden from property tax to sales tax for a few years until spending growth eats up the higher tax revenues. 
  • The bill broadens the sales tax to goods and services not historically taxed in Nebraska without studying economic impacts. 
  • The Lincoln Chamber of Commerce joins the Nebraska Chamber of Commerce & Industry by encouraging its members to contact their state senator and ask for a 'NO' vote on LB289.