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Governor Jim Pillen announced he is calling a special session of the Nebraska Legislature to cut property taxes, but apparently without consensus on how to accomplish this goal.(1) Led by MaryLee Moulton, former co-president of the League of Women Voters of Nebraska, we are digging into the factors surrounding a potential special session to provide context for Nebraska voters.

What is a special session of the Nebraska Legislature?
The Nebraska Legislature uses a biennium structure, which means it works in two-year increments with a “long” 90-day session the first year and a “short” 60-day session the second. Both start in early January and continue through the spring, ending somewhere between April and June depending on the session. If time sensitive or pressing matters arise outside of the time when the legislators are in session, they are able to convene for a “special session.”

A special session functions like a mini regular session with a few key details, one of which is that they are not to work on business outside of the initial topic they were called together to address. According to Article IV-8 of the Nebraska Constitution: “The Governor may, on extraordinary occasions, convene the Legislature by proclamation, stating therein the purpose for which they are convened, and the Legislature shall enter upon no business except that for which they were called together.”(2) That proclamation can be amended later.(3)

Historically, lawmakers have self-policed when it comes to legislation that could fall outside the governor’s proclamation, according to Brandon Metzler, clerk of the Legislature.(4)

Examples of past special session topics include the redrawing of districts based on late 2020 Census data (September 2021),(5) regulation of impending oil pipelines (November 2011),(6) and emergency budget reductions (2009).(7)

Why is Governor Pillen calling a special session?
On April 18, the final day of the 108th Legislature, LB388 – Governor Pillen’s tax plan (introduced by Senator Lou Ann Linehan) to reduce property taxes by shifting some of the burden to sales taxes – failed to advance. After a proposed 1-cent sales tax hike and some other new taxes were amended out of LB388 the week prior to the final vote, the bill would have raised taxes on several products, such as cigarettes and vaping products; imposed new sales taxes on other items, such as pop and candy, pet services by veterinarians, digital ads and dry cleaning; and “front loaded” K-12 income tax credits, now sent to taxpayers, to go directly to school districts to lower tax rates.

Some liberal and conservative state senators opposed LB388, according to a June 10, 2024, article in the Nebraska Examiner.(8)

According to the article, state Senator John Cavanaugh of Omaha “opposed the latest tax package…because it originally called for an increase of one or two cents in the sales tax rate. Cavanaugh said sales taxes are, by definition, ‘regressive’ and would have a bigger impact on lower income residents, who don’t buy as many discretionary items and have less of a choice about their purchases.”(9)

Senator Julie Slama of Dunbar opposed the bill from a “baseline belief” that certain taxes can’t be raised to cut other taxes. She argued that the governor can’t say he cut taxes by adopting that model.(10)

Pillen, who made cutting property taxes a priority, “faulted the Legislature for failing to pass his plan to cut property taxes. And Pillen vowed to call senators back into as many special sessions as it takes to address the issue this year,” according to a story aired April 18 by Nebraska Public Media.(11)

Although Pillen has said a special session would be solely focused on property taxes, he also has indicated that he would be “open to other time-sensitive ‘unfinished business,’ if there is enough legislative support to do so” – such as how Nebraska allocates its presidential elector votes during the presidential election. Only Nebraska and Maine award their Electoral College votes (five in Nebraska and four in Maine) based on who wins each congressional district as well as who wins statewide instead a “winner take all” model.(12)

When will the special session take place?
In an official letter to Senator John Arch, speaker of the Nebraska Legislature, Pillen confirmed his intentions to bring state senators back for a special session beginning July 25. According to the letter, lawmakers will remain until property tax reform is delivered and senators resolve their “unfinished business.” In a letter to all senators and staff, Arch said senators should plan to meet July 25-27, Thursday through Saturday, for bill introductions and then Monday, July 29, for the start of legislative hearings.(13)

What has Governor Pillen been doing this summer?
Pillen has been barnstorming the state to pitch his vision for reforming the tax system in Nebraska to lower property taxes. He has held town halls in various towns across the state, but has not yet held one in Omaha or Lincoln. You can watch the governor at one of the town halls in Chadron as part of his interview with Omaha television station KETV. Pillen was expected to lead an 11-day trade mission to Indonesia from July 15 to July 24, but announced on July 5 that he “asked Lt. Gov. Joe Kelly to step in for him to lead a trade mission to Indonesia this month — a shift made in light of the upcoming special legislative session.”(14)

What is Governor Pillen’s new proposal for the state to take over all public school funding?
According to a June 26 article in the Nebraska Examiner, Pillen confirmed that he is “asking the State of Nebraska to take on most or all public K-12 school spending, instead of funding schools through local property taxes. The shift would be a national standout.” He said “having the state take on an additional $1.65 billion to fund K-12 schools, instead of funding schools through local property taxes, would be a win-win.” Pillen is also “seeking to cap local political subdivisions’ year-to-year spending increases, either at 0% or the level of the consumer price index, a measure of inflation. CPI for May 2024 was at 3.3%.”(15)

This is a radical change in school funding and raises issues of local control. It may further complicate negotiations in the Legislature. In 2023, the state of Nebraska took over funding of public community colleges and eliminated that funding line from property taxes.

Where can you to find more information?

Sources Cited

1 Agricultural, education senators push back on some of Gov. Jim Pillen’s property tax reforms. Nebraska Examiner, July 7, 2024. https://nebraskaexaminer.com/2024/07/07/agricultural-education-senators-push-back-on-some-of-gov-jim-pillens-property-tax-reforms/
2 Nebraska State Constitution Article IV-8. Nebraska Legislature. https://nebraskalegislature.gov/laws/articles.php?article=IV-8
3 Property tax special session likely to begin July 25; Speaker Arch offers schedule. Nebraska Examiner, June 25, 2024. https://nebraskaexaminer.com/2024/06/25/property-tax-special-session-likely-to-begin-july-25-speaker-arch-offers-schedule/
4 Ibid.
5 Redistricting maps approved. Nebraska Public Media, September 30, 2021. https://nebraskapublicmedia.org/es/news/news-articles/redistricting-maps-approved/
6 Two pipeline measures approved; Legislature adjourns. Unicameral Update, November 22, 2011. https://update.legislature.ne.gov/?p=5458
7 Special session day 2. Nebraska Public Media, November 4, 2009. https://nebraskapublicmedia.org/en/news/news-articles/special-session-day-2/
8 ‘Everybody’s got to play’: Breaking down Nebraska’s more than 100 sales tax exemptions. Nebraska Examiner, June 10, 2024. https://nebraskaexaminer.com/2024/06/10/everybodys-got-to-play-breaking-down-nebraskas-more-than-100-sales-tax-exemptions/
9 Ibid.
10 Ibid.
11 Pillen faults senators on property taxes, vows special session. Nebraska Public Media, April 18, 2024. https://nebraskapublicmedia.org/en/news/news-articles/pillen-faults-senators-on-property-taxes-vows-special-session/
12 Property tax special session likely to begin July 25 (see n3 for full citation).
13 Ibid.
14 Lt. Gov. Joe Kelly to lead Indonesia trade trip, as Pillen focuses on special session. Nebraska Examiner, July 5, 2024. https://nebraskaexaminer.com/briefs/lt-gov-joe-kelly-to-lead-indonesia-trade-trip-as-pillen-focuses-on-special-session/
15 Questions remain as Gov. Pillen doubles down on taking over K-12 public school funding. Nebraska Examiner, June 26, 2024. https://nebraskaexaminer.com/2024/06/26/questions-remain-as-gov-pillen-doubles-down-on-taking-over-k-12-public-school-funding/

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