Largest Nebraska cities and counties push back on proposed spending caps

LINCOLN — Mayors and county boards from Nebraska’s most populous cities and counties are urging the state to ensure that any new cap on spending growth leaves room for growing communities and inflationary costs.

A letter they sent this week to the Legislature’s Revenue Committee seeks changes to state-proposed caps on local spending, including flexibility on city and county spending on “public safety services,” including local law enforcement, jails, fire and rescue services, and some mental health services.

They released the letter on the same day that State Sen. Eliot Bostar’s Legislative Bill 1216 has a hearing scheduled to discuss removing police, fire, rescue, corrections and other emergency services from the base calculation for hard caps on local spending.

The letter was signed by the mayors of Omaha, Lincoln, Bellevue, Papillion, La Vista, Gretna, and Springfield and county board chairs in Douglas, Lancaster, and Sarpy Counties, essentially the eastern Interstate 80 corridor.

They urged Gov. Jim Pillen and the Revenue Committee to “prioritize public safety, community growth, and increases in the Consumer Price Index (CPI) in any tax reform package that is negotiated this year.” 

“The goal of reducing property taxes is supported by Nebraskans in urban and rural areas alike, but any reduction in public safety services would be detrimental to the entire state,” the letter says, criticizing the lack of clear exceptions in proposals under consideration by the Legislature.

Linehan, Pillen’s office respond

The Revenue Committee’s influential chair, State Sen. Lou Ann Linehan of Omaha, said she welcomed local officials’ “thoughtful input” and said she appreciated that the communities were not saying, “No, no, no” to the need to address property taxes.

“We have to solve the problem,” she said.

Linehan said Thursday that any cap the committee advances would include exceptions for growing communities, although she said she might need a clearer definition from the cities and counties of what each considers public safety spending.

“I said at the hearing that we had to include growth,” she said.  “Everybody keeps ignoring the fact that they can override it with a vote of the people.” 

Pillen has pressed state lawmakers to find ways to offset 40% of local property tax costs, including shifts from proposed increases in the state sales tax and taxes on soda and cigarettes. He and some conservative allies have argued they also need hard caps on local spending. 

Pillen spokeswoman Laura Strimple said his office is “reviewing all input with regard to the cap.” She said the spending cap could be designed to eliminate property tax growth. It “could include a zero percent cap with exceptions for public safety,” she said.

Safety services make up a significant portion of the property-tax funded portion of every city and county budget — more than half for many cities and more than 40% for larger counties, people familiar with city and county budgeting said.

In Omaha, the police and fire departments make up more than 60% of the city’s general fund budget, Mayor Jean Stothert said.

The president of the Omaha police union, Sgt. Tony Conner, said his group supports LB 1216 and its acknowledgment that 2024 is not the time to cap spending growth. He said departments all over the country are struggling to recruit new officers. 

“Police recruitment and retention are in crisis nationwide, and now is not the time to add regulations that could hinder departments’ efforts to fill vacancies in their agencies,” Conner said.