Nebraska is a conservative state with a liberal tax system. After decades of tweaks, changes, loopholes and patches, it has become an ungainly beast that needs to be finally put down. The current system isn’t working for Nebraskans, and it’s time for a fundamental rethinking of how we fund our government.
Frankly, I think every solution should be on the table — I just want something that’ll work. If that means abolishing property taxes like in the EPIC Option, fine, but doing that comes with its own set of challenges that I don’t think are worth the cost.
The EPIC Option’s proponents have the right mindset by acknowledging that we shouldn’t be afraid to upend the system to make things work for Nebraskans. But we can’t afford to ignore or dismiss the potential pitfalls of any proposal.
Gov. Jim Pillen and State Sen. Lou Ann Linehan’s tax reform plans, which were pushed by State Treasurer Tom Briese a few years ago, are similarly unworkable in the long term. Nothing they’ve done has worked yet. Despite spending $1.6 billion on property tax relief credits every year, our tax bills are higher than ever. But has anyone’s property taxes gone down?
I have no doubt that they mean well, but their plans are failing, and it’s clear that more of the same will only make things worse.
We need a real approach to tax reform, not more half-measures. Here are some practical, realistic reforms that we can implement even without a massive overhaul:
1. Homestead exemptions: Remove the caps on home values for homestead exemptions. This will ensure that more Nebraskans, even in high-growth areas of the state, will benefit from tax relief.
2. Spending growth cap: Limit local government spending growth to 3% per year, with exceptions for public safety. This will rein in unnecessary government expansion and ensure tax dollars are used efficiently.
3. School levy limits: Count property tax credits toward school district levy limits to reduce overall property tax burdens on homeowners.
4. Antiquated taxes: End the capital stock tax and the inheritance tax, which punish small businesses and family farms. These taxes make it harder for local businesses to thrive and create jobs.
5. Motor vehicle registrations: Replace the outdated registration tax, which is currently based on a vehicle’s MSRP, with a flat fee. South Dakota’s system provides a model we could follow for more fairness and predictability.
These changes won’t magically fix everything, but they are realistic steps that can be taken now to ease the burden on Nebraska’s families, farmers and small businesses.
Tax reform is only part of the equation. Nebraska’s government operates under a 1970s system that is clunky, inefficient and nearly impossible for the average citizen to understand. Even basic things such as budget summaries are practically unusable and lack clear breakdowns of funding allocations to critical areas like education, law enforcement, transportation and welfare. Instead, Nebraskans are left trying to decipher a labyrinth of accounting jargon.
Modernizing the budget process is a crucial part of any tax reforms we take. Nebraskans deserve a government that is open about how their tax dollars are spent and one that prioritizes efficiency over waste.
This isn’t something that can be fixed in the upcoming legislative session – for starters, we would need a governor who is not fixated on getting the tax breaks for himself left, right, and center. Mainly though, it would mean nothing else would get done during the session as every interest group would have an opinion or two on what should be done and why they deserve to keep or get new tax breaks or incentives.
At the same time, conservatives cannot simply offer the same anti-state, low-tax policies of the Reagan era. Those policies worked for a different world and a different economy. We became so obsessed with globalization and free trade that we lost sight of the damage it was doing to our communities. We need to get on with the work of America now, not live in the past.
Ultimately, tax reform is about more than just numbers. It’s about building a government that works for Nebraskans, one that fosters opportunity for families, businesses and communities to thrive. Nebraska must come first, and we cannot let political insiders or outdated thinking stand in the way.
Lincoln, NE