BEATRICE – Saying Nebraskans are sick of the conversation, Governor Jim Pillen said it’s time for the State of Nebraska to fix its tax system to relieve the burden of property taxes.

Pillen held another of his townhall meetings Friday at the Beatrice Public Library, to get input from residents about tax and spending issues.
Pillen said he plans to call a special session late this summer to pass a comprehensive tax reform package….something that failed to happen in this year’s regular legislative session when the clock ran out and a plan under consideration lacked support.

"It's going to be really hard to get done before the Fourth of July and I've made commitments to sell Nebraska around the world, so it's going to be after the middle of July to before school...that's going to be the goal."

Pillen said the benefit of a special session will be the ability to focus on one issue. He told an audience at the Beatrice Public Library Norva Price Room that the effort to reduce property taxes will take spending restraint, removing sales tax exemptions and instituting a hard cap on local governments to help hold future spending down.  The Governor said a solution to property tax relief this session ran into competing issues.

"Way too many bills in the session and then there was gobs of Christmas-tree stuff at the end. There was just never enough time to have conversations and the lobby group overran everybody...and so, is it easy? No, if it was easy it would have been solved a long time ago. But we're optimistic, we've got great partners in the unicameral that believe property tax is the biggest issue holding us back from greatness and breakthrough in Nebraska. I'm confident that we'll get it through."

Pillen said during the interim, there’s been some great out-of-the-box conversations about ways to reduce property taxes…including focusing on how public education is funded in Nebraska.

"Let's figure out a way that public education is paid one-hundred percent by the state. The TEOSSA formula is really complicated and I think adds more funding that doesn't create value. Those are good conversations....certainly, a broad tax base and lowering our tax. That's a conversation that I think is catching some wind and people are saying okay, that makes sense."

Lawmakers have passed measures to boost the state’s share of education funding and have approved replacing property taxes community colleges use to fund operations, with state aid.  The original tax reform plan that included hiking the state sales tax ran into stiff opposition at the end of the session.
Local governments critical of a hard spending cap point out that operations are affected by inflation, and the cost of things has been elevated. The Governor counters that looking back over the past two decades, half of that time featured very low inflation.

"We had ten years of deflation....and yet we increased our spending five and six percent every year. We've grown government way too much in the state. We started doing things that are not needed by Nebraskans, but are nice. We've got to reign it in. I think a thought of is a cap of "x" and a CPI so that during those extraordinary times....hopefully the federal government will stop printing money and that will certainly reign in inflation...where we can stay focused on decreasing our spending."

Asked about the potential of a proposal to change the method for allocating electoral votes, Pillen said that’s an issue to take up at a later time if there is “a signal from the legislature” to do so.

Pillen told the Beatrice audience Friday that another component of tax reform is eliminating mandates passed on to local governments that put pressure on their budgets.