By Scout Nelson
Nebraska Governor Jim Pillen is facing opposition from some of his closest agricultural allies in the Legislature over his property tax reform ideas. He may need their support to pass these reforms during a special session expected this month.
Pillen plans to bring lawmakers back to Lincoln starting July 25 to enact property tax reforms. Among his ideas is removing sales tax exemptions for agricultural and manufacturing inputs like seeds, fertilizer, and chemicals. He suggests taxing these at a lower rate of 2 cents per dollar instead of the broader 5.5 cents per dollar.
Farm Bureau President Mark McHargue announced the group’s endorsement of then-University of Nebraska Regent Jim Pillen’s 2022 campaign for governor. (Aaron Sanderford/Nebraska Examiner)
Pillen believes this could save producers money if the state takes on a majority of local K-12 funding, potentially reducing some property tax bills by up to 60%. However, some farmers in the Legislature who supported Pillen’s property tax relief proposals during the spring session oppose removing sales tax exemptions on ag inputs.
Some lawmakers have questioned his "living and breathing" plan for not being finalized or released in writing, with some openly stating they will craft their own proposals. This fracturing could complicate Pillen’s path to find enough support to overcome a likely filibuster.
One of Pillen’s closest allies, the Nebraska Farm Bureau, is seeking to influence lawmakers with a new email campaign arguing that taxing inputs could harm farm families and increase prices for producers and consumers.
“Taxing inputs would only put Nebraska farmers at a major competitive disadvantage compared to other states that don’t,” the email states.
State Sen. Teresa Ibach, a farmer and rancher, expressed concerns that eliminating exemptions could raise taxes over time. She emphasized the challenge of finding 33 senators who agree on a path forward.
The Nebraska Department of Revenue estimated that exemptions saved taxpayers about $1.7 billion in 2022 for manufacturing components and another $2.1 billion for various agricultural exemptions.
Overall, the pushback from agricultural allies and legislators could jeopardize Pillen’s property tax reform efforts during the special session.
Photo Credit:pexels-nataliya-vaitkevich
Categories: Nebraska, Government & Policy