Omaha mayor ‘concerned’ about Pillen tax plan; some state senators say votes aren’t there

LINCOLN, Neb. (WOWT) - In the hours since Gov. Jim Pillen shared details about his push to reduce Nebraska property taxes by 50%, reactions have been coming in from organizations, state senators, and even the mayor of Omaha.

Pillen initially charged the Unicameral with coming up with a 40% reduction in property taxes. But the bill put forward failed in the spring session. The governor clarified Thursday that he’s now looking for 50% — with some getting back 65% or 70%.

Mayor Jean Stothert said she supports property tax reform but called out the lack of details coming from the governor and Elkhorn Sen. Lou Ann Linehan, one of the state senators who has sponsored the bills. The mayor says Pillen’s tax plans would be detrimental to city services.

“The plan presented today by Governor Pillen and Senator Linehan still does not provide enough specific information to anticipate how significantly the city budget and the services we are obligated to provide could be impacted. It certainly won’t be the only plan the Legislature will consider.

The City of Omaha receives 20.59% of the property owner’s total tax bill, approximately $226 million in 2024. We spend the majority of our property tax revenue on police and fire protection (2/3 of the General Fund budget) and roads.

The Governor claims windfalls to cities and excessive local spending have caused the problem. The City of Omaha’s average valuation growth since 2013 is 3.46%. I have a record of property tax levy reduction. I have reduced the City of Omaha property tax levy four times for more than 8% and will recommend our fifth and largest levy reduction when I present the 2025 city budget next week.

I certainly support property tax reform, however, I am concerned about the lack of thought, analysis or discussion with local governments as these potentially damaging plans and the unintended consequences are being considered.”

Some of the reaction from state senators has been harsh, to say the least.

Bellevue Sen. Carol Blood said she flat out isn’t buying it.

She also noted that the governor hadn’t formally set a date for senators to return for a special session.

“There’s been no call for a special session — and special sessions are really meant for circumstances that are urgent, not for do-overs when the governor cant get people behind a bill,” Blood said.

She also thinks Pillen doesn’t have the support he needs to put his plan into effect.

“Today, the press conference was very telling because he did a press release that said he and senators that support his bill would be at (Thursday’s) press conference, and you’ll note theres only two senators standing behind him,” she told 6 News.

Linehan and State Sen. Robert Clements of Elmwood stood alongside the governor during Thursday’s news conference.

Even some senators from the governor’s own political team aren’t behind his plan. State Sen. Julie Slama slammed Pillen in a tweet, saying “’The Plan’ robs Peter to pay Pillen.” She told 6 News the governor’s plan is simply “corrupt.”

“Pillen’s plan, based on leaked information, ends all sales tax exemptions except for his own business interestes. That’s corrupt. It’s robbing Peter to pay Pillen. ... Working Nebraskan will be taxed to death, then taxed for burial. three people who will profit from his schemes are Bill Gates, Ted Turner, and Jim Pillen.”

State Sen. Machaela Cavanaugh of Omaha said in a tweet that Pillen’s focus on supporting kids falls short in providing for the foster care system.

But Jim Vokal of the Platte Institute, the state’s only free market think tank, said the sorts of tax benefits Pillen’s business interests might enjoy aren’t necessarily bad for Nebraska.

“Our organization has advocated for many years to look at our sales tax system and use those revenues that come from eliminating those exemptions and lower state taxes,” he told 6 News.

The insitute believes the state is facing a property tax crisis.

OpenSky Policy Insitute said Nebraskans should be very concerned about the plan and its potential repercussions.

“Fiscal year net receipts came in very close to projections, meaning predictions were relatively accurate and the Legislature had a good line of sight into how much money was on the table. Nonetheless, it still found itself needing to raid various cash funds last session to meet its existing obligations — a budget move that historically only happens in emergencies,” Executive Director Dr. Rebecca Firestone said in a written statement. “With those cash funds tapped and a projected $1.18 billion less to work with, we’re worried the Governor and Legislature may look to cut essential services such as child welfare or health care just to keep the budget balanced.”

She said that the state would do better to focus on items with larger financial impact, like the canal project, the new state prison, or corporate income taxes.

“A 1.6% decrease in sales and use tax receipts and an 11.5% decrease in individual income tax receipts paint a picture of an everyday Nebraskan who is making a conscious choice to spend money conservatively and potentially defer larger purchases until a later time,” she said in the statement. “We believe Nebraskans expect their legislature to manage the state budget in kind, taking a look at large expenditures like corporate income tax reductions, the Perkins County canal and a new state prison, and determine if they are absolute necessities at this time.”

John Gage, director of the Nebraska chapter of Americans for Prosperity, said in a statement that Pillen’s plan has “massive costs” and would implement “the largest tax increase in state history” — and that he didn’t think the plan would pass.

“Governor Pillen’s scheme to shift more taxes onto working and middle class Nebraska families was defeated once, and this special session will be no different.

While other Republican governors are working to make life more affordable for their constituents facing sky-high living costs under the Biden economy, Governor Pillen is pushing a plan that would be the largest tax increase in state history.

AFP-NE will continue educating voters about the massive costs of this tax scheme and make sure the lawmakers who support it are held accountable.”

While education funding has been a major concern amid the state property tax reform debate, Omaha Public Schools wasn’t saying much about Pillen’s pitch on Thursday, officially declining interviews on the matter for the time being.

“Because legislation can change significantly when it is under consideration, we generally do not comment on specific pieces other than our district’s official position, which is documented in Board of Education agendas through our legislative matrix.”

Pillen’s announcement on Thursday comes after the governor has been holding town halls around the state in recent weeks promoting his plan. He said he has also been having regular meetings with senators focused on the issue.

Though confident he has the votes to pass tax reform, Pillen did not have any details about when he would formally call the special session — which isn’t currently on the official legislative calendar — or how narrow the focus of the proclamation, but he said it will begin next Thursday, July 25, and would likely revolve around bills introduced by the appropriations and revenue committees.

“We won’t be scratching to get to 33 votes,” he said.

He did say all 120 exemptions are on the table but that groceries and medicine won’t be touched.

Candy and pop don’t fall into the “food” category.

“Just so you know, pop and candy — when the Pillen boys grew up, if we got a pop, it was a heck of a day. And you know how many times we got a pop and a candy bar? ... It’s not a food group for crying out loud,” the governor said.

The owner of Old Market Candy Shop told 6 News that the governor’s sales tax on candy and pop would mean a little extra work.

“We’re probably not upscale enough to have computers. We have a traditional cash register at the moment. It’s to zero tax, and we’d have to reprogram it,” he said. “We’ll find the manual. We’ll learn how to do it.”

A group of senators is planning to hold “listening sessions” on Monday and Tuesday ahead of the special session. The community meetings will be held in Omaha and Lincoln, which weren’t stops on the governor’s tax plan tour across the state this summer. He did hold his first “town hall” in Bellevue, which he announced two days prior.

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Assistant News Director Katherine Bjoraas and reporter Bella Caracta contributed to this report.

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