ERIKA PRITCHARD - Kearney Hub - Jun 8, 2018 Sen. Bob Krist of Omaha pointed the finger at Gov. Pete Ricketts Thursday for failing to provide property tax relief to Nebraskans.
“It’s clear that Governor Ricketts has not solved the property tax crisis in Nebraska,” Krist said at the Nebraska Association of County Officials meeting in Kearney.
The former Republican turned Democrat is running for governor against Republican Ricketts in the November general election.
“What was enacted in his (Ricketts’) term, the average homeowner in the state of Nebraska is getting less than $25 in relief in property tax,” Krist said.”
He said property taxes have increased an average of 57 percent the past 10 years, while median household income has increased 21 percent.
Krist referenced data from the Nebraska Department of Revenue and U.S. Census Bureau in saying property taxes in Buffalo County have grown nearly 90 percent during that same time period and, even worse, the Bridgeport area has seen increases of up 147 percent.
He said people often blame the counties for property tax increases, but it’s not the county officials’ fault. Rather, property assessments are controlled by state statute.
He took partial responsibility for initial property tax increases in 2009 because he was a legislator when the Unicameral cut $1 billion from the budget.
“We had to balance our budget, but we did that on your backs and we never restored that money in any way, in any semblance, as we move forward,” Krist said. “Your county aid — bye bye. Funding education — bye bye.”
That loss has unfairly been made up for at the local level. Krist said local school levies rose to make up the difference and county budgets were cut.
His solution is to follow a model that previously was working the state. “I’m going to go back to that point in time when our tax system was balanced,” Krist said.
He also promised to build up state reserves, which he said have diminished from more than $800 million to approximately $260 million.
Krist blamed Ricketts for dipping into that fund. “This governor has been pretty easy about taking money out of your savings account, and it’s wrong,” Krist said.
He believes the state needs to balance the three-legged stool of property, income and sales taxes, but not necessarily at the expense of raising taxes. “I’ll do what it takes to balance that budget, don’t get me wrong,” Krist said, “but that’s not the first choice, that’s never the first choice.”
His first choice is to look at other revenue streams, such as growing industrialized hemp and collecting internet sales tax from on-line retailers.
Krist hopes the new U.S. farm bill will declassify industrial hemp as a drug.
“Canada has almost a billion-dollar industry growing industrial hemp, he said, and what we found out in our studies in the last few years is that hemp puts back into the soil what corn and soybeans take up.”
Another revenue stream should be taxing online sales, Krist added, which could bring in a low estimate of $800 million.
He also believes Nebraska can save money by bonding some road construction and other infrastructure projects.
Krist’s example is the Heartland Expressway, a four-lane north-south highway through the Panhandle projected to cost more than $2 billion. He said using bonds to pay for such projects at current construction rates saves money in the long run.
“That money we can put back into the general fund and potentially restore the fund at the university level, K-12 or wherever those places were that we cut,” Krist told the Hub.
To provide property tax relief, he wants to look at a different assessment model focused on product. He said a bit problem for agriculture is that the current system sets values based on comparable sales.
“We need to go back and make sure that when 1 percent of ag property turns over in the state a year, 99 percent of you are not affected by that increase in valuation over a commensurate period of time. That’s not right, that’s not fair,” Krist told the county officials.
Because approximately 60 percent of property taxes are paid to schools, he’s looking at changing the Tax Equity and Educational Opportunities Support Act.
The act determines how much aid is given to Nebraska schools. Hub research on that issue found that most Hub Territory schools receive no aid because the formula has been tweaked many times over the years.
Krist said the way to tackle such issues is to listen to constituents and experts, something he said Ricketts isn’t doing.
“So the first thing that I’m going to do is make sure those legislators who are elected by you, not bought by me, are going to do your work in the Legislature,” Krist said. “And I’m going to keep my door open and make sure that we’re talking and that I’m there and accessible to them, and not traveling to Japan and doing whatever else he (Ricketts) did.”