A guide to Nebraska’s property tax relief special session beginning Thursday

Gov. Jim Pillen listens to a local farmer discuss possible impacts of proposed property tax reform ideas at a town hall in Pillen’s hometown of Columbus on June 26, 2024. In front of Pillen is State Sen. Mike Moser of Columbus. State Treasurer Tom Briese, left, also watches during the event. (Zach Wendling/Nebraska Examiner)

LINCOLN — Thursday is officially game day for Gov. Jim Pillen’s special session on property taxes: a high-risk, high-reward moment for the first-term governor who has vowed, if necessary, to keep lawmakers in Lincoln “ ‘til Christmas.”

State senators will convene at 10 a.m. Thursday for the first of three days of bill introductions, all related to property tax relief. When lawmakers adjourned April 18 without passing legislation to curb the property tax , Pillen declared they’d be back later in the year.

“Enjoy halftime. We’ll see you again here soon,” he said in his end-of-session speech, promising a special session.

For nearly one-third of state legislators , this session could be their final showing, most because they are term-limited after eight years of service.

Here’s what to watch for heading into the special session.

Will lawmakers debate, or go home?

First up on the docket is the question of whether lawmakers will stay in Lincoln, or if they will vote to adjourn “sine die.” That vote would send lawmakers home and put the ball back in Pillen’s court should he choose to call another session.

Led by State Sen. Justin Wayne of Omaha, lawmakers in a Tuesday night email thread summarized months of unease over the session and criticized Pillen for not calling the special session or clarifying its scope in a timely manner.

“We are not his slaves to be summoned at his whim,” Wayne wrote to his colleagues, detailing personal and career commitments he and other legislators needed to consider.

The governor officially issued that document Wednesday afternoon, less than 24 hours before the session is set to start. That’s the latest proclamation for any special session in 40 years.

Wayne suggested that lawmakers adjourn “sine die” and demand at least a week’s notice before any special session begins. Or, he suggested, the body should recess for one week, until Aug. 1, so senators would have more time to consider introducing legislation.

Usually, a “sine die” vote comes at the end of a legislative session and is a ceremonial formality to end the session. But Thursday morning could be a test vote.

At least 25 lawmakers must come to Lincoln for the session to begin, and if someone offers the “sine die” motion, it is not debatable. It requires a simple majority of those present.

A new record to introduced bills

Multiple lawmakers told the Nebraska Examiner that at least 80 bills were being prepared ahead of the special session. If all or most are introduced, it could set a record.

The previous record for a special session is 52 bills , which came in 2002 during a special session to address appropriations, cash funds, state aid to local governments and more.

Most lawmakers have not shared concrete details of what they might bring to the table, some out of concern that Pillen’s proclamation could have purposefully excluded their ideas.

Senators will determine what bills fall within the scope of the proclamation.

The 10-member Executive Board will determine which of 14 standing committees each bill or policy resolutions should be sent to.

After being assigned to a committee, all proposals must receive a hearing within five calendar days, per the Legislature’s rules . Speaker John Arch of La Vista said Wednesday he will better understand how many days of hearings will take after bill introductions, though he’s budgeted three days beginning next Monday.

Floor debate could in theory start next Thursday, Aug. 1, Arch said, though he stressed that scheduling depends on the number of bills introduced and the work of the various committees.

“Because it’s so focused, there’s probably going to be more committee work on the topic than in a general session,” Arch said. “I don’t anticipate bills being kicked out quickly.”

If a committee doesn’t take final action on a bill within two legislative days after its hearing, the rules allow lawmakers to seek a vote that could advance a proposal to the floor for future debate. That would require at least 25 votes.

What is Pillen proposing?

Once lawmakers get to floor debate, Arch said, “full and fair debate” will mirror his policy in the regular session last spring, allowing debate to go to a maximum of eight, four and two hours on three successive rounds of debate.

At those points after a “filibuster” to prolong debate, a cloture motion could be offered to end debate and vote on advancing or passing the bill.

Cloture requires at least 33 votes among the 49 members. Bills or resolutions that are not filibustered require at least 25 votes.

Pillen could run into problems with various lawmakers who have cast doubt on his ideas , which include:

• Placing hard caps on county and municipality property tax collections, either 0% (in times of deflation) or matching the consumer price index, unless 60% of voters agree to override the caps. There would be exemptions for growth and public safety needs.
• Funding more than 80% of local K-12 property tax burdens by the state, about $2.6 billion. School tax rates would be reduced from a maximum of about $1.05 per $100 of valuations to 15 cents, 7.5 cents and 0 cents in a three-year period.
• Retooling existing property tax relief programs, including homestead exemptions and property tax credits. A spokesperson for the governor said there would be no cuts to existing homestead exemptions.
• Removing more than 100 sales and use tax exemptions. Food, medicine and raw agricultural and manufacturing materials, along with more than 100 other goods and services, would remain exempt. Most new items would be taxed statewide at 5.5 cents per dollar purchase, plus local taxes between 0.5 and 2 cents; agricultural and manufacturing machinery and equipment would be taxed at 4 cents per dollar purchase, with personal property taxes on those items removed.
• Raising “sin” taxes on cigarettes, candy, pop, vaping, spirits, keno gambling, games of skill and consumable hemp.

Lawmakers to watch

Among the lawmakers to watch are the chairs of the three committees where legislation is likely to be referred: State Sens. Lou Ann Linehan of Elkhorn, who chairs Revenue; Rob Clements of Elmwood, who chairs Appropriations; and Dave Murman of Glenvil, who chairs Education.

Those three plus 14 other senators were part of a task force working with Pillen on his ideas this summer: State Sens. Joni Albrecht, Eliot Bostar, Wendy DeBoer, George Dungan, Steve Erdman, John Fredrickson, Ben Hansen, Teresa Ibach, Mike Jacobson, Kathleen Kauth, Mike McDonnell, Fred Meyer, Merv Riepe and Brad von Gillern.

Clements and Linehan joined Pillen in unveiling the outcome of that task force and 26 town halls across the state in May and June, which did not include the state’s largest cities of Omaha and Lincoln.

“Every senator, if you look at their campaign material, would say property tax relief is a high priority for them,” Clements told the Examiner last week. “I think it’s time for senators to step forward and do something about what they’ve been promising.”

However, not every task force member is in agreement on next steps, including Riepe and Dungan.

Riepe said last weekend he doesn’t “believe in the ‘jump and the net will appear’ philosophy.”

Multiple lawmakers have criticized Pillen, saying he and his family stand to gain financially as part of the plan, stating that lower-income Nebraskans could end up paying more in sales taxes:

• State Sen. Danielle Conrad of Lincoln: “This plan is indeed nothing more than a reverse Robin Hood scheme representing perhaps an unprecedented tax increase and massive tax shift.”
• State Sen. Julie Slama of Dunbar: “That’s corrupt, and we can’t have a tax plan that robs Peter to pay Pillen.”

Wayne has said a different proposal, relating to lawsuits alleging neglect on the part of political subdivisions in cases of child sexual assault or child abuse , needs to be part of the special session . Pillen vetoed that proposal in the spring, in part citing taxes, which could be the foot in the door to address the issue during the special session.

Erdman has promised that legislation similar to the ballot initiative to eliminate property, income and corporate taxes — the “EPIC Option” — will be introduced during the session.

Also something to watch is how lawmakers’ positions may shift from the 28-14 split from Legislative Bill 388, the previous Pillen-led proposal in the spring8. Five more lawmakers were “present, not voting” and two were “excused, not voting” when LB 388 was considered. The split wasn’t geographical or ideological.

Despite pushback, Pillen has remained confident that he will have enough bipartisan support to get something accomplished in the officially nonpartisan Legislature’s special session.

He says that’s because it’s not about what lawmakers say, it’s what they do.

“When it comes time to push that button [for the bill], it’s one heck of a responsibility to not push green,” Pillen said. “You push red, there’s going to be tough consequences.”

Special session costs, length

Of the 36 special sessions since the Unicameral formed in 1937, special sessions have ranged from six to 24 days. Twenty sessions lasted seven days and just one was six days.

Each day lawmakers are in session brings a cost to taxpayers. Pillen has said those expenses are “pennies compared to our property tax increases,” which went up $286 million in 2023.

During a special session, there is no specific end date, unlike in regular 90-day or 60-day sessions. That means lawmakers could theoretically remain in session until the next Legislature begins, or “ ‘til Christmas” as Pillen has threatened to ensure his relief goals are achieved.

The most recent cost estimates provided to the Examiner were in mid-May:

• Five days: $79,686 ($15,937.20 per session day).
• Seven days: $130,165 ($18,595 per session day).
• Ten days: $174,876 ($17,487.60 per session day).

“Special sessions aren’t 10-day sessions,” Pillen told school administrators Wednesday in Kearney. “This session will last as long as it takes to fix the problem.”

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