State Tax Reform

[Renovator2559]

It would be perfectly fine to tax fountain drinks "chemicals, poisons, high fructose corn syrup" the less children and teenagers drink this the better for their health.

[Big E]

Also, why are they assessing the restaurant tax on a fountain soda from a gas station? Sales tax is 7% within the city limits yet we're paying 10% when getting a cup of pop at HyVee.

There should be a 500% tax just for calling it a "cup of pop".

[TitosBuritoBarn]

Also, why are they assessing the restaurant tax on a fountain soda from a gas station? Sales tax is 7% within the city limits yet we're paying 10% when getting a cup of pop at HyVee.

There should be a 500% tax just for calling it a "cup of pop".

Hot take alert

[Garrett]

Also, why are they assessing the restaurant tax on a fountain soda from a gas station? Sales tax is 7% within the city limits yet we're paying 10% when getting a cup of pop at HyVee.

There should be a 500% tax just for calling it a "cup of pop".

Saying pop is the most distinctive part of my Nebraskan heritage

[Big E]

But.... "a cup".....?

[djc311]

But.... "a cup".....?

Container? 32oz? Large? Drink? Plastic beverage storage device?

To me, the container is a cup - not a measurable cup, but a cup that holds things.

[djc311]

It would be perfectly fine to tax fountain drinks "chemicals, poisons, high fructose corn syrup" the less children and teenagers drink this the better for their health.

I certainly wouldn't disagree that there's virtually no health value to a fountain drink - however, taxing it high because you don't want kids to get fat is not a good way to reduce property tax. His magic fix isn't going to pass anyway - as mentioned before, there's bipartisan support almost across the board on this so right now they're basically just wasting taxpayer dollars buy debating the topic.

[Athomsfere]

I would have to say you know the proposal the governor has is bad when both sides of the floor are against it. Not sure what the "fix" is, but doesn't appear to be this.

If his plan is to tax a distillery at 4x their current rate, what's going to happen to pop and candy? Alcohol and tobacco have age restrictions in place due to the product types. However, are they going to start taxing a kid getting a 32oz. fountain soda at the gas station $3, too? They already collect sales tax on this. I'm assuming because you're buying the cup... but it's self serve and as far as I recall, prepared food items are what should be taxed (ie, McDonald's burger, etc). Also, why are they assessing the restaurant tax on a fountain soda from a gas station? Sales tax is 7% within the city limits yet we're paying 10% when getting a cup of pop at HyVee.

This state's taxes are jacked across the board.

If the State was serious about tackling property taxes, they should really be looking at managing/capping/limiting valuations. That is in direct control of the State. It's one thing to have high property taxes based on the tax rate, it's another to have your taxes increase annually due to valuations because that is what is required under state law.

Too obvious, fair, and realistic.

I mean really it should be something like:

Valuations assessed fully improved before title / final sale of new construction.
Existing capped at 2% per year, or current rate of inflation (whichever is lower).
Sales of existing are re-evaluated at current market evaluations


Done.

[BRoss]

But.... "a cup".....?

Container? 32oz? Large? Drink? Plastic beverage storage device?

To me, the container is a cup - not a measurable cup, but a cup that holds things.

Just order a large, Farva.

[ita]

Nebraska business leader disputes urgency and size of property tax problem

Martha Stoddard
A key business leader told state lawmakers Monday that Nebraska’s property taxes are not as far out of whack as Gov. Jim Pillen contends.

Nebraska Chamber of Commerce President Bryan Slone made the argument during the first day of public hearings on bills introduced during the special legislative session that started Thursday. He testified on behalf of the state, Omaha and Lincoln Chambers of Commerce.

While Slone said he is a “very unhappy property taxpayer personally,” he cited figures from the national Tax Foundation showing property taxes account for a similar share of state and local taxes paid in Nebraska as in neighboring states and urged lawmakers to spend more time studying the problem before taking what he called risky action.

“We don’t have a $2 billion problem,” he said, referring to the amount of property taxes that Pillen has targeted for cutting. “There isn’t a need to reduce property taxes 40% to be competitive.”

[djc311]

Nebraska business leader disputes urgency and size of property tax problem

Martha Stoddard
A key business leader told state lawmakers Monday that Nebraska’s property taxes are not as far out of whack as Gov. Jim Pillen contends.

Nebraska Chamber of Commerce President Bryan Slone made the argument during the first day of public hearings on bills introduced during the special legislative session that started Thursday. He testified on behalf of the state, Omaha and Lincoln Chambers of Commerce.

While Slone said he is a “very unhappy property taxpayer personally,” he cited figures from the national Tax Foundation showing property taxes account for a similar share of state and local taxes paid in Nebraska as in neighboring states and urged lawmakers to spend more time studying the problem before taking what he called risky action.

“We don’t have a $2 billion problem,” he said, referring to the amount of property taxes that Pillen has targeted for cutting. “There isn’t a need to reduce property taxes 40% to be competitive.”

I'm glad they have several experts coming in to share different perspectives. However, I would state that we definitely have a property tax problem and it's a real deterrent to many that would like to own a home. I don't feel that owning an "average" home should be considered a luxury for middle income families in our country (particularly in Nebraska).

[Dundeemaha]

The answer for home ownership costs isn't a property tax cut, it's more supply. That will keep prices from rising as fast which will make purchases more affordable both for the mortgage and property tax.

[riceweb]

There's no world where supply fixes the affordability problem, because you can't build a home for less than $200k in materials + labor (and that's not counting the cost of the land). Any new construction home is going to have a property tax bill of at least ~$6,500 / year.

And we *want* property values to increase so that people can increase their wealth. Nebraskans lose buying power relative to the coasts, making some people feel "trapped" here because they have such little equity that they can transfer to a home in a high cost of living area. If we reduce property taxes, property values would increase by the leveraged equivalent of the annual property tax bill, making the average Nebraskan significantly *wealthier* overnight (note that their expenses won't actually decline, because the average homeowner will use the savings to size up their home).

We moved from the coasts back to Nebraska, and our tax bill increased dramatically. We pay more in property taxes, more in income taxes, and our sales tax amount is only negligibly lower. It was not an economically sound decision. We only moved back to be closer to family. The average Nebraskan that leaves to a place like Washington, Texas, or Florida (among others) will almost certainly never return because our tax structure is prohibitively high.

[Dundeemaha]

New home prices are not the floor for home values. New homes sell at a premium to existing homes, look at the differences in sale prices of infill townhomes in midtown vs surrounding 70-100yr old homes.

My home is (under)assessed at ~$285,000 and I pay $6,000/yr in property taxes, $500/mo. If I got a 30yr mortgage today 6.75% with 20% down the principal, interest and insurance would be just over $1,500/mo.

10 years ago homes around me were selling for $210-260k. Now homes around me are selling for $395-495k.

Yes we want property values to increase, but not to the intense amount of the last decade which is what is really pricing out home buyers not the 1/8 to 1/4 of the cost property taxes contribute. If Pillen's plan cuts property taxes in half and someone buys my neighbor's house. They will be paying a similar property tax amount to what I was paying 10 years ago but their mortgage and insurance will have more than doubled.

[Garrett]

My family sold my grandma’s 3 bedroom home in Northeast Nebraska that she and my grandpa bought 15 years ago for $79,000. It’s not a growing town in the slightest, and has a population of around 1,000 people. It sold for $179,000. There should be other options for growing wealth more broadly than just homeownership, because it will only ever be a raising ladder that will be harder to get on, especially as single family homes remain the most favored option in policy.

[Athomsfere]

There's no world where supply fixes the affordability problem, because you can't build a home for less than $200k in materials + labor (and that's not counting the cost of the land).

But that $200k is a ~$250k home for someone with $250k. Meaning you don't see an older ~150k sold for ~250k because someone can outbid the closer to the real value home.

You also generally want people with "housing" mobility to move. A couple entering their mid-careers and wanting kids should move up from their existing housing, leaving behind downmarket housing. A retiring empty nester household should move down freeing up upmarket housing.

Also inflation/ CPI. A house built in 1990 for ~$90k is the equivalent of ~$220 today.

Or real world:
https://beacon.schneidercorp.com/Applic ... 0639033038

Found this one built 1990 for $129.5. With CPI it should be ~311k - $330k but the assessed value is $365k. Or 10-15% over where you would want it to be IMO.

But there are other homes that have gone up much more in that same frame. I see one in Dundee that sold for 260k in 94, last sold in 2019 for $660k. Its assessed at $630k and likely would sell closer to a million dollars now.

When housing is constrained none of this works and the cost of housing skyrockets.

So yes, building housing is the only real fix for housing costs in the long run.

[riceweb]

Of course building is essential and I'm a strong YIMBY, but construction materials and labor are too high now for there to be any meaningful reduction in prices. The best anyone could hope for is that the rate of increase in prices slows.

But most of my critique of our property tax policy is about folks who have left the state and are absolutely priced out because our taxes are prohibitively high. I'm really not joking when I say we are tens of thousands worse off in Nebraska than if we lived in Washington, Florida, Texas... And we were nearly priced out the other direction when we first moved out of state. Because Nebraska property values are still much lower than other states, we had a very difficult time making financing work on a mortgage even though we carried a lot of equity with us.

My proposal is simple: reduce property tax rates, which will increase property values (both through extra demand from out-of-staters and also from folks diverting their savings to larger mortgages), which will in turn increase the amount of property taxes collected. This change will occur rather quickly, so a big portion of the reduction in property tax collections will be temporary. But in the long run, we will end up collecting almost the same total amount of property taxes, even as everyone becomes richer through higher property prices.

[Louie]

Of course building is essential and I'm a strong YIMBY, but construction materials and labor are too high now for there to be any meaningful reduction in prices. The best anyone could hope for is that the rate of increase in prices slows.

But most of my critique of our property tax policy is about folks who have left the state and are absolutely priced out because our taxes are prohibitively high. I'm really not joking when I say we are tens of thousands worse off in Nebraska than if we lived in Washington, Florida, Texas... And we were nearly priced out the other direction when we first moved out of state. Because Nebraska property values are still much lower than other states, we had a very difficult time making financing work on a mortgage even though we carried a lot of equity with us.

My proposal is simple: reduce property tax rates, which will increase property values (both through extra demand from out-of-staters and also from folks diverting their savings to larger mortgages), which will in turn increase the amount of property taxes collected. This change will occur rather quickly, so a big portion of the reduction in property tax collections will be temporary. But in the long run, we will end up collecting almost the same total amount of property taxes, even as everyone becomes richer through higher property prices.

Are there really that many people living in other states just waiting for property taxes to go down to move here?

No doubt a renter in Nebraska would benefit greatly from lower property taxes, if they’d like to buy a home. As would current owners, but I’m not sold that there would be a substantial outside demand for property here.

[riceweb]

It's not that there's a ton of demand, it's that even families that want to move back often cannot make it work because it's just not financially viable, in large part because of taxes. Majority of the financial hit for us came from taxes (and a smaller % came from lower wages by moving to NE).

[Louie]

It's not that there's a ton of demand, it's that even families that want to move back often cannot make it work because it's just not financially viable, in large part because of taxes. Majority of the financial hit for us came from taxes (and a smaller % came from lower wages by moving to NE).

I’m sure that’s the case for some, but I am skeptical of the numbers of folks that fall into that category.

[S.O.Boy]

No doubt a renter in Nebraska would benefit greatly from lower property taxes,

I don't believe most landlords will lower the rent. They will see less taxes as more profit.

[Louie]

No doubt a renter in Nebraska would benefit greatly from lower property taxes,

I don't believe most landlords will lower the rent. They will see less taxes as more profit.

I meant in the context of a renter that would like to be a homeowner and this would make that slightly easier. A landlord would never lower rent.

[ita]

I think this can go here:

Nebraska voters reject state funding for students attending private K-12 schools

Voters on Tuesday resoundingly rejected Nebraska’s new school voucher or scholarship program, steering public dollars spent to public schools.

Supporters of using state tax dollars to offset the costs of a private K-12 education have argued that families unhappy with their public schools need more options.

But rural and urban supporters of public schools, the Nebraska State Education Association and private foundations supporting public schools won the day.

Tim Royers, president of the Nebraska State Education Association, said he was proud to see right- and left-leaning counties agree that vouchers were the wrong choice.

“It confirms what we knew, the majority of Nebraskans don’t want public dollars going to private schools,” Royers said. “What really stood out to me is the consistency.”

It was a 57% to 41% margin to repeal the measure.

https://www.klkntv.com/nebraska-voters- ... de-margin/

[Stan]

One glimmer of good that came out of yesterday.