Aaron Sanderford
LINCOLN — Nebraska Gov. Jim Pillen pushed his property tax relief chips to the middle of the Legislature’s poker table Monday, staking his political reputation on state senators passing structural changes that cannot be easily undone.
He has held listening sessions. He has rallied supporters. He has funded polls and mailers. He has paid for bulk text messages. He has held secret meetings with select state senators and talked to reporters. He has pressured allies and enemies alike, lawmakers say.
Pillen’s approach to addressing what he calls the “property tax crisis” has left him on a bit of a political island as his proposals need public defenders and pathways forward.
He will have his defenders, including State Sens. Brad von Gillern and Kathleen Kauth of Omaha, two members of the Revenue Committee that have helped to craft the tax proposal. But his opposition is not simply partisan in nature. Republican State Sen. Julie Slama of Dunbar has said she won’t and can’t vote for what she describes as a major tax increase.
“I can’t support a plan like this,” she said. “I just can’t.”
Over several weeks of reporting, senators who have tried to work with Pillen on changes described meeting with him as being like running into a brick wall. He listens. He nods. And then he tells you why what he has proposed is better, several senators said.
sked about the stakes he faces personally and politically from passage or failure of meaningful property tax relief, Pillen said, “I don’t think about those things. I just am focused on doing what we believe is best and what the people need.”
“I’m very, very pleased how hard the majority of the Legislature is working to find solutions,” he said. “Human nature is … we don’t like a lot of change, and we’re pretty selfish. So we’ve got a lot of those things to work through.”
Gambling a second term
The first-term governor is gambling his chance at a second term on whether he can persuade enough senators to pass his vision of tax relief during the special session he called.
Pillen told the Examiner on Monday he wants any plan to include front-loading of the state’s income tax credits for property taxes paid. He said he wants spending caps or controls. And he wants the state to take over more funding for K-12 schools.
The latest proposal he favors includes each of those concepts and more parts of his original plan. The various parts were shoehorned into Legislative Bill 34 on Monday by State Sen. Lou Ann Linehan of Omaha and the Revenue Committee. Debate by the full Legislature begins Tuesday.
Pillen said his North Star for property tax relief is making sure young people can buy a first home, helping families afford a home and ensuring that senior citizens can stay in their homes. That should be something on which all Nebraskans agree, he said.
Debate over education costs
Like other owners of agricultural land, Pillen wants the State of Nebraska to shift more of the tax burden from land taxes to sales taxes. He runs a hog operation based in Columbus.
People who know and have worked with Pillen say it makes sense that he would wager the political capital he earned from his election win on reaching this point. He has long complained about the unfairness of the state relying on agriculture to pay for schools.
Farmers, ranchers and breeders account for significant portions of property tax payments, particularly those in rural school districts. And more than half of the $5.3 billion property tax cost Nebraskans pay comes from funding schools.
Pillen denied that he has any personal interest in making sure a property tax plan benefits him and his businesses, as some of his opponents have alleged. He said he would not have been elected governor if he were out for himself.
He did not discuss the specifics of his property tax plan during any of the 2022 campaign stops the Examiner attended. He did discuss the need for the state to fund more of K-12 education rather than relying so heavily on local property taxes.
Agricultural interests, including the Nebraska Farm Bureau, the Nebraska Farmers Union and others have argued that the state should step up and fund more of the load of K-12 education, pointing to a provision of the state constitution.
“I’m focused on working for Nebraskans that work their tails off every day, that don’t have lobbyists,” Pillen said. “They need a voice, and I’m going to work really hard to make sure they have a voice.”
A challenger could be emboldened
The Farm Bureau did not return a call Monday seeking comment about the latest tax plan. The group opposed Pillen’s initial proposal for taxing agricultural and manufacturing machinery. The Revenue Committee this week decided to keep the state’s existing sales tax exemptions on both items.
The organization took the rare step of endorsing Pillen during the 2022 Republican primary election against multi-state agribusinessman Charles Herbster, whom Pillen defeated.
Herbster has said he is still thinking about whether to make another run for office. He said he had considered running for U.S. Senate against former Gov. Pete Ricketts but didn’t. The other office he has said he would consider was governor.
Political consultants told the Examiner they think that if Pillen falls short of the public expectations he has set for property tax relief, he risks making himself vulnerable in a 2026 GOP primary to a self-funded or a well-known candidate.
The governor has spent months telling Nebraskans he wanted to make sure they felt tax relief, proposing to offset 40% or 50% of property tax bills. The latest plan would offset less than a third, based on early estimates.
Questions about process, renters
Several senators who have opposed Pillen’s proposals, including State Sen. Machaela Cavanaugh of Omaha, said he is trying to make life more expensive for people in her district, that people who can afford it the least might pay more in taxes. She said the governor is also trying to do too much too fast in a special session instead of a regular session, particularly addressing school funding changes that touch every person in Nebraska.
Pillen, she said, is out for personal and professional gain.
“Being singularly focused on property taxes is never going to be successful for anyone because it’s so much bigger than that,” she said. “It’s a holistic view of how do we fund government, of what is the role of government?”
State Sen. Justin Wayne of Omaha, who has expressed some openness to Pillen’s proposals, said he can’t support any proposal that doesn’t include more significant relief for renters, including a fallback position being discussed.
He said Pillen’s plan doesn’t have the votes. And he called on his fellow Democrats to come back to the table.
“We can do better,” he said.
State Sen. Steve Erdman of Bayard, a Republican, questioned the order in which Pillen pursued the special session. He said the senators Pillen handpicked to work on a proposal should have held their meetings and drafted and shared a potential bill with all senators in early August.
That would have given lawmakers time to give the select group feedback so they had a consensus proposal before calling the Legislature into special session. Instead, he said, the process has seemed chaotic.
“They’re doing all the negotiations that should’ve happened before we met, they’re doing it during the special session,” Erdman said. “They’re doing it backwards. We should’ve gotten a consensus on what we wanted to do.”
Linehan defends Pillen’s work, committee efforts
Linehan, who has prodded her colleagues to support Pillen’s proposals, expressed frustration Monday that some senators have stopped negotiating.
“It makes no sense,” she said. “If you’re doing the right thing, you’re giving the schools more money. You’re lowering property taxes. You’re doubling the earned income tax credit. It’s not about doing what’s right — it’s raw politics.”
Linehan said Pillen has worked “as hard as any governor I’ve ever seen” on this proposal. She said he’s been clear about his priorities and has at least two more years to reach his goals. He’s not limited to a single special session to accomplish his goals, she said.
She said negotiations and work will continue behind the scenes until lawmakers settle on whatever can reach the 33-vote threshold for passage.
State Sen. Tom Brewer, whose LB 34 is the current vehicle for property tax relief, said he knows the governor is in a difficult spot but credited him for taking on an issue too many others have avoided. Brewer represents north-central Nebraska.
Pillen has to sign off on backup plans
Pillen would not say Monday whether he would sign incremental steps toward his goals. Senators have told him and his staff they lack the 33 votes to overcome a filibuster, meaning his latest preferred proposal appears poised to die Tuesday after eight hours of debate.
He declined to say whether he might call senators back into session if they don’t pass reforms he considers sweeping enough.
“I obviously put out the plan I believe in exactly where that goes,” Pillen said. “What that means when it gets to me, we’ll decide that at that time. … I don’t get involved in speculation. There’s too many moving parts.”
He said the goal is making the state more competitive when a business owner or family is looking at relocating to Nebraska.
“I still have faith that everybody in this Unicameral knows what a crisis the property tax crisis is and that, in the end, then the games are going to stop and they’ll do the people’s work,” he said.
Paul Landow, a retired political scientist from the University of Nebraska at Omaha, said Pillen is about to learn either the price or payoff of raising public expectations on an issue people care about as much as property taxes.
Said Landow: “He will either be the hero who did it or the bum who couldn’t get it done.”