After praising Nebraska lawmakers for their accomplishments during this year's legislative session, Gov. Jim Pillen repeatedly derided the Legislature's “failure to act” on property tax relief and pledged to call “as many sessions as it takes” for lawmakers to deliver reduced property taxes this year.
In a speech to lawmakers on the legislative floor Thursday, which marked the last day of this year's 60-day legislative session, Pillen called the Legislature's inaction on property taxes "unacceptable" and made clear that he will call senators back to Lincoln for a special session later this summer to take another run at the issue.
"Every single Nebraskan sees spiraling growth in property taxes, yet this Legislature failed to act," the governor said, later adding: "With this Legislature’s failure to enact meaningful property tax relief, we’re behind at the end of the first half, but we still have a second half to go.
His speech — which shifted from glowing praise to harsh criticism in a matter of minutes Thursday afternoon — came mere hours after his scaled-back plan to reduce Nebraskans' property taxes failed to clear the final hurdle in the Legislature on Thursday, sinking the first-term governor's priority legislation and dealing Pillen the biggest loss of his political career.
The Legislature skipped over LB388 — the bill that contained Pillen's narrowed tax reduction plan after the governor initially pledged to reduce property taxes by 40% — after it became clear through two hours of debate Thursday that the bill did not have support from enough senators to overcome a filibuster.
As it became clear Thursday morning that Pillen's plan would not become law, senators had broadly accepted that they would be asked to return to Lincoln this summer to take up property tax relief.
The governor began to follow through on that pledge in his speech to lawmakers Thursday, though he did not say when he would ask lawmakers to return. He urged them to "enjoy halftime" with another period of lawmaking yet to come.
Speaker John Arch of La Vista seemed to push back against Pillen's characterization of the session in remarks that immediately followed the governor's speech, telling his colleagues: "We did accomplish a lot. And we should be proud of the work we have done."
Other lawmakers reacted skeptically to Pillen's announcement, which was delivered alongside critical remarks that marked an unusual end to an annual end-of-session speech that traditionally strikes a lighter tone than the governor offered Thursday.
"I think it's just a rather odd political choice that the governor spent most of his farewell address today focused on his losses, rather than on the many achievements that we were able to deliver for Nebraskans together," Sen. Danielle Conrad of Lincoln said. "I think typically a legislature does not appreciate being lectured by other branches of government about what we should or should not do.
"But we're all eager to roll up our sleeves and come back and find commonsense solutions during (the) special session."
Omaha Sen. Justin Wayne offered a less optimistic assessment of the looming special session: "He has to find 33 votes."
Earlier in the day, before Pillen had confirmed that he would call a special session, but as it became increasingly clear that he would, conservative Sen. Steve Erdman of Bayard cautioned that it won't be any easier for Pillen and his allies in the Legislature to find a filibuster-proof majority to support his tax plan in August than it was in April.
"I'm gonna give you another little bit of advice here: Not again this year will there be 49 senators in this room," Erdman said. "You call a special session, there will not be 49 of us here."
The mixed reactions to Pillen's announcement reflect the dicey politics that surrounded the governor's tax proposal, which was championed by Sen. Lou Ann Linehan of Elkhorn and would have added taxes on a variety of goods and services and used the revenue to help pay for new school property tax credits.
The latest version of the bill (LB388) combined with tax relief measures passed last year would have reduced property taxes by an estimated 22%, Pillen's staff had said — but would have offered no net savings to property owners who were already taking advantage of income tax credits offered to state property taxpayers through a program that would have been eliminated by LB388.
Under the bill, vaping products would be taxed at 20%, consumable hemp products would be taxed at a 25% rate and the tax on a pack of cigarettes would be have increased by 36 cents.
The bill, too, would have imposed sales taxes on soda and candy, veterinary care and other services for pets, dry cleaning and lottery tickets, among other things.
Conrad had warned Thursday that senators who voted for the bill would be supporting the largest tax increase in state history.
And opposition to the measure wasn't partisan. Sen. Julie Slama of Dunbar, a conservative, led Thursday's filibuster against LB388 while Sen. John Lowe of Kearney, another conservative, also railed against the bill.
"This bill would probably benefit me if I would vote for it," Lowe said amid Thursday's debate. "But I'm not gonna vote for it because I made a promise. I made a promise to the people that I would not vote for a tax increase on anybody, which a tax shift does. And that's what this is: a tax shift."
Linehan's Revenue Committee advanced LB388 to the full Legislature with a 1-cent sales tax increase and a shortened list of goods and services to be taxed, but a sales tax hike proved too unpopular to weather intense lobbying efforts from business groups who opposed the move.
And even the final version of LB388 — which did not include a broad sales tax hike but did include a 7.5% excise tax on ads that run on some state broadcasting outlets and social media websites — faced a last-minute advertising blitz on state radio and TV stations and in newspapers across Nebraska, warning that the tax would “destroy many small businesses."
Such pressure angered some of the bill's supporters, including Sen. Brad von Gillern of Elkhorn, who said that "lie after lie after lie" had been told about LB388 this week.
The bill had mustered 33 votes to overcome a filibuster earlier this month, but Sen. Steve Erdman of Bayard, who was among the 33 senators who helped the bill overcome the second-round filibuster, signaled Thursday that he would not support the bill again.
As it became clear that the bill would not survive the filibuster, Linehan asked the Legislature to skip over the bill, ensuring it wouldn't be made law this year — and clearing the way for Pillen to call a special session.
The looming special session will also afford one last hurrah to a group of 15 lawmakers who are term-limited this year and who marked what was supposed to the last day of their final legislative session together Thursday with farewell speeches that ranged from comedic to tearful as they said goodbye to their colleagues who they will, in fact, see again.
"I had farewell at the end of my remarks," Arch, who will return next year, said Thursday. "But, perhaps, it's, 'see you soon.'"
In his address to senators on Thursday, Gov. Jim Pillen called inaction on property taxes "unacceptable" and made clear that he will call senators back to Lincoln for a special session later this summer.