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The Legislature's Revenue Committee is moving toward completion of a tax reform proposal that will be revealed to members of the Legislature later this month and probably pushed to early floor debate in January.

"We're close," Sen. Lou Ann Linehan of Elkhorn, committee chairwoman, said Monday. "I'm feeling pretty good, but we're not quite home yet."

The committee will huddle in Lincoln on Friday to move toward completion of a plan that is likely to be presented to all senators at a Legislative Council meeting, probably Nov. 22.

The proposal would deliver additional property tax relief, but probably not to an extent that would blunt an initiative petition drive that promises dramatic reduction.

Sen. Tom Briese of Albion, a member of the committee, fears the final committee product will be "underwhelming" in that regard, unable to pass the test of providing "meaningful and sustainable property tax relief."

Sen. Mike Groene of North Platte, chairman of the Legislature's Education Committee and a member of the Revenue Committee, says the end product will be "substantial," that is, enough to "make a dent" in property tax bills, but perhaps not enough to slow the ongoing petition drive.

Groene has teamed with Linehan in forging a new proposal through discussions with Gov. Pete Ricketts, who sharply opposed the committee's initial tax reform plan during the 2019 legislative session. 

"He's reasonable," Groene said. "He is listening." 

Hanging over the high-stakes legislative maneuvering is the ongoing petition drive to place an initiative on the 2020 general election ballot that would deliver more than a billion dollars in property tax relief through state income tax refunds or credits equal to 35% of local property taxes paid.

That, in turn, would tear a billion-dollar hole in the state budget and threaten funding for state programs and services. 

Briese wrote an op-ed this week that suggested "the 35 percent solution can be implemented in a reasonable manner," perhaps in part by "the closure of many tax loopholes for special interests."

"It can be paid for without jeopardizing the important services state government provides," he wrote.

Groene described the initiative proposal, which would embed the property tax reduction plan within the state constitution, as "the tool that may scare the status quo, scaring people to try to be reasonable."

In the Legislature, he said, "a perfect storm may be brewing."

Anger over property taxes, the ongoing initiative petition drive, economic distress in agriculture and pressure to enact new business development tax incentives before the current program expires at the end of next year will all be in play when the Legislature convenes in January, Groene noted.

Rural senators took a new business incentives plan hostage in the closing days of the 2019 legislative session, setting the stage for a showdown next year.

A decisive battle over tax reform in the first weeks of the 2020 legislative session would mark a sharp reversal of form. 

Big decisions like that usually are stalled and delayed until the final days or weeks. An early decision on the tax reform package and a new business tax-incentives package that has become tied to it could impact the rest of the 60-day session in terms of both content and mood.

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Reach the writer at 402-473-7248 or dwalton@journalstar.com.

On Twitter @LJSDon.

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