The Nebraska state legislature concluded its special session on Tuesday by approving a heavily scaled-back property tax relief plan, amid calls for the legislature to revisit the issue next year.

Shortly after lawmakers approved the scaled-down plan and voted to end their special session, Gov. Jim Pillen called a press conference to thank them for their work. The governor had called them together to discuss his plan, which he said would cut property taxes in half.

Instead, they decided to cut property taxes overall by about 3%, which wouldn’t affect most people. For those who would be affected, it’s still good news, Pillen said.

“This is a big deal. We’re making sure that 45 percent of Nebraskans who can’t afford an accountant or can’t afford this or that will get a 20 percent property tax cut,” Pillen said.

The bill would expand an existing property tax credit and replace an income tax credit.

Currently, property owners pay their bill and can then claim a credit for part of it when they file their income tax return, reducing their tax liability. Bill LB34, passed by Parliament, would reduce property tax bills when they are delivered, rather than forcing people to claim a credit later.

The cost of the expanded credit would be approximately $185 million, which would be financed by using unused funds from state agency budgets.

Pillen had originally proposed a much larger cut, financed by imposing a sales tax on currently untaxed goods and services – from soda and candy to auto and home improvement items – and higher taxes on alcohol and cigarettes. But that faced a wave of opposition. Pillen blamed special interest lobbyists for getting senators to vote against his plan.

“What interest groups and associations have done in their own interests and not in the interests of the people of Nebraska has put enormous pressure on certain people,” he said.

But Senator Danielle Conrad, one of the leading critics of Pillen’s proposal, said the burden of the new taxes would be placed on people who could not afford them.

“Nebraska’s working citizens and retirees are not special interests and are not represented by lobbyists,” Conrad said. “They are represented by state senators like me and the group of state senators from across the political spectrum who said no to the pill plan.”

Further information from the special session of Parliament:

Senators advance property tax credits, consider major changes

Lawmakers are divided on whether to do something or try more

The legislature is seeking budget cuts

Legislators push forward significantly reduced property tax bill

Parliament prepares important vote on property tax for Tuesday

Senators continue to discuss taxes

Special session debate: Should there be a special session at all?

In Tuesday’s debate, Senator Mike McDonnell supported the bill that passed, but said lawmakers need to do more.

“Do I support LB34? Yes, because it’s something,” McDonnell said. “It’s definitely not nearly enough. And I don’t want to stop working now while I still believe we have a chance with the people in this room, because the people I talk to from my district and across the state are saying, ‘You have to do something now. We can’t wait any longer.'”

Still, senators rejected last-minute proposals to do more. Among the options was an amendment by Senator Justin Wayne that would have eliminated the sales tax on residential utility bills. It would have offset revenue losses from taxing services such as charter flights, lobbying or dry cleaning. Wayne acknowledged that his proposal deviated from the main theme of the session, but insisted it would help.

“I’m not going to say it’s a property tax cut, because it’s not,” Wayne said. “It’s a tax shift toward getting rid of electricity, which helps everyone, not just property owners.”

Senator Rob Clements said Wayne’s proposal comes too late.

“It should be considered in the future, but not as a last-minute addition to this bill,” Clements said.

Another proposal to ask voters about a constitutional amendment that would allow a lower tax assessment of home ownership also did not find sufficient support.

Senator Lou Ann Linehan, who led the push for Pillen’s proposals, said she had hoped for more, but the adopted proposals contained some good elements.

“It brings more relief, so it’s a step in the right direction,” Linehan said. “It brings relief to people who aren’t taking advantage of it, which is very important. There are caps in place so it can be stopped – slowed down. We’re not going to stop the increases, but hopefully slow them down. And finally, it has the potential to bring more if our revenues increase, which I believe they will.”

The bill caps annual property tax increases for counties, cities and villages at the level of inflation, as measured by an index that tracks cost trends for states and localities. According to the Federal Reserve, that index has increased an average of nearly 4% per year over the past 20 years, compared to 2.5% for the Consumer Price Index.