Whether they are in a special session, preparing for one, or gearing up for 2025, states across the country are focused on key tax disputes. Property tax in particular remains a top issue. Nebraska Lawmakers are in the thick of it, debating a key—and now slimmed-down—version of a proposal that would lower property taxes by expanding the sales tax. Colorado Politicians are considering a special session if they can negotiate a deal with the sponsors of the property tax initiatives that would result in lawmakers agreeing to a smaller property tax cut in exchange for the initiative sponsors withdrawing their measures. Finally Montana Governor Greg Gianforte is expected to receive the long-awaited list of recommendations from his property tax task force, with a new property tax exemption being mentioned as a key proposal.

Key government tax proposals and developments

• NEBRASKAThe House’s tax-related special session is off to a wild start: Committee hearings on all 81 bills and 24 proposed constitutional amendments have concluded, and lawmakers are now moving to full-house debate. That debate began with frustration over what they perceived as inappropriate pressure tactics, disrespect for the Legislature, and lack of transparency from Gov. Jim Pillen and his allies, especially given that the governor himself would benefit hundreds of thousands if his preferred plans were implemented. That preferred approach — lowering property taxes by raising sales and “sin taxes” and severely limiting local governments’ budgetary authority — was not well received at its own hearing. Gov. Pillen has now turned to a slimmed-down version that includes a special provision to exempt law enforcement agencies from budget cuts. Lawmakers will begin debating that version as soon as it is released, possibly along with many other ideas that have been introduced as bills, such as legalizing and taxing marijuana, simply freezing property taxes, increasing (or eliminating) state support for schools, exempting the first $100,000 of home value from property taxes, and many more. — DYLAN GRUNDMAN O’NEILL

State Summary

• The potential for a special session in COLORADO is growing as Gov. Jared Polis and state leaders negotiate with tax cut organizers over property taxes in the state. Lawmakers believe a smaller deal to cut property taxes could prompt the outside groups to withdraw their ballot measures.
• Rumors about the abolition of the food tax in IDAHO continues to grow as lawmakers prepare for the upcoming 2025 legislative session.
• INDIANA Republican gubernatorial candidate Mike Braun released a property tax relief plan that drew criticism over the potential costs to local governments.
• MISSOURI Voters rejected an amendment that exempted child care facilities from property taxes and approved an amendment that required Kansas City, Missouri, to increase funding for its police department to 25 percent of the city’s general fund. The first measure would have exempted child care facilities from property taxes, imposing unknown costs on local governments. The second measure requires a larger percentage of Kansas City’s budget to go to the police department. Kansas City is also the only city in the state where the police department is not controlled by local governments; it is directly governed by a board, a majority of whose members are appointed by the state.
• MONTANAGov. Greg Gianforte is expected to soon receive a 12-part proposal from his property tax working group. The most discussed plan is a Homestead-Comstead exemption that would reduce tax rates on primary residences and long-term rental properties valued up to $1 million, in addition to changes to rates on properties above that threshold and commercial properties.
• NEVADA Voters will decide this November on a measure that would exempt diapers from state and local sales taxes.
• NEW YORK Lawmakers failed to pass permanent improvements in support for middle- and low-income families this year, but they did pass a one-time payment to families receiving the Empire State Child Credit. Eligible families will receive those payments later this month.

What we read

• The Massachusetts The Budget & Policy Center has published a helpful chart detailing the public services the state has been able to fund using revenue from the recently passed millionaires’ tax, known as the Fair Share Amendment. Things like free meals for schoolchildren, free community college, and free and expanded bus service are now available to citizens.
• ProPublica And The Seattle Times have come together to publish an exposé on Washington state that all states could learn from. It documents how a data center tax break was sold to lawmakers and voters as an economic boost, but costs kept rising and promises were not kept.

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