Promises vs Reality: Affordability

Affordability is a topic that is on everyone’s minds, and it comes up in my conversations with constituents nearly every day. The cost of groceries, gas, school supplies, and nearly everything we consume in our homes and workplaces seems to gobble up more of our paychecks than it used to. This is not just perception, as some might claim: wage increases have not kept pace with the cost of living, and they certainly have not kept pace with our local property tax increases.
 
While the value of our homes may be increasing — and that is a good thing — that doesn’t put cash in the bank to pay for our living expenses, nor our tax burden.
 
I’m very realistic about what I, as a state senator, can and cannot do to impact the cost of everyday living. I will not claim that I’ll decrease the cost of groceries or gas at the pump. It would be disingenuous at best and dishonest at worst to do so, because very few of those items are under my, or any state lawmaker’s, control.
 
Some far-left candidates are claiming they can do this, and it’s simply not true. The only way this could happen is by embracing a full socialist system — having government-owned grocery stores and gas stations, and eliminating capitalism and entrepreneurship. In case we’ve completely forgotten history, this has been tried and has been an abysmal failure every single time. In my lifetime, I’ve seen breadlines in communist Eastern European countries. In Russia, you could only buy a car if you were a ranking party member and got permission from above. In China, the government ultimately determines what businesses may produce, who may own them, and under what conditions they may operate. The Chinese Communist Party maintains extensive control over markets, industries, and individual freedoms.
 
Price controls are just another example of government interference in the private marketplace, and they have rarely proven to actually lower costs for any length of time. Often, they take the form of a subsidy, which actually takes your tax money to buy down the cost of a product — a dangerous and nonproductive cycle. I didn’t intend for this to turn into an anti-communism rant, but the situation seems to lead in that direction.
 
So, what can I, and other lawmakers, do to help make life more affordable?
 
We can create and defend tax policies that take less money out of your wallets!
 
When I ran for office in 2022 and began to study the state finances, I learned that there was a large budget surplus at that time, which led me to a question and a solution. The question was: “Why is the State of Nebraska sitting on overpayments of tax dollars”, and the solution was: “Give it back!”
 
We’ve done that through the Education Future Fund and the Property Tax Relief Fund, both of which buy down your local property taxes by about twenty percent.
 
That may not seem like much, but it is. Follow the math below:
 
·  A couple with two kids earning a combined income of around $150,000 will pay about $4,500 in Nebraska income tax next year. That is nearly half of what the bill was before LB 754 was passed as part of the Revenue Committee Bill in 2023.
o Approximate savings: $4,500
 
·  If that family lives in a $350,000 home, they’ll pay around $7,000 in property taxes — twenty percent less than the approximate $8,750 they would owe without the state property tax relief funds, which were increased in 2023 under LB 727.
o Approximate savings: $1,750
 
·  They’ll also pay around $3,500 in sales tax on discretionary items, but pay no sales tax on food, medicine, housing, insurance, services, etc., as these are exempt in Nebraska.
o Savings on tax-exempt items: varies, but at a minimum $1,500 annually
 
Just taking these few items into account, you can see that conservative, smart tax policy saves this family somewhere around $7,750 annually, or about 5% of their gross income. If any of us were offered $7,750 to help with day-to-day expenses, I bet we’d all jump at it.
 
I am absolutely not saying that what we’ve done is good enough. Property taxes, in particular, are still too high. These savings are more than most Nebraskans realize, but much work remains to be done to make our state more affordable.
 
All of this begs another question: “What more can the Legislature do to help”? 
 
The first thing we can do is not surrender any ground.  Don’t go backwards.  Don’t allow the income tax cuts or property tax relief to be reduced, paused or rolled back.  This was attempted at least five times last year on the floor by the introduction of hostile amendments to other bills.  I personally filibustered, or threatened to filibuster each of these amendments to prevent that from happening. 
 
Further, we can look into further efficiencies in agencies, reduce fees and never quit looking for ways to continue to reduce taxes.  
 
In the coming weeks I will be sharing the details of a bill I’ve been working on for several months. This bill will not only help with property taxes, but improve spending efficiencies while providing a return on investment – something I seek with every action I take in the Legislature.
 
If you have creative ideas for legislation that could help reduce the cost of living and make Nebraska more affordable, please don’t hesitate to email me at brad.vongillern@leg.ne.gov.