Gov. Dave Heineman today signed into law his scaled-down tax cut package as well as three bills providing tax breaks intended to spur economic development.
“These four bills are important to our continued efforts to keep Nebraska competitive for jobs and decreasing the tax burden on Middle Class Nebraskans,” Heineman stated during a bill-signing ceremony in his office at the Capitol.
Heineman originally proposed to reduce personal and corporate income taxes as well as eliminate the inheritance tax, costing a total of $326 million over three years. The legislature, under pressure from county officials, rejected the call to eliminate the inheritance tax. It also declined to reduce either the corporate income tax or the taxes paid by Nebraska residents who earn the most money. The final package approved by the legislature totaled $97 million over three years, a sum both Heineman and LB 970 sponsor, Sen. Abbie Cornett of Bellevue called a down payment on future tax reduction.
During the news conference, Heineman blamed the difficulty in passing his tax cut proposal on the “aggressive opposition” of the teacher’s union, Nebraska Appleseed, AARP, Open Sky Institute, The Nebraska Hospital Association the Nebraska Democratic Party.
The governor stated he will pursue further tax cuts in the future.
“I’m not done with tax relief. I’ve still got a couple of years left. If there’s any way to continue to reduce the tax burden on Nebraskans then I’m going to try to do it,” Heineman said.
County officials lobbied the legislature hard against eliminating the inheritance tax, which the counties collect. The officials stated the money was needed to sustain their budgets and its elimination would force them to either drastically cut services or raise other taxes.
The governor has largely dismissed the argument and has pressed the issue. Heineman points out 42 other states have eliminated the inheritance tax and Nebraska is at a disadvantage, because it still has the tax. Still, Heineman says he’s willing to work with counties toward its eventual elimination.
“I understand that issue, OK, but we all talk about it in the state of Nebraska: control your expenses, reduce the growth of local or state spending. That’s what they need to do at the county level,” according to Heineman. “And, again, if we have to phase it out over several years, I’m willing to try that, but I’m not going to give up.”
In addition to the tax cut package, the governor signed three other bills aimed at spurring economic development. LB 830 would extend the state agricultural tax exemptions to the bio-chip industry. LB 872 reduces the corporate income tax on Nebraska businesses selling services out of state. LB 1080 provides tax breaks for data centers.
The governor announced that Yahoo plans to take advantage of the tax break and expand its data facility in LaVista.
AUDIO: Gov. Heineman holds news conference to sign tax cut, economic development bills [8:20]