Gov. Pete Ricketts insists Nebraska can afford to cut taxes, even in the face of declining revenue.
Also, the governor opposes any tax swapping.
Ricketts rejects a call to increase the sales tax in order to lower property taxes.
“I’m opposed to raising anybody’s taxes and to think you can lower taxes by raising taxes is nonsensical,” Ricketts tells Nebraska Radio Network. “It doesn’t work.”
A coalition of various groups has suggested raising the state sales tax to allow a cut to local property taxes. No specific plan has been advocated, but backers says it would be revenue-neutral.
Ricketts has consistently touted a simple plan to cut taxes, the only plan, according to the governor: restrain spending as state revenue grows.
“And you can’t raise your taxes to get out of that,” Ricketts says. “So, this idea is just a bad idea. It’s not going to work. We’ve tried it in the past.”
Ricketts says the idea has been tried in the past without success. He points to the 1990s when the state increased funding for public schools in an effort to ease the pressure on property taxes. Property taxes increased nonetheless, according to the governor.
Ricketts suggests citizens need to apply pressure to local boards and commissions to keep property tax rates lower, noting that property taxes are assessed at the local, not the state, level.
All the talk of tax cuts come after the Nebraska Economic Forecasting Advisory Board recently adjusted downward its revenue estimate, now projecting the legislature will have to take further steps to close a projected $288 million gap. That has caused other critics to take aim at the governor’s proposal to cut about a percent off the top state income tax rate, dropping it from nearly 7% to just below 6%. Those critics contend the state should not erode its revenue base even further.
Ricketts makes a counter claim.
“Well, the state cannot afford to be uncompetitive on its taxes,” according to the governor. “That’s where we are. Bloomberg ranks us 16th highest when it comes to income tax and 5th worst when it comes to property tax.”
AUDIO: Brent Martin reports [:50]