An income tax relief package being pushed by Governor Pete Ricketts and Revenue Committee Chairman Jim Smith is expected to face some challenges during the upcoming floor debate.
Members of the Revenue Committee have advanced the measure to the full Legislature on a 6-2 vote. Ricketts has named the tax package as one of his top priorities in this year’s session.
State Senator Roy Baker, of Lincoln, says he continues to hear more support for focusing on property tax relief, not state income tax.
“This thing is far from being a done deal,” Baker says. “The Revenue Committee is stacked with a lot of people who would have Governor Ricketts’ view on that. Most everybody’s been hearing that what the people in Nebraska most want is property tax relief.”
The revenue proposal advanced last week would lower Nebraska’s top individual income tax bracket gradually, from 6.84 percent to 5.99 percent, in years when state revenue growth exceeds 3.5 percent. It also would cut the state’s top corporate income tax bracket in phases, from 7.81 percent to 5.99 percent. The earned income tax credit would increase to benefit low-income residents. Two bottom tax brackets would be combined.
Baker says, “We certainly hear from a lot of individual residents in District 30 and other senators report the same in their districts that people are hollering for property tax relief and not many people are hollering for income tax relief.”
For farm and ranch landowners, the bill would alter the way agricultural property is valued to base it on potential income and cap how quickly taxable land values can grow. Baker says from what he’s seen, altering the way agriculture property is valued probably won’t make a huge difference.
Baker says it seems curious that time is spent talking about tax reductions when the state is close to one-billion dollars short on the revenue side.
“Maybe the time when the economy of the state is doing well and the coffers are overflowing, then may be a better time to talk about reductions,”Baker says.
Nebraska faces a projected $288-million revenue shortfall in its upcoming two-year budget.
By Doug Kennedy, KWBE, Beatrice