A proposed $326.6 million tax cut package will be cut by about a third.
Gov. Dave Heineman unveiled his proposed $326.6 million tax cut proposal during his State of the State address in January. The plan called for expanding all four individual income tax brackets and lowering the rates in each bracket. The corporate income tax rate for income over $100,000 would be lowered to the top individual income tax rate, under the plan. Heineman also proposed eliminating the inheritance tax.
Heineman, during a conference call with reporters, hinted that the package would be reduced.
Sen. Abbie Cornett of Bellevue is carrying the package in the legislature. She has run into resistance from fellow senators worried about whether the state cannot afford such a drastic reduction in revenue.
“They’re worried about the fact that the economy is growing slower than it has in the past, historically,” Cornett says. “There are just some natural concerns out there.”
Cornett is revising the plan. It might be the end of the week before the revision is completed. What now is being proposed is dropping the proposal to eliminate the inheritance tax, a step that would remove vocal opposition to the plan from county officials who collect the tax. They have argued its elimination would cripple their budgets. The package also will no longer contain a cut to the corporate income tax. Nebraskans in the highest individual income tax bracket would not receive a tax cut, under the revised plan.
Cornett insists that most legislators favor reducing taxes, but want to vote on a smaller tax cut package. She says she will be meeting with lawmakers this week to reach a figure that legislators are comfortable with.
Cornett says lawmakers remain nervous about state revenue, understandably so.
“I think everyone’s nervous. It’s been a rough, rough few years with the recession.”
AUDIO: Brent Martin reports [:45]