Gov. Dave Heineman stated today the legislature needs to approve his tax cut proposal or risk seeing the state economy slide backward.
Heineman brushed aside the criticism of Sen. Steve Lathrop of Omaha, who during legislative floor debate questioned whether the state could afford to cut taxes in the face of a projected $460 million deficit in the next budget cycle. [read previous story]
“Sen. Lathrop favors increased spending and he opposes tax relief for low-income and middle-income Nebraskans. His priorities are misguided in my opinion,” Heineman told reporters during a conference call this morning. “Sen. Lathrop wants Nebraska to take a step backwards. I don’t. I want us to continue to move forward.”
Heineman rolled out a $326.6 million tax cut proposal during his State of the State address in January. The legislature’s Revenue Committee has trimmed the packed down to around $148 million after several legislators raised concerns about whether the state can afford to cut taxes.
Criticism of the tax-cut proposal rose Tuesday during floor debate in the legislature as senators began consideration of three budget bills, which leaves only $17.6 million leftover after money is set aside for the 3% cash reserve. Lathrop certainly took a lead role in the criticism. He was joined by Sen. Jeremy Nordquist of Omaha and Sen. Health Mello of Omaha both of whom questioned whether the state can afford to cut taxes. Other senators cautioned that the legislature needs to be very cautious as it moves forward with the budget.
Heineman dismissed suggestions that the legislature cannot afford to cut taxes.
“Every dollar we can give to a low income or middle income family through tax relief will help them out. That’s what we ought to be doing. And those who oppose that; they have every right to do it, I just disagree with them,” Heineman stated, paused, then added. “And, so do most Nebraskans.”
Heineman said the legislature needs to control spending, lower taxes and create a more business-friendly, job-friendly and family-friendly environment.
As for the project budget deficit, Heineman said the deficit is overstated and can be handled if the legislature controls spending.
Heineman said he’s listening to the concerns expressed by legislators, but believes a tax cut is needed to keep the state economy strong.
“But, the bottom line is, if we want to continue to make our state more competitive and move forward, we need to control our spending and lower taxes. I’ll be cautiously optimistic, but I believe we can get that done,” according to Heineman.
AUDIO: Gov. Dave Heineman responds to critics of his tax cut plan [1:30]
AUDIO: Heineman reacts [:25]