A scaled-down tax cut package signed into law is a first step toward tax relief, according to its sponsor.
Sen. Abbie Cornett of Bellevue watched Tuesday as Gov. Dave Heineman signed into law LB 970. Cornett carried the governor’s original proposal to reduce personal income taxes, the corporate income tax rate and to eliminate the inheritance tax in the legislature and immediately found resistance from fellow senators, worried the state could not afford the $326 million package spread over the next three years.
Cornett worked with the opposition and reduced the package. She still could not get the votes needed. Finally, she offered a modest proposal. The compromise would lower personal income tax levels for most Nebraskans. Top earners would not see a tax cut. The corporate tax structure would remain the same. The inheritance tax, collected by the counties, would remain on the books.
The revised package, totaling $97 million over three years, passed the legislature on a 39-9 vote.
Cornett says the original bill had two goals: to provide tax relief for Nebraska residents and to improve the state tax burden ranking in national studies.
“This year, when we determine that we could not get the full package through, the governor and I determined that we wanted to focus in on tax relief for our citizens this year,” according to Cornett. “But, to grow our economic base, we really need to look at improving our rankings and eliminating the inheritance tax and looking at our corporate income tax rate would be two very key factors in doing that.”
Cornett says she will work to do that during the next two legislative sessions.
AUDIO: Sen. Abbie Cornett discusses the tax relief proposal [:50]