Lengthy hearings have been held. A lot of discussion has taken place. Now, where does the governor’s tax proposal go this legislative session?
That is the question facing state lawmakers.
Sen. Beau McCoy introduced the governor’s tax plans during two days of public hearings before the Revenue Committee at the Capitol. McCoy sees the two days of hearings as a conversation on where Nebraska finds itself.
“I think that’s what you saw with the hearings we had on LB 405 and 406 on Wednesday and Thursday is a discussion of about where we are today,” McCoy tells Nebraska Radio Network. “Now, it’s all about how do we chart a course on where we want to go in the future?”
Gov. Dave Heineman proposes eliminating the state income tax, both individual and corporate. To offset the loss in state revenue, he proposes eliminating $2.4 billion in sales tax exemptions. State sales tax exemptions total $5 billion annually.
An alternative has been floated
It proposes retaining the sales tax exemptions for the inputs used in agriculture and business, imposing the state sales tax on certain services to raise $1 billion and lowering the state income tax rate for both individuals and corporations to 3%.
McCoy says he’s willing to look at any and all solutions.
Revenue Committee Chairman, Sen. Galen Hadley of Kearney, says solutions might not come this session.
“We don’t want to do anything in haste and find out later we didn’t take enough time,” Hadley tells Nebraska Radio Network.
Hadley asked members of the Revenue Committee to think about the opposition raised during the two days of public hearings last week. He asked members to think through the bills and consider what might be the next best course of action.
Hadley says he is not in a rush and has not been pressured by the governor’s office to move legislation this year. He is considering a proposal to form a working group to consider alternatives to the governor’s proposal.
Both Hadley and McCoy seem ready to drop the proposal to end sales tax exemptions on agricultural and business inputs. Farmers and executives have complained that that would hurt the competitiveness of Nebraska products.
AUDIO: Brent Martin reports [:50]