A special committee of state senators will take a comprehensive look at the state tax system.
The legislature has approved creation of the Tax Modernization Committee, comprised of the Revenue Committee, chairmen of various other committees and two at-large members. LR 155 passes easily, 40-0 with five senators not voting.
Sen. Galen Hadley of Kearney, as chairman of the Revenue Committee, will chair the tax committee. Hadley told colleagues studies have been done before.
“We’ve had three comprehensive looks and like a lot of studies, they’re on the shelf,” Hadley noted during legislative floor debate, “but we’re going to use those three comprehensive studies as a starting point.”
The legislation calls for the Tax Modernization Committee to examine the Tax Policy Reform Commission of 2005-2007 and a study undertaken between 1986 and 1988 by Syracuse University.
Hadley issued a challenge to colleagues.
“And I’m going to throw out a comment about the body. Will you have the courage, after we’re done with this study, to come in and vote on some of the proposals that might come out of it?” Hadley asked. “Because in order to lower some taxes we might have to raise some taxes.”
The Tax Modernization Committee will be comprised of the Revenue Committee, plus the chairs of the Appropriations, Health and Human Services, Education, Agriculture and Planning Committees. Two at-large members will be added.
The committee is to submit its findings and any recommendations to both the legislature and the governor no later than December 15th. It is to propose language for legislation to be debated in the 2014 legislative session and identify any areas that might require additional study.
Sen. Tom Carlson of Holdrege issued a caution to colleagues, warning about the difficulty in changing tax policy.
“And, we also need to be very careful of whatever we choose to discuss and maybe implement that it doesn’t have the unintended consequence of raising property taxes,” Carlson stated.
Carlson said that any change in state tax policy could shift burdens to local government, which might be forced to raise property taxes.
The legislation specifically charges the committee to consider fairness, competitiveness, simplicity and compliance, stability, adequacy, and complementary tax systems in its study.
Sen. Dave Bloomfield of Hoskins urged members of the committee to not just talk with each other.
“I hope the committee gets out and talks to Nebraska, finds out who is suffering the pain; look hard at property tax,” Bloomfield said.
AUDIO: Unicameral debates LR 155, creating the Tax Modernization Committee. [1 hour, 16 minutes]