A special legislative committee reviewing the state tax system might serve more as a guide to possible legislation next year.
It is unlikely to propose the bold changes envisioned by Gov. Dave Heineman.
Tax Modernization Committee chairman, Sen. Galen Hadley of Kearney, says the legislature gave the committee a number of tasks.
“You know, one of the big ones is equity,” Hadley tells Kevin Thomas, host of Drive Time Lincoln on Nebraska Radio Network affiliate KLIN. “Are we being equitable in the three main taxes in Nebraska?”
Hadley says the committee faces the age-old dilemma all legislative bodies face: everyone wants lower taxes without less service.
Add another this committee faces: every sales tax exemption has a group that lobbies to keep it.
The Unicameral got a real taste of that in public hearings on a bold proposal made by Gov. Heineman during the last legislative session. The governor proposed scrapping the state income tax, both individual and corporate, in exchange for the elimination of a number of sales tax exemptions. Groups that benefit from the exemptions lined up during the public hearings at the Capitol to protest the idea.
In the wake of the outcry, the Unicameral scrapped the governor’s proposal and opted instead to form the Tax Modernization Committee to study the state tax system and propose changes. It has a mid-December deadline for filing its report with the legislature.
Hadley expects the committee to file a report that establishes principles upon which to judge tax legislation.
Though the governor has urged a bold approach, Hadley seems more cautious.
“We could possibly lower the income tax rate, such as that, but I don’t see eliminating the income tax or making dramatic changes in the sales tax. I think it will be less bold steps.”
AUDIO: Brent Martin reports [:35]