Gov. Dave Heineman insists the legislature needs to cut taxes; now, not later.
Heineman doesn’t want to see the Unicameral postpone tax relief. He wants a proposal to cut taxes, especially the state income tax placed before lawmakers next year.
“Here’s what’s key about this: this is about the next two or three decades. We have too many people leaving Nebraska. It’s called the brain drain, because we’re not tax-competitive for higher-paying jobs,” Heineman tells reporters after a speech in Grand Island.
Heineman insists a balanced package to cut both income and property taxes will attract jobs to Nebraska.
“That’s what at stake here: more jobs, higher-paying jobs and we have to be more competitive on the tax front. Same thing on property taxes; it’s a real burden for agriculture right now,” according to Heineman.
The deadline for the Tax Modernization Committee is to file its report is fast approaching.
A majority of the committee voted to leave the state income tax brackets alone during a recent executive session. Some sentiment was expressed to index the brackets for inflation.
The focus of the committee has shifted from the state income tax to property taxes, which are set and collected on the local level. One proposal would fold the current $115 million Property Tax Relief fund into the TEEOSA public school funding formula to allow school districts to lower levies.
The Unicameral, in 2010, ended subsidies to local governments. Some committee members have suggested re-instating the subsidies so city and county governments could reduce property tax levies.
A circuit breaker program would provide property tax relief for lower income households as well as retirees.
The committee wants the legislature to study reducing the assessed value of farmland for taxing purposes. Currently, the state assesses agricultural land at 75% of its market value. One proposal would drop the assessment to 65%.
The committee also is considering broadening the state sales tax base to include consumer services not now taxed in Nebraska to offset lowering taxes elsewhere.
Ken Anderson, Brownfield Ag News, contributed to this article.
AUDIO: Brent Martin reports [:40]