The governor and the chairman of the legislature’s Appropriations Committee don’t agree on how much money Nebraska has to devote to tax relief.
Gov. Dave Heineman insists Nebraska has between $370-and-500 million to devote to tax cuts.
“I’ve outlined in general terms what we ought to do,” Heineman says. “I’ve said we’re willing to be very, very flexible, but at the end of the day, we need to provide tax relief for Nebraskans.”
Under the governor’s plan, the legislature would reduce a cash serve fund expected to top $700 million to $500 million. It would count on regular state revenue growth to provide both property and income tax relief.
Heineman has not unveiled a specific tax cut proposal. He has proposed state government has more room to cut taxes without risking its fiscal base than lawmakers have thought.
Sen. Heath Mello of Omaha, though, accuses Heineman of advocating the use of one-time funds to provide ongoing tax cuts.
Mello, chairman of the Unicameral’s Appropriations Committee, claims the governor has painted a rosier picture of the state’s finances than warranted. Mello says the state would not have survived the downturn due to the recession without an infusion of $600 million federal funds between 2009-and-2012.
In addition, Mello says the Legislative Fiscal Office recommends keeping the cash reserve fund at $643 million to weather the next national economic downturn, which could last anywhere from three to four years.
Mello says Heineman’s plan would place state finances in jeopardy.
“He has a responsibility as much as anyone else who proposes a multi-year massive expansive tax reform proposal to show how we continue to pay for the services that Nebraskans deserve and they expect from their state government,” Mello tells Nebraska Radio Network.
Mello estimates the state has as much as $75 million dollars it could devote to tax cuts.
AUDIO: Brent Martin reports [:50]