It appears highly unlikely that a major tax cut package will be approved this legislative session.
The Revenue Committee chairman, Sen. Galen Hadley of Kearney, says there will be no big tax relief measure this year.
“We dealt with reality,” Hadley tells Nebraska Radio Network. “Not that we didn’t want to do more, but the dollars just weren’t there without significantly impacting the rainy day fund and using one-time funds for ongoing commitments, which is not a good policy to have.”
Some minor tax measures will likely pass this legislative session.
The state income tax system does not account for inflation. The legislature likely will index income taxes to inflation, to insure against bracket creep.
Various tax breaks for retirees are working their way through the session. One measure would provide a tax break for military retirees. A bill that would provide a homestead exemption for disabled veterans is moving toward passage. Another bill would provide a tax break for those receiving Social Security benefits.
Those are all minor measures, not the big tax cut package envisioned by Gov. Dave Heineman and discussed when the session began in January. Certainly not the deep cuts in income and property taxes many discussed earlier.
Hadley, who also served as chairman of the Tax Modernization Committee which studied the state tax system last year, expects additional efforts to craft major tax relief next year.
“I think taxes will always be a discussion and the ways we can cut taxes for Nebraskans will be important, but to do this we also have to make sure we try to curtail spending too, because if spending keeps going up, we need the tax dollars,” according to Hadley.
Hadley says discussions about major tax relief will likely pick up again this summer.
AUDIO: Brent Martin reports [:50]