Gov. Pete Ricketts delivers his State of the State address to the Unicameral later this morning, sure to propose a tax cut package.
A state senator sure to be in the thick of the battle is optimistic one can pass this year.
Sen. Jim Smith of Papillion fell short of the votes needed last year to push the governor’s tax package through the legislative session. He remains upbeat about prospects for trying again.
“All the elements are there to be able to get something done this year,” Smith tells Nebraska Radio Network. “I mean there’s certainly a desire to see something move forward, but there’s no question about it the path is very, very narrow.”
Smith insists any tax cut package must combine cuts to the individual and corporate income tax with property tax relief, the approach the governor pushed last session.
Last year, Smith fell six votes short of the total needed to break a filibuster of LB 461. He says he’ll push a new package this year.
“I think you may see some components (of LB 461), but I think it’s going to be very different,” according to Smith.
Smith moved for cloture on the bill last year, getting only a 27-9 vote, short of the 33 needed to end the filibuster and force a vote on the bill. Thirteen senators abstained.
LB 461 proposed cutting the top state individual and corporate tax rate gradually, at about one-tenth of a percent at a time until it dropped from the current rate of 6.84% to 5.99%. Any reduction would only occur during a fiscal year in which state tax revenue was projected to grow by at least 3 ½%. Corporate taxes would be cut if state revenue is projected to grow by 4%. LB 461 also would increase the earned income tax credit designed to help low-income families.
The measure would change the valuation method used to assess agricultural land for property tax purposes from the current market-based method to one based on the income potential of the land.
In an effort to attract rural support, it would have provided an additional $20 million to the state property tax relief fund.
Though Smith promised further enhancements for property tax relief before it returned for second-round debate, he couldn’t attract the votes needed to advance it
Gov. Ricketts is expected to outline his tax proposal in the State of the State address.
AUDIO: Brent Martin reports [:50]