Gov. Pete Ricketts promotes his tax cut package as a tool to spur economic growth during a legislative hearing at the Capitol.
Ricketts assures members of the Revenue Committee his mix of property tax and income tax cuts is a work in progress.
“We plan to continue to talk with pro-growth senators and pro-growth groups with regard to how we can amend this bill to be able to get consensus to get it to my desk,” Ricketts says during testimony on Legislative Bill 947.
LB 947 is sponsored by Revenue Committee chair, Sen. Jim Smith of Papillion, on behalf of the governor. A different mixture of property and income tax relief last year failed to clear a filibuster during legislative floor debate. Smith says he and the governor have been listening to individuals and groups on what type of legislation might garner the votes needed to overcome an expected filibuster this year.
Under the governor’s proposal, the legislature would convert the Property Tax Credit Relief Fund to provide refundable tax credits for agricultural property owners as well as homeowners. A modification made by the governor prior to the hearing would start the tax credits at 12% with a cap of $280 for homeowners. The credits would increase by 2% every other year until they reached 30% in 2031. The residential caps would rise $50 with each increase.
Most of the money for the current fiscal year would come from the property tax relief fund, but the governor acknowledges up to $45 million would have to come from the state Rainy Day fund.
The top individual and corporate income tax rate would drop to 6.69% in two steps on the condition that state revenue rises adequately.
The proposal also calls for $5 million annually to be used for workforce development
Executive Director Renee Frey with Open Sky Institute says this is no time to talk tax cuts.
“You can always pass tax cuts in the future when we’re on stable footing rather than in the middle of a continued budget shortfall,” Fry tells committee members.
Some lawmakers worry about the budget impact, others question whether it provides enough property tax relief.
AUDIO: Brent Martin reports [:50]