Debate has begun on Gov. Pete Ricketts’ tax cut proposal.
It’s fate in the last days of this legislative session remains uncertain.
Sen. Steve Erdman of Bayard rejects the proposal of property tax cuts mixed with a cut in the corporate income tax rate.
“This is one of the most ridiculous pieces of legislation that I’ve ever seen in my life,” Erdman tells colleagues as legislative floor debate begins on Legislative Bill 947.
Erdman is behind an initiative petition to place a billion-dollar property tax cut proposal on the November ballot.
The Erdman plan as well as other property tax cut measures hang over discussion of the governor’s proposal.
Sen. Jim Smith of Papillion, chair of the Revenue Committee, tells fellow senators they might like other plans, but LB 947 is the only legislation with a chance of passage in the final days of this legislative session.
And Smith says it provides certain tax relief that fits in the state budget unlike Erdman’s proposal.
“The ballot initiative will absolutely be harmful and if we do not advance this type of piece of legislation this year I believe that that ballot initiative becomes a greater reality than it is today,” according to Smith.
LB 947 mixes cuts to both agricultural and residential property taxes with a cut to the corporate income tax; a package that would total $650 million once fully implemented in 2030.
The measure has undergone significant change during this session. Scrapped is the proposal to convert the Property Tax Relief Fund into a refundable income tax credit. The relief fund would remain at $224 million. Refundable tax credits for property taxes paid would be added.
Agricultural producers would receive a 2% refundable income tax credit on property taxes paid, increasing by 2% a year until it reaches 20% once fully implemented by 2027. Residential property owners would also receive a 20% credit, eventually. It would grow a bit more slowly until being fully implemented by 2030.
LB 947 would phase in a cut in the corporate income tax to 6.84%, the same as the top individual income tax rate. Cuts to the individual income tax rate have been scrapped.
The bill also contains $5 million for workforce development.
Legislatives have debated the measure for three hours. If it is to return for further debate and possible advancement, Sen. Smith must convince Speaker Jim Scheer he has a good chance of getting the 33 votes need to overcome a filibuster and move to a vote on it.
AUDIO: Brent Martin reports [:50]