Most talk during the just-concluded legislative session centered on property taxes, but the business community is looking back on lost opportunities during the session.
The primary tax relief proposal backed by the governor provided both a break to property owners as well as a cut to the corporate income tax.
Nebraska Chamber of Commerce President Barry Kennedy insists tax rates remain a barrier to economic growth.
“The state chamber has been consistent in its advocacy,” Kennedy tells reporters. “Nebraska must lower its overall tax burden on both individuals and business.”
Gov. Pete Ricketts introduced Legislative Bill 947 early in the short, 60-day legislative session which began in January. Originally, the measure proposed converting the Property Tax Credit Relief Fund to provide refundable tax credits for agricultural property owners as well as homeowners. Once phased in, it would have provided $200 million in property tax relief for agricultural and residential property.
The bill also included proposals to cut both the top individual income tax rate as well as the corporate income tax rate. It proposed the top individual tax rate drop from 6.84% to 6.69%. The corporate tax rate was proposed to drop from 7.81% to 6.69%. Once phased in, the tax cuts would have totaled $40 million.
LB 947 underwent significant change during the sessions as Gov. Ricketts and Revenue Committee chair, Sen. Jim Smith of Papillion, sought the 33 votes needed to overcome a filibuster and force a vote on the bill. The governor scrapped converting the tax credit relief fund and cutting the top individual tax rate. The corporate tax cut remained in the bill. The bill also contained $5 million for workforce development. Ricketts increased property tax relief, bringing the total price tag for the tax cut package to $650 million once fully implemented in 2030.
Kennedy sees tax relief as a way to spur the state economy, stating a growing economy spurring population growth would turn around lagging state tax revenue.
“We don’t have any problem at all that another 100-to-200,000 people with jobs, paying taxes in Nebraska, would not solve,” according to Kennedy.
AUDIO: Brent Martin reports [:50]