Halfway through, it's about taxes or the lack thereof

The first session of Nebraska's 103rd Legislature is half over.

Forty-five days in and the talk has centered on taxes, or the lack thereof. Lame Duck Governor Dave Heineman's plans to end the personal and/or corporate income tax in Nebraska have been left in the dust. Concern over ending millions in sales tax exemptions was enough to cause second thoughts.

Hours of debate before the Legislature's Revenue Committee -- most of it in opposition to the bills -- was enough to convince the chief executive to scuttle the plan which had seemed like such a good idea when presented by fellow Republican governors in several other states.

Some say it was less than a smart idea to make such a proposal in Nebraska. Others say it was genius because it obviously started a conversation, which led to the now lingering discussion of tax reform.

Sen. Paul Schumacher of Columbus offered a bill (LB613) to create the Tax Modernization Commission. Schumacher, a member of the Revenue Committee, and Committee Chairman Sen. Galen Hadley of Kearney said the hearing on the Governor's proposals made it clear that Nebraskans want to further discuss tax reform. Given that the state's current tax system dates back to the 1960s and the last reform came with the oft-noted Syracuse tax study in the '80s, it's time for another look.

Meanwhile, possibly because of the pending study or a mood swing in the 49-member legislative body, plans to exempt taxes on military pensions and some Social Security income appear to be dead. Several measures, based largely on the way the exemptions are handled in neighboring states, had been offered.

So much for the income side. This is the year that the nine-member Appropriations Committee crafts a new two-year budget. New committee chairman, short-termer Sen. Heath Mello of Omaha, has cautioned that there isn't enough money to go around. Mello, who will step down in two years because of term limits, has issued the same warning that his predecessors have for years. The state doesn't have a blank checkbook.

The committee submitted a preliminary $7.8 billion two-year spending proposal that would leave about $18 million for new projects and programs proposed in new bills. The caution is for the sponsors of those bills to be prepared to pare down their accompanying "A-bills" that seek the funding for the ideas. Given that some bills carry a rather large individual price tag, it won't take long to use up the $18 million.

Taxing and spending. It boils down to priorities that will clearly be tested during the "second half" of this legislative session.