Taxes main topic of debate in Lincoln

As this update goes to press, the Nebraska Legislature will have completed fifty-seven days of this year’s sixty-day legislative session. Much of the focus and debate this week has been on taxes.

The road to tax relief this year has been difficult and circuitous as every effort has been challenged and delayed through the filibuster process. This results in eight hours of debate on General File and four hours of debate on Select File and the need to garner at least 33 votes at each stage for the bill to be voted on.

Because of this environment, it became necessary to combine separate tax relief bills into one tax relief package that was amended into LB 873. In developing this package, an effort was made to have an equal balance between income tax relief and property tax relief. This bill, which was on Select File, was debated this week and after a four-hour filibuster, finally advanced to Final Reading. Yesterday, the Legislature passed LB 873 and the bill has been sent to Governor Ricketts.

LB 873, as amended, would make the following tax cuts:

Individual Income Tax Credit for Property Taxes Paid: Taxpayers would have the opportunity to receive a credit on their income tax for a portion of their property taxes paid to community colleges. Additionally, the current refundable state income tax for a portion of property taxes paid for K-12 education will continue to be funded at a larger level.

Social Security Income: This bill would phase out state income taxation of Social Security income in four annual steps. It would make Nebraska more attractive to seniors that wish to retire in this state and would bring our state in line with other states that offer a similar exemption.

Corporate Income Tax: The top corporate income tax rate would also be cut to attract new businesses to Nebraska.

Income Tax: The top individual income tax rate will gradually be cut in several steps. This will keep Nebraska competitive with neighboring states.

In another bill passed earlier this year, the Legislature approved a reduction of Nebraska’s inheritance tax. This bill has been signed by the governor.

This year’s LB 873 represents one of the largest tax cut packages passed by the Legislature. While this bill is not perfect, property tax reduction has been and continues to be one of my primary objectives as a state senator and I will continue to pursue this goal.

I welcome any comments, questions, or ideas you may have on this or any other issue. Please feel free to email me at dmurman@leg.ne.gov or call my office at 402-471-2732.