Progress toward meaningful tax relief

My number one priority while serving the past 8 years in the Nebraska legislature is to pass meaningful property tax relief. Although we did not achieve the level that I was hoping for over the years I’ve been here, we have made progress. Last week we passed the first round of across-the-board tax relief. Income, social security, corporate and property taxes will be reduced in the upcoming years. The vehicle for these changes was LB 873, a bill introduced by Senator Curt Friesen of Henderson. The Revenue Committee amended LB 873 with AM 2649, completely changing the bill from its original form. AM 2649 had many components, and therefore was divided into 4 amendments, but the section that was left in was the part on eliminating the tax on social security by the year 2025.

AM 2663 raised the property tax credit from $375 million to $548 million. This still does not address the root of the problem but at least some of the money will be returned to the taxpayers.

Amendment 2658 reduced the state’s top income tax bracket over a 5 year period by .20% each year. Currently, the top income tax bracket is 6.84% and by January 1, 2027, it will be reduced to 5.84%. So, in 2023, it will go from the current 6.84% down to 6.64%, 2024 it will be 6.44%, 2025 it will be 6.24%, 2026 it will be 6.00% and then in 2027 and thereafter it will be 5.84%. That is how it will be in statute but future legislatures will be able to change it because by law, we cannot bind the hands of future legislatures.

Some of my colleagues have areas of taxes that are perhaps more important to their constituents than others, so instead of just one group benefiting, every group got a little something out of the compromise. AM 2661 reduces taxes for corporations that earn over $100,000 a year. Right now they pay 7% and over the next 5 years will be reduced to 5.84%. My colleagues argue that if we want companies to come to Nebraska we must make ourselves competitive with our neighboring states.

In AM 2662, the Community College Credit Program would start at $50 million this year and go up to $195 million by 2026. The goal is to have the program offset about ¾ of your community college property taxes. This will be a new credit program that will be similar to the LB 1107 program created 2 years ago which offset a portion of what property owners pay in property taxes to K-12 schools.

Please feel free to contact my office with any questions or concerns that you might have. My email address is dhughes@leg.ne.gov and my phone number is (402) 471-2805. My office is in room 2108 at the Capitol if you are in the Lincoln area.