Bold solutions to reduce the tax burden

When I began my service as a State Senator in 2017, there were roughly 60,000 job vacancies in the skilled trades in Nebraska. Now the department of labor will say the number is closer to 80,000 job vacancies. South Dakota’s governor likes to boast there are about 25,000 vacant jobs in her State. It is important to remember that South Dakota, like our neighbor Wyoming, does not have an income tax. For a lot of hourly workers in Nebraska, the state income tax taken from them could pay a healthcare premium, or go towards a new(er) vehicle. Our taxes are why people move away or don’t move here in the first place.

Nebraska has historically been a high-tax State. That said, for the last six years Senator Linehan has chaired the revenue committee, she has championed a number of great bills that have lowered income taxes and has fought hard to lower Nebraskan’s property taxes. For example, one of the bills she advanced from the Revenue Committee removed the authority for Community Colleges to levy property taxes. A number of modest proposals have been aimed at public schools because about 60% of property taxes are used by the local school district. Regardless, we still need to compete with our six neighbors. The question is, how do we do that in a state that has a very large and expensive state government? Where should the $11.7B come from?

There is no shortage of ideas when it comes to reforming Nebraska’s tax system. I think a strong majority of people in Nebraska (who pay taxes) believe we should rightly focus on a citizen’s tax bill in terms of dollars, not a levy or percentage. They want the amount of money they pay in taxation (especially property tax) to go down. They want to pay less in taxes next year, and in some ways they will with the bills we have passed the last two sessions.

Sadly, year after year all we can really manage to get passed in the way of property tax reform is what my colleagues have called “a decrease in the increase.” You will pay more in taxes next year, but it is not going to be as much as it would have been.

The reason this kind of reform is all we can really hope for is as plain to see as first grade arithmetic. Thirty-eight Senators (75% of the Legislature) have a piece of Omaha/Lincoln metropolitan area in their district. A number of them vote against tax cuts. The remaining eleven senators that represent about 80% of the landmass of the State, cannot pass tax reform. The tyranny of simple math says when the Governor calls the Special Session this summer, the votes he needs are in Omaha and Lincoln. Rural senators require no encouragement to vote for property tax relief.

I think we need to recognize that on-going devotion to our failed income, sales, and property tax systems will continue to limit our options. The dedication to this system is no accident. The ability for a senator to run a small bill to tweak the tax code to reward friends and punish enemies pays a lot of six-figure salaries in the lobby. It is the main reason over 400 registered lobbyists all strongly oppose changing this system.

Nebraska is the only State with a unicameral legislature. We are the only State whose electrical utilities are 100% publicly owned. We are the only state to take 10 years to build our capitol because we did not borrow a penny. In the 1930’s Nebraska was the only state whose constitution did not authorize the government to carry “bonded debt.” Cornhuskers are known to chart our own course and do bold, innovative things. We can be the only state in the country to raise $11.7B in taxation with zero income, zero sales, and zero property taxes. Think of the television commercial Nebraska’s Governor could make if we had none of these taxes. I encourage folks to check out the EPIC tax idea, and sign the petition. To learn more go to: https://epicoption.org/

Please contact my office with any comments, questions, or concerns. Email me at tbrewer@leg.ne.gov, mail a letter to Sen. Tom Brewer, Room #1423, P.O. Box 94604, Lincoln, NE 68509, or call us at (402) 471-2628.