Nebraska lawmakers end the week talking income tax cuts

BEATRICE – Whether to cut Nebraska income tax rates is generating debate in the Nebraska Legislature as this week comes to an end.
LB 939 proposes a reduction in Nebraska’s individual income tax rate. Senator Curt Friesen says any discussion about tax policy in Nebraska should be focused on who really needs relief…small businesses.

"In the end, they're the ones that create the jobs. The state...a lot of politicians like to run around and say we're gonna create jobs, and we don't. We're usually in the way of the businesses that do create the jobs. Our job is to stand out of the way, and let them do their work. For me, if we look at our tax policy overall...if we can help the small business out there.. to me, that's where our focus should be."

Speaker of the Legislature, Mike Hilgers, supports the bill out of the Revenue Committee, saying the reduction is more urgent today, than ever, because of high inflation affecting families.  "I read an article just the other day that tried to quantify the impact of inflation on families. That article suggested that inflation has caused a $250 monthly increase to the budgets of families in the United States. I think in many cases, we're under-selling that. It's probably a lot higher. But, at a minimum, inflation is far outstripping wage increases in Nebraska and around the country."

Senator Wendy DeBoer says the problem with the tax cut debate is no one knows when the higher revenue, good times will end. "I understand that we've been growing for the last couple of years, but that's the thing about growth...we don't know when that ends. We don't know if we are going to continue to grow at that rate. There are a lot of indicators by some really smart people, that we won't. What we're doing is we're gambling with the future of Nebraska that we are going to continue to grow at that rate...so we can give this money that we think we might have..to do something else. Borrowing against the expectation, the hope of future growth, makes me very nervous."

Senator Carol Blood says she doesn’t disagree that middle income Nebraskans need a break. Although senators say we need to give them their money back, she wonders why the state took it, in the first place?

"What about our state statutes has prevented us from letting them keep more money in their pocket? We're always trying to give things back that we've already taken from them...and that has never made sense to me."  Blood said she’d like to know the total amount of money contained in tax cuts currently being considered by the Revenue Committee.

Many Nebraskans have said property tax relief is the real need. Senator Julie Slama says she hears from residents that property taxes are still too high.
"We shouldn't be sawing off part of the leg of the three-legged stool, if the other one is still too long. That's a fair point, and I agree property taxes are still too high, and I think we might possibly address that issue, if not in LB 939...in later bills on the floor."

Slama said the state has reduced taxes in recent years…through tax cuts for veterans, social security recipients along with an income tax rebate on property taxes. But she says the state is really lacking on income tax relief for the middle class.