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Last week, the Legislature took up serious debate of the budget adjustments proposed by the Appropriations Committee. LB970, which is the tax cut proposed by Governor Heineman, has been advanced by the Revenue Committee with some changes. The Revenue Committee amendment would not change corporate income tax rates and inheritance tax provisions, but would decrease the individual income tax rate. The cost of this individual income tax cut is estimated to be $148 million over the next three years. The tax cut would not create significant budgetary concerns this year, with a cost of approximately $9 million. However, during the next two year budget cycle, nearly $140 million in revenue would be lost, which results in a larger budget shortfall for that budget cycle. Beginning in the fourth year of implementation, the loss of revenue would reach $125 million per year. The Legislature will continue debating the budget bills as well as the possibility of incorporating this tax cut this week.
The Legislature also debated and advanced LB824, introduced by Senator Russ Karpisek of Wilbur, which defines the term “flavored malt beverage” under the Nebraska Liquor Control Act. This term had not previously been defined, and as a result, there was ambiguity as to how these beverages were taxed. While the products had been taxed as beer for quite some time, the Supreme Court recently upheld a Department of Revenue ruling finding these products should be taxed as distilled liquor. I support LB824 because it clarifies that flavored malt beverages should be taxed at the same rate as beer. Many opponents have tried to classify this as an alcohol issue, but I support this bill because I feel it is a tax issue. The tax rate for these beverages should not be changed. This bill does not make flavored malt beverages cheaper, and I do not believe it will encourage underage drinking. However, allowing flavored malt beverages to be taxed as distilled liquor will result in an increase in taxes on these products, and I cannot support a tax increase of that type.
LB799, introduced by Senator Abbie Cornett of Bellevue, was also debated and advanced. LB799 changes the criminal provisions relating to negligent child abuse to clarify that negligent child abuse resulting in death is a Class II felony, negligent child abuse resulting in serious bodily injury is a Class III felony, and negligent child abuse not resulting in serious bodily injury or death is a Class I misdemeanor. Current law does not include different penalties relating specifically to the level of harm to the child in cases of negligent child abuse. These new classifications mirror the statutes for child abuse that is committed knowingly and intentionally and will provide more charging options in child abuse cases. I support this legislation as well and hope that it will work to more adequately deal with future cases of child abuse.
Senator Tyson Larson