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By the time you read this, the legislature will have debated the governor’s tax relief proposal, LB 947. And hopefully, we will have debated a version of my LB 1084 as an amendment to another bill.
The approaches of 947 and 1084 are drastically different. LB 947 provides corporate income tax relief phased in over five years. It also provides for a refundable income tax credit based on the 2% of property taxes paid on ag land, and 1% paid on residential property, although many versions and amendments have been proposed. These amounts increase annually, with the ag refund growing by another 2% each year, to reach 20% in 10 years. The residential portion increases another 1% per year for five years, then grows at 2% per year until reaching 20% in thirteen years. However, residential credits are subject to a maximum of $25 dollars per home the first year, and growing to a maximum of $500 after thirteen years.
The amended version of LB 1084 raises the sales tax rate and cigarette taxes, reinstates the alternative minimum tax, repeals the personal property tax exemption, and places a surtax on high incomes. The revenue raised is then used to restore the remaining one year of cuts to K-12 education contained in last year’s LB 409, to fund a 30% allocated income tax similar to that found in the original TEEOSA formula, to fund $500 per student aid to all school districts, to fund an additional $80 million to special education reimbursement, and to further fund the property tax credit fund.
LB 1084 will also place a two year property tax asking cap on local school districts, and will call for a comprehensive study of how K-12 funding in Nebraska is structured.
As the legislature compares the proposals, I have asked my colleagues several questions. First, which proposal provides immediate and substantial property tax relief, and which proposal defers relief to many years down the road? Second, which proposal identifies how it is to be funded, and which proposal leaves it up to future leaders and future generations of Nebraskans to ensure it is paid for? Third, which proposal places limits on local taxing authorities to help ensure long term property tax relief, and which proposal does nothing to control property tax growth across the state?
For me, the answers to the above questions point in favor of LB 1084.
If you need to get in touch, the best way is to call my office and speak with my staff (or leave a message if you call over the lunch hour) at (402) 471-2631. My legislative website is news.legislature.ne.gov/dist41/ and my facebook page is at facebook.com/SenatorTomBriese. Lastly, be sure to sign up to my office’s mailing list to receive updates over the summer about town halls and events I will be holding near you. Sign up at: http://eepurl.com/dlRS6n