Wednesday, Governor Jim Pillen, accompanied by several state senators including members of the Revenue Committee, announced six priority bills for the Legislative session aimed at transforming Nebraska's tax code, making our state's tax system more competitive with other states, improving workforce development, and providing parents and their children additional choices for education.
"Our current tax system fails to make Nebraska competitive," said Pillen. "If we are going to attract and retain people, we need to modernize our tax code and provide Nebraskans with the tax relief they need. My proposals will reduce our property, income, and business taxes to spur economic growth so Nebraska can remain, for future generations, the best place in the country to work and raise a family."
Two of the bills aim to accelerate tax cuts passed by lawmakers during the last legislative session.
- The first bill, introduced by Senator R. Brad von Gilleran, aligns the personal income and business income tax rates, and lowers them to 5.84 percent. Once passed, it would translate to $78.5 million in immediate and additional tax relief for tax year 2024.
- Legislation, proposed by Senator Kathleen Kauth, also expedites tax relief by moving up the state exemption on Social Security benefits. Currently at 60 percent, her bill would increase the exemption to a full 100 percent, producing immediate and additional tax relief savings of nearly $17 million in tax year 2024. The move would also bring Nebraska in line with 37 other states that do not tax Social Security income.
Other bills provide new tax relief.
- Senator Lou Ann Linehan introduced a bill to reduce personal and business income taxes by stepping up cuts annually to at least 3.99 percent by tax year 2027. Once completely phased in, this proposal would result in annual tax savings of $720 million dollars.
- To make the assessment of agricultural and horticultural land more equitable, Senator Joni Albrecht proposed the state change from a market assessment to one based on income earning potential. Under the Agricultural Value Fairness Act, valuations would be determined by land type and region with an aggregate statewide growth cap of 3.5 percent.
Two other measures focus on providing tax relief around education.
- $21 million in new tax credits would be made available to eligible organizations that grant scholarships to children wishing to attend private school. The program, introduced by Sen. Linehan, prioritizes children who are at the 100 percent poverty line. Children who have special needs, are in foster care, and have experienced bullying would also be among the first for consideration of a school-choice scholarship. The program proposes additional tiers of eligibility based on available funds.
- The second education-focused measure, proposed by Senator Dave Murman, would shift funding of community colleges from property tax revenue to state support. Under passage of this bill, state funds would be allocated to cover current property tax requests. This would result in an immediate statewide average property tax cut of 5.3 percent and by tax year 2026 Nebraskans would benefit from $282.5 million in tax relief.
Categories: Nebraska, General, Government & Policy