Governor proposes $220 million in income, property tax cuts

By Deena Winter | Nebraska Watchdog

LINCOLN, Neb. – Gov. Dave Heineman proposed spending $220 million of the state’s record-high cash reserve in order to reduce income and property taxes over the next three years, leaving a half-billion-dollar cushion.

“This year the focus should be on tax relief,” he said during a rare evening press conference on the night before he delivers his State of the State speech. “We don’t need more time to study this issue. The Legislature needs to act this session.”

TAX RELIEF: Gov. Dave Heineman proposed transferring $220 million from the state’s cash reserve to pay for income and property tax relief for the next three years.

Heineman said the state is sitting on a record $722 million cash cushion and should give some of it back to taxpayers. Depending on how much the state increases spending in the coming years, $370 million to $500 million is available for tax relief, he said. He proposed transferring $220 million over the next three years, leaving a half-billion in reserves, which he said is more than sufficient for a state with an annual $4 billion budget.

“We now have the largest cash reserve we’ve ever had,” he said. “We are sitting on a bundle of cash. We are overtaxing our citizens right now, and they deserve some of it back.”

He supports the Nebraska Farm Bureau’s proposal to lower ag land valuations from 75 percent to 65 percent to help farmers and ranchers deal with record high property taxes.

He also continued his push to reduce income tax rates, saying Nebraska’s rates are among the highest in the nation – higher than all but one neighboring state. He’s primarily focused on reducing individual income tax rates, since 90 percent of small businesses pay their taxes through the individual code.

Before the governor’s press conference was even over, two prominent Democratic lawmakers immediately condemned the governor’s proposal via Twitter.
“Using one-time funding and risking Nebraska’s fiscal health for (a) trickle-down tax plan is something that I cannot support,” Omaha Sen. Heath Mello said.

Omaha Sen. Jeremy Nordquist accused the governor of trying to create a legacy during his last year in office at the expense of future generations.

“It is clear that the governor has one priority: cutting taxes for the wealthiest Nebraskans,” Nordquist said in a press statement. “We don’t need to guess about what the governor’s plan will do. Enormous tax giveaways for the wealthy did not create greater economic growth in Kansas; it created massive cuts to K-12 and higher education.”

Nordquist noted that a Mercatus Center report released Tuesday ranked Nebraska first in the nation for long-term cash solvency and fourth in overall fiscal health.
“Why would we want to put our strong fiscal position in jeopardy?” Nordquist asked. “Governor Heineman’s legacy is not a good enough reason.”

But Heineman said allegations that he’s trying Kansas-style tax cuts were “wrong, wrong, wrong.”

Heineman said Nordquist is happy to spend money to expand Medicaid under the Affordable Care Act, or Obamacare. He said it’s Nordquist and Mello’s prerogative to oppose tax relief, but he’s disappointe and “they certainly want to spend the money.”

However, he did not have a plan to continue paying for tax relief once the three years is up.

“Whoever’s the governor and the Legislature will have to deal with it,” he said.

Growing exasperated with reporters’ questions, the governor suggested they get out of the capitol more often and talk to Nebraskans, and later said he’d put in an amendment exempting the press from his tax cuts.

Contact Deena Winter at deena@nebraskawatchdog.org. Follow Deena on Twitter at @DeenaNEWatchdog

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

The post Governor proposes $220 million in income, property tax cuts appeared first on Watchdog.org.

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and host of the Plain Talk Podcast which you can subscribe to by clicking here.

Top