LINCOLN, Neb. (AP) - Nebraska lawmakers started sorting through income and property tax proposals on Tuesday in hopes of building a comprehensive package, but senators say they’re unlikely to reach a unanimous agreement.
Members of the Revenue Committee kicked off a broad discussion about what they should send to the full Legislature. The bill that emerges will need to address both property and income taxes to gain sufficient support, said Sen. Jim Smith of Papillion, the committee’s chairman.
Previous attempts to prioritize one over the other have created a split between conservative urban senators who want to lower income taxes and rural lawmakers who consider property tax reductions their top priority.
Smith said he believes lawmakers will advance some compromise, but “I’m not counting on unanimous agreement.”
Still, “I think there’s a path forward for this,” said Smith, who has sponsored a bill on Gov. Pete Ricketts’ behalf to lower the state’s top income tax rate.
The governor’s income tax proposal has drawn praise from business and conservative organizations but criticism from groups that represent teachers, farmers and the poor. The bill would lower Nebraska’s top income tax rate in eight steps, from 6.84 percent to 5.99 percent, in years when projected state revenue increases by more than 3.5 percent.
A second proposal by Sen. Brett Lindstrom, of Omaha, would reduce income tax rates, eliminate a tax bracket and pay for it by expanding the state’s sales tax base.
Committee members are also considering three property tax measures, two of which would change the way agricultural land is valued. Farm groups have said they appreciate the measures, but that they don’t do enough to address soaring property values and taxes even though farm incomes have declined.
A third measure would cap the amount of revenue school districts could generate through property taxes and increase state aid. It also would lower the state’s maximum property levy.
Committee members will meet at least three more times to discuss the proposals.
“We have a long road to travel before anything happens,” said Sen. Paul Schumacher of Columbus.
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