Hearing opens on governor's tax proposal

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February 6, 2013 - 5:34pm

The Nebraska Legislature began hearings on Gov. Dave Heineman’s tax proposals Wednesday.

Even before the hearings began in the afternoon, the governor came out swinging. In a morning press conference, he was asked about the lack of support for his proposals from business groups, including the state and Omaha Chambers of Commerce. Heineman said it was predictable.

"Big businesses with their highly-paid lobbyists, are trying to protect their special interest exemption. I understand that. But what about the small businesses in this state? What about working Nebraskans? What about military retirees? Seniors on Social Security? That’s the job of the Legislature and me. We’re going to stand up and fight for those people," he said.

In the afternoon, the Revenue Committee opened its public hearing on the governor’s proposal. It would abolish the state’s personal and corporate income taxes, and replace the lost revenue by doing away with many sales tax exemptions. That provoked a series of questions from senators. Sen. Kate Sullivan of Cedar Rapids asked about the proposal to end sale tax exemptions for manufacturing and agriculture.

"All of those businesses are so concerned about the removal of those sales tax exemptions. I’m concerned that they may actually curtail some of their activities and ultimately mean job loss for people," she told Heineman.

"I don’t think there’s been a governor who’s been more supportive of agriculture, and I’ll continue to be," Heineman said. "But at the same time, we’ve got to have this conversation. Everybody’s got to take a look at these exemptions. I think you’ve got to answer the question ‘If two industries get ‘em shouldn’t everbody get it on machinery or energy, or no one gets it?’" he said.

Heineman said his proposal would spur economic growth, and listed some people who would benefit: "Nurses, hospital workers, manufacturing workers, welders, electricians, firefighters, police officers, railroad workers, waitresses, and every worker in Nebraska would no longer pay state income taxes on their wages," he said.

Sen. Paul Schumacher of Columbus asked Omaha Sen. Brad Ashford who would pay the cost. "If its revenue neutral and we take somebody’s taxes down, who’s going up?" he asked.

"I’m sure you’ll figure it out," Ashford replied.

A study for the Open Sky Policy Institute said the 80 percent of Nebraskans with family income less than $91,000 would pay more, and those above would pay less. Ashford said he disagreed with that. Testimony by Heineman, Ashford, and Sen. Beau McCoy occupied the first three hours of the hearing, while two rooms full of supporters and opponents waited their turn.



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