Gov. Pete Ricketts and a number of business spokesmen said Monday that pending legislation to reduce Nebraska’s individual income tax rate is key to attracting and retaining workers, families and businesses in the state.
“We need to be competitive,” Ricketts said during a news conference with Bryan Slone, president of the Nebraska Chamber of Commerce and Industry, and representatives from one small and one large Lincoln business.
Nebraska’s comparatively high state income tax rate currently is an incentive for families to leave the state, the governor said.
An income tax reduction bill (LB939), introduced by Sen. Lou Ann Linehan of Elkhorn, is awaiting first-stage floor consideration in the Legislature with a number of proposed amendments pending.
The proposal would incrementally reduce the top income tax rate for individuals from 6.84% to 5.84%, providing parity with the top corporate income tax rate.
The impact on state government revenue would rise incrementally from an initial reduction of $62 million in fiscal 2022-23 to $363 million in fiscal 2026-27, according to estimates.
“If we continue to control (state government) spending,” Ricketts said, the state can continue to deliver tax relief.
Some $548 million in additional property tax relief is being provided now through a refundable income tax credit on property taxes paid to support public schools, the governor said.
And the Legislature, with his support, is now accelerating elimination of state income taxes applied to Social Security benefits, moving the timetable up from 10 years to five years, he noted.
Slone stressed that the proposed income tax reduction will affect teachers, farmers and young people.
“It’s not just a tax break for the rich,” he said.
Scott Gubbels, executive director of tax and renewable energy services for Nelnet, said the income tax reduction could be “a game-changing move” that would incentivize growth, investment and residency in Nebraska.
And that in turn, he said, would expand the tax base.
Adam Kavan, owner of Kavan Custom Construction, said the proposal represents “a big step in the right direction” in terms of incentivizing people to want to live in Nebraska and, in terms of his small business, “allowing us to make strategic investments.”
The proposed tax reduction would assist more than 60% of Nebraska families, Ricketts said.
Meet the state senators making laws in 2022
Lou Ann Linehan
John Lowe Sr.
Patty Pansing Brooks
Reach the writer at 402-473-7248 or email@example.com.
On Twitter @LJSdon
Get the latest local business news delivered FREE to your inbox weekly.