New, smaller tax overhaul bill draws more opposition - News, Weather and Sports for Lincoln, NE; KLKNTV.com

New, smaller tax overhaul bill draws more opposition

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By: Megan Palera
mpalera@klkntv.com

Gov. Dave Heineman has introduced two plans to overhaul the state's tax system. Thursday's hearing focused on a smaller plan, but one still full of controversy.

There were plenty of familiar faces at the hearing. No one spoke in support, but those against LB 405 are the same people against LB 406 - farmers, manufacturers, health care professional and the Nebraska Chamber of Commerce.

"You have to go the other way with very deliberate picking and choosing that you don't damage our competitiveness. And you don't damage the vigor of key elements of our success," John Cederberg with the Chamber said.

The governor's second plan calls for an elimination of corporate income tax and exempting parts of retirement income. That means certain sales tax exemptions would go away, in turn, generating $395 million in revenue for the state.

Nucor Steel in Norfolk says the plan would keep them from being competitive with other states.

"We'll be forced to bring our own material, not from the steel mill six miles away, but steel mills 7-800 miles away. The $43,000 for the mold and dye now turns to millions for us," Doyle Hopper, GM of Vulcraft and Nucor Cold Finish said.

The state exempts $5 billion - nearly 5 times more than makes in sales taxes. Senator Charlie Janssen of Fremont says something has to give.

"Everybody wanted an exemption. I mean, everybody came to the trough per say. So the conversation needs to be started and where would you be on that?" Janssen said.

The Revenue committee will now tackle both bills. If it makes it out, it heads to the floor where the heated debate continues among senators.

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