By: Lauren Fabrizi
The Cornhusker State might be seeing some tax breaks.
Bill 1097 aims to cut down income taxes. If approved, people in every tax bracket would see a decrease.
"We think the state can afford a tax break for working class folks and small businesses, and we think it's appropriate to do so," Joseph Young of the Greater Omaha Chamber said.
Economists gathered Friday to offer up recommendations that would make the Nebraska tax system more competitive against neighboring states.
Economists said states like Iowa, Wyoming and South Dakota have lower tax burdens than Nebraska, which makes moving out of Nebraska more desirable.
To keep Nebraska's economy growing, economists want to cut taxes throughout the state by 5 percent per year for five years. They also want to get rid of tangible personal property taxes (i.e. taxes on things like machinery, equipment and vehicles).
"The system of taxation in Nebraska needs to be changed a bit to move the state toward a more competitive tax system for what I would call a 21st century," economist Ernie Goss said.
"You've got more mobile labor, you've got more mobile capital – whether that's machinery or equipment or financial capital – it's far more mobile than it ever was," economist John Anderson added. "As a result, you got to be careful about a tax system that might provide incentives for those mobile resources to relocate."
Even though it has higher tax burdens than its bordering states, economists said Nebraska is in a good spot financially. They said by the end of this fiscal year, the state will have a record cash reserve of about $725 million, which would allow for the proposed tax breaks, and ultimately, make people and businesses want to stay in Nebraska.
There will be a public hearing for the bill on Feb. 13 before the revenue committee. After that, it would need to go through three rounds of approval on the legislative floor before being handed off to the governor.