‘Biggest tax cut bill’ in Nebraska history passed by Legislature

A nearly $900 million-dollar tax cut passed 43-0 in the Nebraska Legislature.

LINCOLN, Neb. (KLKN) – On Thursday, a nearly $900 million-dollar tax cut was passed 43-0 in the Nebraska Legislature.

“I think it’s the biggest tax cut bill that we’ve ever passed in state history,” Speaker Mike Hilgers said.

The bill will cut the top individual and corporate income tax rates to 5.84% by 2027. That’s down from 6.8% for individuals and 7.5% for corporations.

“It’s the most significant income tax cut,” Hilgers said. “It makes us competitive with other states, give more families more of their own money back.”

Gov. Pete Ricketts said it was “a great day.”

“That’s what we ought to do when we have revenues that exceed what we need to run state government,” he said.

The bill will also create more income tax credits for property owners, who will be able to get back money that they pay in community college taxes.

Income taxes on Social Security benefits would also be eliminated by 2025.

“It hits all of the different markers, and I think it’s going to be significant for a large number of Nebraskans,” Hilgers said.

Rebecca Firestone, executive director of the OpenSky Policy Institute, said there are three problems with the bill: It gives tax cuts to a number of out-of-state corporations, is expensive for the state and does not help Nebraskans who could most use the tax relief.

“In a time when people are still struggling to recover from the pandemic, the Legislature had an opportunity to provide more direct relief to everyday Nebraskans, but this tax package is not it,” Firestone said.

Lawmakers also overrode Ricketts’ vetoes of three bills, including one that will increase provider rates by 15% for nursing homes.

Ricketts said he can live with that, if it means tax relief for Nebraskans.

“As with every bill, every budget, it’s a negotiation between the Governor’s Office and the Legislature, and this is where the Legislature ended up,” Ricketts said. “At the end of the day, this is still a great day for Nebraska because of the historic tax relief the Legislature passed.”