Nebraska state senators make progress on tax cuts

Lawmakers voted to lower the top income tax rates

LINCOLN, Neb. (KLKN) – A tax package was once again on the debate floor of the Nebraska Legislature on Wednesday, only this time, the items were separated and voted on one by one.

State senators voted to lower the top income tax rate from 6.84% to 5.84%, which would still be higher than the top rates of surrounding states.

“The sky is not falling. When it does, the Legislature and the governor will adjust revenues like it has for the past 150 years,” Sen. Tom Brandt said. “We are trying to balance things. Right now, we have a surplus of revenue, and the logical thing would be to give it back to the taxpayers.”

Some senators have reservations about lowering taxes, worrying that the state won’t have enough revenue to handle unforeseen circumstances.

“Whether or not there is a storm to be weathered, when there are economic downturns,” the state needs to have enough revenue to cover expenses, Sen. Tony Vargas said.

Sen. Carol Blood, who is running for governor, expressed similar concerns.

“If we were a business and we wrote a feasibility assessment, we would be looking at what’s going on in the next decade and the decade after that,” she said. “So I have concerns about the amount of revenue that is going to be generated in the future. I don’t see any trends that the demographic, agewise, is really going to change that much in Nebraska.”

A big goal for senators is finding ways to gain and retain young people in the state, and some senators worry that if nothing is done with taxes, it could have a detrimental impact.

“My district borders three different states: Iowa, Kansas, and Missouri,” Sen. Julie Slama said. “We have a large number of people who choose to live in Iowa, Missouri and Kansas and work in Nebraska to take their money, their houses, raise their kids in a state other than Nebraska because of our tax situation.”

They will continue working on three more tax-related items in the package, including property tax relief and phasing out taxes on Social Security benefits.

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