LINCOLN — Gov. Dave Heineman said Tuesday that he can count votes and that there aren’t enough votes in the Nebraska Legislature for his entire, $130 million-a-year tax cut package.
"I think we could do the full plan if we did less spending, but at the same time, I'm a practical and pragmatic guy," Heineman told reporters. "I have a recognition of all the challenges that are out there."
The governor commented after a key state legislator, Sen. Abbie Cornett of Bellevue, floated a less-ambitious tax cut package that preserves proposals Heineman made to cut individual income taxes for low- and middle-income Nebraskans, but drops a reduction in corporate income taxes and elimination of inheritance taxes paid to counties.
Cornett, who introduced the governor's tax-cut plan on his behalf, said there just aren't the votes in the Legislature to eliminate inheritance taxes. She said her compromise plan retains Heineman's top goal: tax relief for "hard-working, middle-class Nebraskans."
County officials have argued that eliminating the $40 million to $48 million in annual revenue from inheritance taxes would translate into an increase in a more despised tax: local property taxes.
Several senators have said the state cannot afford Heineman's plan, which would total $326 million in taxes over the first three years. Cornett's plan would ratchet that cost down by 31 percent, to $224 million over three years.
"It's a first step," Cornett said of the proposal. "I have some other ideas. There's going to be a lot of give and take on everybody's part."
Heineman, in a teleconference call, said he was working with Cornett on a "workable and practical plan" for tax relief for middle-class Nebraskans.
Under Cornett's amended plan, the top individual income tax rate, on married couples earning more than $60,000 in adjusted gross income, would remain at 6.84 percent rather than drop to 6.7 percent as Heineman proposed.
Her plan would keep intact the governor's other proposals for individual income taxes, such as adjusting tax brackets and reducing income taxes for middle- and low-income Nebraskans.
For instance, a married couple with two children and an adjusted gross income of $30,000 would get a yearly state income tax break of about $42 under both proposals. A similar couple with $50,000 in earnings would see a $126 cut.