LINCOLN — Gov. Dave Heineman, whose job performance received high marks in The World-Herald Poll, said he's exploring “bold” proposals during his final two years in office, including at least considering eliminating the state income tax.
Such a proposal, while still in the talking stage, would put Nebraska in line with seven other no-income tax states, including Texas, Wyoming and South Dakota. It also would harken back to the 1950s when the Cornhusker State was known as “The White Spot of the Nation” for levying neither a state income or sales tax.
It's the kind of daring idea, Heineman said, that might help increase the state's population, and help him accomplish one of his major goals — attracting high-paying, high-quality jobs to Nebraska.
“Ultimately, we have to decide, with the Legislature: Are we willing to take some bold steps to make us even more competitive in the future, competing in a global economy?” the Republican governor said.
“I think Nebraskans are willing to listen to that discussion,” said Heineman, 64. “They want an opportunity for their kids and grandkids to live here. The only way they're going to be able to live here is if we're creating better, high-skilled, high-paying jobs in the future.”
The two-term governor, during an hourlong interview this week over a wide range of topics, emphasized that the elimination of the state income tax is still in the “idea” stage. Heineman said he won't decide until mid-January whether it's a feasible proposal, or whether he might move ahead with other tax changes, including cutting the state sales tax or seeking a removal of state taxes on Social Security and military pension income.
“Right now, every option is on the table,” the governor said.
The comments came after The World-Herald Poll found that 74 percent of Nebraskans approve of the governor's job performance. Only 16 percent said they disapproved, while 10 percent had no opinion or weren't sure.
Heineman said he was pleased to be above 70 percent, saying it reflected “that we work hard” and “listen carefully.”
“I think I have a very good sense of what Nebraskans want me to focus on,” he said, which is providing a good education and good jobs in the state.
Heineman's approval rating was highest in western Nebraska's 3rd Congressional District (83 percent) and lowest in the City of Omaha (66 percent). Even 56 percent of Democrats and 58 percent of supporters of President Barack Obama said they approved of Heineman's job performance.
It was the first time The World-Herald Poll has measured Heineman's approval rating. When compared to the highest approval ratings of the six previous Nebraska governors, Heineman falls in the middle of the pack.
The most popular governors, as measured by past World-Herald Polls, were Mike Johanns, who received an 81 percent favorable rating in September 2000, followed by Ben Nelson and J.J. Exon, both 80 percent.
Interestingly, when Nebraskans were asked for their “impression” of Heineman, the favorable numbers were lower: a total of 58 percent favorable. A decent portion of Nebraskans, 25 percent, were “neutral.”
Heineman was unsure what to make of the higher job approval number compared with the positive impression number.
“I look at the approval rating. To have that in the 70s is difficult to do,” he said.
Greg Petrow, an associate professor of political science at the University of Nebraska at Omaha, said it appears that Nebraskans are judging the governor based on the strength of the local economy (the state has the second-lowest unemployment rate in the country) and not on what they know about him.
“People don't really have a strong sense of who the governor is as a person,” he said.
Vince Powers, chairman-elect of the Nebraska Democratic Party, said Heineman's high approval rating has less to do with his performance than with the failure of Democrats, including himself, to point out the governor's shortcomings.
Those, Powers said, include the troubles at the Beatrice State Developmental Center and the problem-ridden move to privatize the state's child-welfare system.
“It's a two-party system, and our party didn't do its job,” he said.
The World-Herald Poll of 800 registered voters was conducted Sept. 17 through 20 by Wiese Research Associates of Omaha. It had a margin of error of plus or minus 3.5 percentage points.
Overall, Heineman said he has a lot of work ahead.
He wants to continue urging reforms in the state's education system, including a focus on hiring “great” teachers, improving academic performance and graduation rates, recognizing educational excellence and expanding the school day and school year.
“We haven't changed the school day or school year in 100 years. That's ridiculous,” the governor said.
He said he is proud of the progress that has been made to improve Nebraska's tax climate. The state's tax climate for new businesses was ranked No. 1 earlier this year by the Tax Foundation, a nonpartisan tax policy group.
Even so, Heineman said, more needs to be done.
Eliminating the state income tax would be a whopper, representing about half of the taxes collected by the State of Nebraska each year to finance state services such as prisons, higher education and social services.
To replace the $1.8 billion in revenue from income taxes, Heineman agreed that the state would have to look at doing away with several sales tax exemptions.
The biggies include tax exemptions on purchases of food ($139 million), farm machinery and chemicals ($155 million), component parts for manufacturers ($756 million), and purchases made by churches and other nonprofit organizations ($78 million).
Heineman said he's not ready to talk about which specific tax exemptions he's looking at. Right now, he said, he's assessing whether there's evidence that elimination of the state income tax would dramatically affect job growth, and whether there's political support for it.
“I've got two years and three months, and I've got a lot of things to do,” he said.
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