LINCOLN — A co-sponsor of the governor's tax-reform plan is seeking more time to flesh out details of a new proposal.
State Sen. Brad Ashford said Tuesday that he'll ask the Legislature's Revenue Committee to refrain from killing the initial proposals from Gov. Dave Heineman to allow more work to be done on a compromise plan to reduce state income taxes by $1 billion.
Over the weekend, Ashford floated the new plan, which would cut the highest tax rate on state individual and corporate income to 3 percent. That, he said, would be funded by eliminating several sales tax exemptions. But he needs more time to finalize which ones.
The senator will get at least another week to do that. The agenda for the Revenue Committee's executive session today does not include a discussion of the governor's two proposals, Legislative Bills 405 and 406. The committee sets aside Wednesday of each week to discuss whether to advance, amend or kill legislation.
Heineman has proposed eliminating state personal income and corporate income taxes by doing away with nearly 30 sales tax exemptions now enjoyed by manufacturers, farmers, hospitals, churches and other nonprofit groups. The governor also introduced a second, less ambitious plan to eliminate corporate income taxes and to reduce taxes on retirement pension income.
Kearney Sen. Galen Hadley, chairman of the Revenue Committee, was not available for comment Tuesday. He has hinted in recent days that a comprehensive revamping of state tax policy — as sought by the governor and Ashford — might take longer than the current 90-day session.
A member of the Revenue Committee, Fremont Sen. Charlie Janssen, said Tuesday that the tax debate was too big an issue to rush through this year.
“I want to hear from real Nebraskans,” said Janssen, who is set to announce his candidacy for governor Monday.
Many business and agriculture groups have asked that the bills be killed to allow for a more deliberate study of the issue. The governor and his co-sponsors, meanwhile, have insisted the debate should occur this year.
The Greater Omaha Chamber of Commerce is among the business groups pressing for a decision on tax policy this session to remove any uncertainty that could deter businesses from locating or expanding in Nebraska.
The Nebraska Chamber of Commerce — a traditional Heineman supporter — has been more blunt, asking that the governor's bills be killed now so less ambitious tax-cut proposals can be considered.
Several business leaders testified last week that they would move jobs out of the state or put off expansions in Nebraska if the governor's tax proposals, which included new taxes on manufacturing inputs and ingredients, machinery and energy, were enacted.
But Ashford and another co-sponsor of the governor's proposals, Sen. Beau McCoy of Omaha, now say that taxing manufacturing inputs and ingredients — such as the iron purchased to produce steel and the corn bought to make ethanol — is off the table.
Tuesday, Heineman said that he was “not particularly comfortable” with a tax on such inputs after hearing last week's criticism from manufacturers. He said he's “wide open” to new ideas on how to make Nebraska's income taxes more job competitive and is ready to let the “legislative process work.”
“They've got the time to get it done (this year),” Heineman said after an appearance in Lincoln. “There's no right or wrong way. We've got to decide what is the best tax policy to create more jobs and higher-paying careers.”
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