LINCOLN — The Legislature now has two, very similar tax-study proposals to mull over.
The latest one, advanced by a legislative committee on Wednesday, appears to be gaining supporters because it would avoid a lengthy debate. Omaha State Sen. Ernie Chambers has vowed to kill the initial tax-study proposal.
The Legislature's Executive Council voted to advance the second proposal in hopes of avoiding a long and nasty debate with only 17 days left in the 2013 session.
“That's how I looked at it,” said Speaker of the Legislature Greg Adams of York.
Tax reform was a leading issue going into the session, but Gov. Dave Heineman's dramatic tax-shift proposals were shot down due to opposition from farm, business and nonprofit groups. The governor had proposed reducing or eliminating state income taxes and shifting the tax burden onto sales taxes, by doing away with about two dozen tax exemptions.
Instead, state lawmakers decided to conduct a comprehensive study of state tax policy, including whether the state offers too many sales tax exemptions and taxes retirees too heavily.
Senators threw their support behind Legislative Bill 613, a measure introduced by Columbus Sen. Paul Schumacher and five other senators to create a Tax Modernization Committee. Under the bill, a panel of state legislators would study tax policy and offer recommendations in December.
But LB 613 ran into an eight-hour filibuster from Chambers during first-round debate. During the debate, the senator vented his anger with the Legislature's Revenue Committee for failing to advance his proposal to rescind a law passed last year allowing cities to increase local sales taxes by a half-cent.
Chambers, who in his 39th year as a state senator is considered the dean of the Legislature, also argued that senators didn't need to pass a law to conduct a study. Instead, they could do that through a less formal legislative resolution.
On Wednesday, he introduced that alternative to the Executive Council, which voted 7-1 to advance it to debate by the full Legislature.
Legislative Resolution 155 is virtually identical to LB 613, but would require only one round of debate (instead of three for a bill).
It also does not require approval by the governor and could take effect immediately. Bills passed by the Legislature typically do not become law for 90 days.
Lincoln Sen. Kathy Campbell said a resolution allows more flexibility than a bill, which must be amended. She said a resolution was used to create the legislative oversight committee that proposed changes to the state's troubled effort to privatize child-welfare services.
What happens next is up in the air.
Second-round debate on LB 613 is expected to be scheduled soon, unless its main sponsor, Schumacher, decides to withdraw it from the agenda.
After Wednesday's vote, Schumacher said he hadn't yet decided what to do. But he noted that even if his bill is debated and fails to advance, a tax study would likely happen via LR 155.
“It looks like we're going to have a study one way or another,” he said.
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