LINCOLN — Gov. Pete Ricketts visited a Lincoln auto repair shop Monday to call for lawmakers to “put the brakes on taxing Nebraska families.”
The governor spoke out one day before lawmakers are to begin debating a major tax and school-aid package. He urged Nebraskans to contact their senators in opposition to the package.
Legislative Bill 289, as put forth by the Revenue Committee last week, seeks to cut property taxes by raising the sales tax rate, applying sales tax to several more services and increasing other taxes.
It would drive down property taxes by boosting state school aid and imposing tighter budget and tax limits on schools.
Lawmakers will start debate on the measure at 1:30 p.m. Tuesday, after getting a second briefing about its multiple components in the morning.
State Sens. Lou Ann Linehan of Elkhorn, the Revenue Committee chairwoman, and Mike Groene of North Platte, the Education Committee chairman, were peppered with questions at an initial briefing Thursday. Among them were queries about how different groups of taxpayers could be affected by the increases in some taxes and decreases in others.
Ricketts has held a series of press conferences taking aim at various new taxes included in LB 289.
Ricketts has appeared at a convenience store to protest taxes on pop, candy, bottled water and cigarettes; joined with home builders and real estate agents to denounce an increase in the fee assessed on real estate purchases; and stood with veterinarians against sales taxes on pet health care.
Monday’s event at Norm’s Auto Repair focused on the proposal to start taxing motor vehicle repairs, a change estimated to bring in more than $18 million a year.
The governor said the average American family spends $817 a year on vehicle repairs. Charging sales tax on that work would cost that average family another $50 or so, including Lincoln’s city sales taxes.
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“Folks, that’s a tank of gas,” Ricketts said. “That’s a week or two of driving around.”
Increasing the sales tax rate by ½ cent, as proposed in LB 289, also would mean paying more to buy a vehicle, he said. Sales tax on a $22,090 Chevy Malibu would be $110 more.
Ian Oehm, an employee at Norm’s, said unexpected vehicle repairs can be devastating for customers, who need reliable transportation to get to work and get things done. Imposing sales tax on the work would add to their burden.
“We can’t afford to keep spending more and more and more on things that are essential,” he said.
Supporters of LB 289 argue that the package makes a significant change in property taxes, the top priority for many Nebraskans. The package includes an increase in the earned income tax credit, which is intended to lessen the impact of higher sales taxes on low-income families.
Sales tax exemptions on the chopping block in Nebraska
To raise new revenue for a property tax relief plan, a legislative bill proposes to do away with about 20 sales tax exemptions. Here are some of the goods and services that would be taxed under Legislative Bill 289, and the amount of revenue those taxes generate.