- Associated Press - Wednesday, April 2, 2014

LINCOLN, Neb. (AP) - Nebraska Gov. Dave Heineman announced Wednesday that he will sign tax relief bills into law this year totaling more than $412 million over the next five years.

Heineman signed three of the measures at a news conference Wednesday and said he planned to sign two others this week. A sixth proposal became law over the weekend.

The new laws include an indexing measure to ensure income tax brackets keep pace with inflation, a sales tax exemption on farm machinery, a $25 million increase to Nebraska’s property tax credit program and an expansion of the state’s homestead exemption.

Heineman said he also expects to sign a homestead exemption measure aimed at veterans and a bill that would provide sales-tax exemptions on purchases made by historic car museums, gold and silver bullion sales and U.S. postage charges.

“I am pleased that we are able to conclude the 2014 legislative session with responsible, meaningful and significant tax relief,” Heineman said. “This is a very exciting day.”

Heineman said he was “pleasantly surprised” at the size of the tax cut measures as they worked their way through the Legislature, but he stayed quiet out of fear that a public statement could jeopardize them. The Republican governor has complained over the last few weeks that lawmakers haven’t done enough to lower property taxes; some Democratic senators have argued that the Legislature led the way in this year’s tax debate.

The combined bills will cost the state an estimated $48.9 million in the fiscal year that begins in July. By fiscal year 2019, the laws will cost an estimated $114.9 million.

Virtually all of that increase comes from the new state indexing law, which seeks to address cost-of-living salary increases. Over time, those salary increases can bump taxpayers into higher brackets, where they end up paying more even as their buying power stays the same. The new law will allow the brackets to expand automatically with inflation.

Heineman made the announcement alongside 11 Republican state senators, including three who are running for higher office.

Lawmakers passed the bills in the wake of statewide tax study by the Legislature’s Tax Modernization Committee.

“These are significant tax reductions when you look at them over a period of time,” said Sen. Galen Hadley, the committee chairman.

Hadley, of Kearney, said he wants to continue work over the summer on possible reforms to the way farmland is taxed. Hadley said he also wants to look at the state income tax, to see if it can be lowered by eliminating sales-tax breaks.

Copyright © 2018 The Washington Times, LLC.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide