- Associated Press - Wednesday, February 5, 2014

LINCOLN, Neb. (AP) - Retirees and low-income elderly residents could see their tax burdens lowered in Nebraska under measures that a legislative committee reviewed Wednesday.

The bills would allow more elderly Nebraskans to qualify for homestead exemptions, and exempt a portion of Social Security income from state taxes. One would ensure that the state’s tax brackets keep pace with inflation.

The proposals were introduced after a series of public hearings held last year by the Legislature’s Tax Modernization Committee. The committee recommended against drastic action in a December report, but lawmakers said they might act this year on tax changes to help retirees.

“It’s important that we get these on the table to talk about them in a more formal sense, and also to see the fiscal consequences,” said Sen. Galen Hadley, the Revenue Committee’s chairman. “… As we go through bills the next couple of weeks, we need an understanding of what impact this is going to have” on future tax revenues and the state budget.

Hadley said expanding the state’s homestead exemption for low-income residents would help more stay in their homes.

“I think it would be fair to say that the Legislature and the state of Nebraska feel strongly that we don’t want to push elderly out of their homes because they can’t pay their property taxes,” Hadley said.

Mark Intermill, a lobbyist for AARP Nebraska, said current state law has a sharp cutoff between residents who qualify for homestead exemptions and those who don’t.

“You can go from a full exemption to no exemption with just a few thousand dollars,” he said.

A married, elderly couple living in Douglas County on a $40,000 annual income would see an estimated $1,618 savings on their tax bill - twice what they would save under current law, according to the OpenSky Policy Institute, a Nebraska tax-policy think tank. A couple that makes $45,000 would see a $647 savings, but the couple doesn’t qualify under current law.


The bills are LB986 and LB987.

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