Below is a statement from OpenSky Policy Institute Executive Director Dr. Rebecca Firestone regarding LB 388, the tax shift that would reduce property tax revenues through a shift to sales taxes.
“Last year, the Legislature made a choice to pass record income tax breaks for the wealthiest Nebraskans and out of state corporations, and now, when property tax cuts are the priority, the solution is a tax shift onto consumers that does little to help working families and small businesses facing economic challenges.
“Increasing state support for schools is a necessary step to address Nebraska’s longstanding overreliance on property taxes. But that support should be directed to address educational outcomes and not simply provide property tax relief to property owners – many of whom are out of state – through a sales tax increase on hardworking Nebraskans.
“We encourage negotiations on select file to ensure that property tax relief is sustainable for the state and tax changes are beneficial for everyday Nebraskans.”
Proposed tax shift benefits wealthy Nebraskans
The Institute on Taxation and Economic Policy modeled the proposed tax shift and, on average, the 5% of Nebraskans with incomes over $252,600 will pay less as a result of the changes, while for 8 in 10 Nebraskans, the sales tax increase will on average be greater than any property tax cut they may receive.