Nebraska lawmakers on Wednesday gave first-round approval to a record $900-million dollar tax cut package created by putting together separate bills on social security and income taxes.
The package was stymied twice last week by filibusters tied to bills on criminal justice reform and how to spend the state’s billion dollars in federal COVID and infrastructure stimulus money.
It took some legislative gymnastics to get the package passed. The tax cuts were amended into LB 873 as 5 amendments, each requiring separate approval of 8 hours of debate that lasted into the evening.
The bill cuts the top rate for individual and corporate income taxes to 5.84%, speeds up the phase out of income taxes on social security, and creates a new tax credit on income taxes for property taxes supporting community colleges.
The refundable income tax credit for community college property taxes would start next tax year with $50-million dollars and grow to $195-million 3 years later. Future increases would be limited to a maximum of 5%.
Supporters say the full package makes Nebraska more attractive to seniors and businesses and more competitive with its neighbors, but although the bill received unanimous approval after a cloture vote, opposition remains.
The big sticking point for them is the income tax reductions. A couple earning $60,000 or less gets no break, those making $100,000 get $189 back, and 80% of the corporate cuts go to out-of-state firms.
There’s still a possibility a filibuster could stop the tax cut package depending on whether the current plan for spending the stimulus money gets final approval and if the criminal justice reform bill passes.