State Tax Reform

[ItsAllAboutMe]

As much as I love Omaha/Nebraska I'm pretty sure I will not be staying here much longer due to the excessive property taxes.

[Coyote]

Major tax relief bill fails: supporters say it's not over



Major tax relief bill fails: supporters say it's not over

[Coyote]

Nebraska Unicameral passes 'biggest tax cut we’ve done': Decreases income & corporate taxes



The Nebraska Legislature narrowly passed a massive reform package that lowers income taxes on many Nebraskans and all corporations.

[Coyote]

Nebraska Legislature passes historic tax cut plan



Nebraska Legislature passes historic tax cut plan

[Coyote]

Property tax credit provides relief, but you have to apply for it



Many Nebraskans missing out on property tax credit

[skinzfan23]

I actually just checked and I am going to file an amended return after seeing this article, we are going to get an additional $900 return, I would say that is worth it.

[ita]

I know Platte Institute has are very particular view on this subject, but I think this interview with it's Senior Policy Advisor, Michael Lucci, is informative. I specifically liked a response to a question regarding taxes effecting economic decision making. With a consumption tax bill submitted by Erdman, that seeks to eliminate individual and corporate income tax and property tax, I would like the state to explore options to reduce or eliminate some, because trying to get all eliminated doesn't make sense. Ideas that have been floated by some that I think the State should explore include eliminating income tax for individuals making under a certain income (which goes agianst the flat tax rate structure Platte Institute recommends). The tax reform bills submitted Erdman is just too extreme, in particular eliminating corporate income tax and property taxes altogether. I know they just want to talk about tax reform and have conversations going, but why not have a more moderate bill with options that are more realistic to explore?

MICHAEL LUCCI ON THE FUTURE OF NEBRASKA’S TAX POLICY

Jim: So, I’ve been doing this job for a decade now and I hear all the time, opponents down in Lincoln say that there’s no correlation between our taxes and migration. Frequently, Michael, taxes are referred to in terms of the impact on economic decision making. Can you explain that concept a bit more for our listeners?

Michael: There are different ways to apply taxes, and of course taxes are necessary. We have to fund core services. We could debate what to do beyond core services, but we agree that we have to apply taxes.

When taxes distort economic decision making, then those are the types of taxes you want to have less of. When taxes don’t change what economic decisions you’re going to make, those are ones that are going to be more reliable.

I’ll give you an example. If the property tax is applied to real property, which is land and its improvements, you don’t want that tax to be too high. But it’s not going to have a huge distortionary effect on decision making.

Whereas, when you apply the same property tax to things that you can move, such as business inventories, the intangible personal property– the key thing I just said there is, you’re applying it to things that can move.

There are some states, Nebraska’s not one of them, but there are some states that apply a property tax to business inventories. It’s what you have sitting in the warehouse.

Businesses, of course, move those inventories to other states because they don’t want to pay that tax. The tangible personal property tax that Nebraska does have, many states have, gets towards that. Where those things are movable, then you might move some of that business property out of the state, if you can.

On the income tax side, the income tax is just the more distortionary tax of the major taxes. You have income, property, and sales. The income tax is the one that is going to change economic decision making more than the others.

In particular, the corporate income tax will change economic decision making because you want to have income-generating states that tax it less, so people move between states, and businesses move between states.

Because of this, we’ve always seen that. That’s always been picked up in the research. It’s especially coming through now with big moves coming after the pandemic between businesses and families moving between states after the pandemic.

So, the income tax will greatly affect economic decision making. California is an extreme example with 13% and going up. They’re going to be applying more income tax.

You have someone in Silicon Valley who’s making a lot of money, and they can save themselves 13% – 15% just moving to Florida, Tennessee, or Texas. They have massive tax savings just from moving.

[ita]

Nebraska lawmaker continues effort to eliminate property, income and corporate taxes, replace them with consumption tax

Bella Caracta
State Sen. Steve Erdman aims to change taxes in Nebraska through his priority bill, LB79.

“Starting back in [20]17 when I first came, my goal was to eliminate or fix property tax,” Erdman said. “For the last three years, we’ve been dealing with the EPIC Option.”

EPIC Option stands for eliminating property, income and corporate taxes. It proposes replacing those sources of revenue for the state with a consumption tax.

“We had a petition drive to do a 30% reduction. That failed. Followed that with a 35% petition drive, 35% to reduce your property tax. That failed to stop because of the pandemic. For the past three years, we’ve been dealing with EPIC Option, which is to eliminate all property tax, real and personal, all income tax, corporate and individual, sales tax as well as inheritance tax.”
...
Some worry that 7.5% would not balance the budget of the state, including Bryan Slone representing the Nebraska Chamber of Commerce and Industry and Rebecca Firestone from OpenSky Policy Institute, both of whom testified on March 3 in the committee hearing.

“They came up with 22%, and I’ve invited those people to come to my office to prove to me that it’s 22%. I’d be more than willing to show them my study.”

Erdman said his study was conducted by Beacon Hill Institute.

The State Department of Revenue estimates that the bill would lose the state money, resulting in a “net revenue loss of $763 million in fiscal year 2025-26, $2.3 billion in FY2026-27 and $5.1 billion in FY2027-28,” according to a legislative release following the committee hearing for LB79.

I think Platte Institute talked about a 12% consumption tax when it started getting floated around a couple years ago. No way 7.5% covers state costs with some serious cuts to public services.

[Louie]

Consumption taxes disproportionately hurt lower income families. Lower income families have to spend a far larger % of their income on a regular basis and they will feel this hit so hard.

[legato9]

Almighty secular God, I hope this succeeds.

[Athomsfere]

Consumption taxes disproportionately hurt lower income families. Lower income families have to spend a far larger % of their income on a regular basis and they will feel this hit so hard.

And you know that's what this is designed for, to save money for the likes of a Ricketts.

[Louie]

Consumption taxes disproportionately hurt lower income families. Lower income families have to spend a far larger % of their income on a regular basis and they will feel this hit so hard.

And you know that's what this is designed for, to save money for the likes of a Ricketts.

Yep, but its being disguised as helpful for the common man...:eyeroll:

[ita]

So more realistic tax reform is being pushed through the legislature. Tax day produced public comments from the governor and others involved. Coverage here:

Nebraska Gov. Jim Pillen pushes for tax reform on 'Tax Day'

Andrew Ozaki
The clock is ticking to file your tax returns, and Nebraska's governor said time is also running out to cut the state's high taxes.

"Our income tax rates just aren't competitive," Gov. Jim Pillen said.

On Tuesday, he joined lawmakers and tax groups who support his tax reform package.

It calls for more than $6 billion in income and property tax cuts over the next six years.

Those bills are currently in the second round of consideration in the Unicameral.

"If we think status quo, where we're at is the way it is with everything going on, Nebraska goes broke, and my definition of going broke, we start shrinking, and we never get it back. So it's essential. It's essential that we get in the game and get competitive," Pillen said.

State Sen. Lou Ann Linehan said one of the key components of the plan is dropping the state's top income and corporate tax rates to 3.99% by 2027 to keep up with bordering states.
...
Even with March receipts coming in 13% lower than projections, the chairman of the Legislature's budget-writing committee said the state can afford the tax cuts by using record surplus revenues and controlling spending.

"It's important that we move tax relief and spending controls forward together," State Sen. Robert Clements said.

OpenSky Policy Institute executive director Rebecca Firestone is concerned tax cuts will lead to fewer revenues for essential services if there is a downturn in the economy.

"Our projections of that suggest that the numbers really don't add up in the long run," Firestone said.

Nebraska governor joins state senators and tax groups in touting income tax cuts

Paul Hammel
Using “tax day” as a backdrop, Gov. Jim Pillen joined some key state senators and two tax groups Tuesday in touting legislative proposals that aim to reduce Nebraska’s top income tax rate to 3.99% by 2027.

Tuesday was the deadline to file state and federal income tax returns, and the governor and others maintained that the state needs to be more competitive when it comes to taxes.

“It’s really important that we have a tax policy that gets us in the game,” Pillen said.

State ranks 29th
Right now, the Tax Foundation ranks Nebraska 29th in overall business tax climate.

But a bill introduced on behalf of the governor, Legislative Bill 754, would reduce the state’s top personal income and corporate rates to 3.99%, which, if that happened immediately, would place Nebraska at No. 12, advocates said Tuesday.
...
She said that unless Nebraska cuts taxes, it will lose young people and retirees to lower tax states — a view that is disputed by some groups.
,,,
The OpenSky Policy Institute has said that such deep cuts in revenue and increases in state aid are unwise given the shaky state of the economy and may be unsustainable, requiring cutbacks in state services and programs.

The think tank also slams LB 754, saying that three-fourths of the personal income tax benefits will go to the top 20% of Nebraska wage earners. Meanwhile, OpenSky says, the bottom 20% of workers would see cuts averaging $5. Plus, the organization said, more than 80% of the corporate tax cuts would go to out-of-state companies.

[bigredmed1]

Wow, the people who pay the most get the biggest cut in taxes? Kind of like asking person 1 to pay $500 and person 2 to pay $2000 and being upset that a 10% reduction lowers person 2's tax bill more.

[almighty_tuna]

Not to mention the top tax bracket is ridiculously broad at $66,460-$infinity. And let's talk about those "young people and retirees". Median household income for under 25yrs and over 65yrs is $37,748 and $48,639, respectively(1), and would see no benefit from this cut to the top tax bracket. Sorry, repeat the target audience for this tax cut again??

But hey, I'm sure I'm wrong and there is a horde of young professionals making $70k+ in neighboring states waiting with bated breath for LB754 to pass so they can rush to move to Nebraska. Probably ought to have NDOR NDOT expand I-76 so we can accommodate the massive influx of millions of dissatisfied Colorado residents seeking The Good Life.

(1) Source: https://www.incomebyzipcode.com/nebraska

[ita]

Not to mention the top tax bracket is ridiculously broad at $66,460-$infinity. And let's talk about those "young people and retirees". Median household income for under 25yrs and over 65yrs is $37,748 and $48,639, respectively(1), and would see no benefit from this cut to the top tax bracket. Sorry, repeat the target audience for this tax cut again??

But hey, I'm sure I'm wrong and there is a horde of young professionals making $70k+ in neighboring states waiting with bated breath for LB754 to pass so they can rush to move to Nebraska. Probably ought to have NDOR NDOT expand I-76 so we can accommodate the massive influx of millions of dissatisfied Colorado residents seeking The Good Life.

(1) Source: https://www.incomebyzipcode.com/nebraska

The 6.64% tax bracket starts at $29k for individuals and $58k for married filed jointly.

https://www.nebraskalegislature.gov/law ... 77-2715.03

[almighty_tuna]

Ah, thanks for the correction on income bracket range. However, I remain steadfast that this tax cut is not the golden egg it's touted as by any means whatsoever.

[Louie]

There should be higher brackets.

[bigredmed1]

Ah, thanks for the correction on income bracket range. However, I remain steadfast that this tax cut is not the golden egg it's touted as by any means whatsoever.

Short of going to zero on income tax rates, which the ag sector would pop an aneurysm over, and the government sectors would join them in, I feel you are correct in this.

Nebraska needs vast spending reform at a basic paradigmatic level. Too many things get put on budget without any sunset provisions or positive/negative stopping rules. Too many things just are allowed to expand as if there is infinite money without challenging cost benefit analysis.

In other words, our legislature needs to put on their big kid pants and draw some hardlines.

Till that happens, we are just arranging deck chairs.

[ita]

Pillen convenes working group to reform property valuations in Nebraska

Chris Dunker
Gov. Jim Pillen on Monday announced the creation of a working group that will examine ways to reform how property valuations are set in Nebraska.

“Valuation increases in Nebraska have become an unbearable burden for homeowners, businesses and agricultural producers across our state,” Pillen said in a press release.

Under state law, county assessors are responsible for setting property valuations using “accepted mass appraisal techniques.”

That typically includes comparing one property to another of similar size and characteristics like garages, roofs and number of plumbing fixtures.

It also can include examining changes to existing properties, such as adding a room, tearing down a garage or evaluating the effect of outside influences on a property.

While properties are assessed at or near 100% of their actual value, agricultural and horticultural land is assessed at or near 75% of value, under a change made to state law.
...
Pillen said the working group — which includes officials from his office, state senators, agricultural and business groups, and organizations representing communities — would look for a solution to reduce “the burden of insurmountable valuation growth in recent years.”

“It is our job to make sure Nebraska continues to be the best place to live and reckless valuation increases on home and property hinders that commitment to Nebraskans,” he said.

Working group members include State Sens. Lou Ann Linehan of the Omaha area, Brad von Gillern of Elkhorn, Joni Albrecht of Thurston, Eliot Bostar of Lincoln, Mike McDonnell of Omaha; the League of Nebraska Municipalities; the Lincoln Chamber of Commerce; the Greater Omaha Chamber; Nebraska Association of County Officials; Nebraska Cattlemen; Nebraska Farm Bureau; Nebraska Realtors Association; and the Nebraska State Chamber of Commerce.

I hope this group can come to an agreement for possible solutions at the state level. What I would personally like to see is prolonging property valuations, say every 5 years or upon sale and transfer of the property, instead of every year. It would help reduce the load of the assessor's offices as well.

[ita]

All Omaha-area school districts expect to cut property tax rates — a lot or a little

Lauren Wagner
Many Omaha-area property owners could wind up with substantial cuts in their school property taxes next year as all 11 school districts in Douglas and Sarpy Counties are planning to cut their tax levies.

But the impact for individual taxpayers will vary based on the school district where they live and what happened this year to their own property valuations.

The state aid package pushed by Gov. Jim Pillen and passed by the Nebraska Legislature earlier this year is one reason that school tax levies are dropping significantly in some districts. Pillen’s education package boosted state funding for schools, including for special education costs.

Another reason is that the robust real estate market has driven up property valuations, increasing the tax bases for schools and other local governments. As a result, school districts are able to collect just as much in property taxes — if not more — as they did this year, even though they may be reducing their tax levies.
...
Property owners in the Douglas County West district, which includes the Valley and Waterloo area, will see the largest tax levy drop: 14 cents per $100 of assessed valuation. The Westside school district will cut its levy nearly as much, a 13.8-cent decrease. Elkhorn, Papillion La Vista and Millard plan reductions of about 11 cents.

Meanwhile, Bellevue property owners will see a school tax rate reduction of about 3 cents. And in the Omaha Public Schools district, the school tax rate is going down just 1.4 cents.

Companion piece to this evolving issue:

Pillen pushes school boards to slow spending to ease property taxes

Aaron Sanderford Nebraska Gov. Jim Pillen doubled down last week on his effort to curb higher spending by local school districts after the state invested in a tax shift meant to ease property tax bills.

Pillen sent a letter Wednesday to every school board member in the state, the Governor’s Office confirmed. He repeated his push to restrain spending that echoed his Sept. 1 call with superintendents.

Several board members said privately that schools are spending more because of inflationary costs, not greed. One described what the governor is doing as “bullying.” Board members declined to be quoted by name, citing fear of retribution.

Pillen’s letter urges school board members to use all but a sliver of the Legislature’s new $300 million investment in K-12 schools as he and state senators intended — for property tax relief, not for new spending.

The Nebraska Examiner article includes additional informative insight from both sides of the argument, which I didn't include since their website is open access. Anyway, I will include this quote, which I personally find telling of the where this administration and some in the senate want to go with public education:

State Sen. Lou Ann Linehan of Omaha, a Pillen supporter, said this pushback is “why it’s so hard to fix property taxes.”

She said the state is trying to do what school leaders say they want by picking up more of the tab for K-12 education. School boards, she said, want state funding but also want local control of how much they spend.

“If the taxing entities want to keep their taxing authority, they need to become partners with the governor and the Legislature,” Linehan said. “They could lose their taxing authority.”

[legato9]

I never in a million years would have thought I would agree with Pillen about anything.

If he told me 1+1=2, I would be deeply skeptical.

But if anything, I think he is understating the degree to which Nebraska property taxes are completely off-the-rails insane.

Between among-the-highest-in-the-nation property taxes and among-the-highest-in-the-nation homeowner’s insurance premiums, it’s utter mythology that Nebraska is somehow this “low cost of living” haven.

I’ve gone from passively looking to actively looking at other states. I’m seeing that there are plenty where a house costs 30%+ more than mine, but the payment would be the same or less after accounting for property taxes and insurance premiums.

[S.O.Boy]

People are unhappy about their taxes. The largest chunk of the taxes goes to the school district. And yet whenever there bond issue for the school district, it easily passes.

[legato9]

People are unhappy about their taxes. The largest chunk of the taxes goes to the school district. And yet whenever there bond issue for the school district, it easily passes.

It seems like whenever there’s a bond for anything, it passes overwhelmingly.

I often wonder if people even understand what they’re reading when they vote.

[S.O.Boy]

People are unhappy about their taxes. The largest chunk of the taxes goes to the school district. And yet whenever there bond issue for the school district, it easily passes.

It seems like whenever there’s a bond for anything, it passes overwhelmingly.

I often wonder if people even understand what they’re reading when they vote.

Excellent point.

[legato9]

Been seeing signs for EPICoption.org. Curiosity got the better of me, so I checked it out. Turns out that it would, among other things, eliminate the property tax in Nebraska.

Perhaps needless to say, I immediately got out my credit card and donated.

This $hit won’t change if we leave it to others.

Get out your credit cards, friends!

[nativeomahan]

And how much would sales and income taxes have to be increased by to make up for the lost property tax dollars? Would we all be happy with an 18% IVA tax on everything and anything (goods, services) we purchase? Maybe a $100 park entry fee, and $5 a trip to drive down I-80 in Omaha, each way? Maybe the wheel tax and car taxes would triple? There is no free lunch.

[legato9]

It would also dispense with income tax.

But regardless, property tax is by far the most insidious tax, because you can’t control it. You have no clue what your house payment will be in two years.

You can control many of your purchases, though. Sales tax too high? Hold off on buying that new car or computer. Property tax too high? What’s your choice? Sell your house, pay realtor fees, and move?

Not only that, but sales tax is far more visible. I doubt even 10% of renters have the first clue about how much of their rent goes to property tax. (To say nothing of the renters who don’t even think they pay property tax *at all*.)

Nebraska property taxes are utterly insane. Something has *got* to change. And dramatically so.

This is our chance.

[bigredmed1]

And how much would sales and income taxes have to be increased by to make up for the lost property tax dollars? Would we all be happy with an 18% IVA tax on everything and anything (goods, services) we purchase? Maybe a $100 park entry fee, and $5 a trip to drive down I-80 in Omaha, each way? Maybe the wheel tax and car taxes would triple? There is no free lunch.

Tolls on the interstate face legal obstacles, but the game and parks fees should increase to the point of general fund neutrality as should the Newborn Screening Program and some if not all of the specialized programs of the NU system. We subsidize undergrad and ag is funded through the land grant, but grad programs and other non essential programs should be able to stand on their own.

[TitosBuritoBarn]

Here's part of the reason why Nebraska has such high taxes and whey it will continue be a problem. We have too many roads to nowhere...

Nebraska Department of Transportation estimates 15% funding increase to cover highway needs

https://omaha.com/news/state-regional/g ... the-latest

This is a marked shift from last year's assessment, which estimated the 20-year funding needs would drop about 2% from the prior year's estimates. At a joint meeting of the Nebraska Legislature's Appropriations and Transportation Committees Wednesday, Kramer attributed the rise to a variety of factors, mainly inflation and supply-chain issues.

"Our annual needs is currently outpacing our annual program," she said.

The $16.7 billion is divided into three primary categories in the report, accounting for various highway needs: asset preservation, system modernization and capital improvements.

Asset preservation is projected to cost $9.7 billion over 20 years, with most of those dollars going toward pavement preservation, and the remaining $958 million going to bridge preservation.

System modernization and operation costs are projected to be $2.4 billion, divided between roadway modernization, rail crossing and rural transit modernization, and bridge modernization.

Capital improvements will take the remaining $4.6 billion listed in the report, with the majority of that funding going toward roadway expansion. That includes an ongoing, long-delayed project to establish a 600-mile expressway system.

The expressway project originated in 1988, identifying 16 corridors over 600 miles with the intent to connect every Nebraska community larger than 15,000 people to an Interstate with a four-lane, divided expressway. It was projected to be completed in 15 years, but multiple delays extended the project more than three decades.

NDOT wants $4.6 billion for expansion and they can't currently afford to maintain what they have. Most of what they maintain is highways and there is very little congestion and very few if any population centers without connectivity. Something they should think about before allocating $4.6b to expanding the system.

[Louie]

Here's part of the reason why Nebraska has such high taxes and whey it will continue be a problem. We have too many roads to nowhere...

Nebraska Department of Transportation estimates 15% funding increase to cover highway needs

https://omaha.com/news/state-regional/g ... the-latest

This is a marked shift from last year's assessment, which estimated the 20-year funding needs would drop about 2% from the prior year's estimates. At a joint meeting of the Nebraska Legislature's Appropriations and Transportation Committees Wednesday, Kramer attributed the rise to a variety of factors, mainly inflation and supply-chain issues.

"Our annual needs is currently outpacing our annual program," she said.

The $16.7 billion is divided into three primary categories in the report, accounting for various highway needs: asset preservation, system modernization and capital improvements.

Asset preservation is projected to cost $9.7 billion over 20 years, with most of those dollars going toward pavement preservation, and the remaining $958 million going to bridge preservation.

System modernization and operation costs are projected to be $2.4 billion, divided between roadway modernization, rail crossing and rural transit modernization, and bridge modernization.

Capital improvements will take the remaining $4.6 billion listed in the report, with the majority of that funding going toward roadway expansion. That includes an ongoing, long-delayed project to establish a 600-mile expressway system.

The expressway project originated in 1988, identifying 16 corridors over 600 miles with the intent to connect every Nebraska community larger than 15,000 people to an Interstate with a four-lane, divided expressway. It was projected to be completed in 15 years, but multiple delays extended the project more than three decades.

NDOT wants $4.6 billion for expansion and they can't currently afford to maintain what they have. Most of what they maintain is highways and there is very little congestion and very few if any population centers without connectivity. Something they should think about before allocating $4.6b to expanding the system.

And it’ll only get worse with more roads. Brilliant.

[Garrett]

My grandparents lived in Northeast Nebraska, so I’ve seen the very slow progress of 275 for basically the entirety of my 29 year life. It’s absurd.

[Renovator2559]

Those small towns outside the i80 line, are just shrinking, do we honestly need to waste more funds widening the roads to these places? Those 4.6 billion could serve better to strengthening the highways that pass through major population centers along the i80 area.

[almighty_tuna]

Those small towns outside the i80 line, are just shrinking, do we honestly need to waste more funds widening the roads to these places?

Great gravy mavis, I agree.

[Louie]

Those small towns outside the i80 line, are just shrinking, do we honestly need to waste more funds widening the roads to these places?

Great gravy mavis, I agree.

I am shockingly thinking the same thing. Along those same lines is the conversation of county consolidation. There are like 40 counties that have less population than Gretna.

[ita]

Gov. Pillen loads up pitch to raise state sales tax by 2 cents, to shift taxes away from property

Paul Hammel
Gov. Jim Pillen, in his quest to reduce local property taxes, has loaded up a self-described “bold and courageous” proposal to decrease property taxes via an increase in state sales taxes.

The state sales tax rate would climb by 2 cents, from 5.5 cents to 7.5 cents, the Examiner learned Tuesday. Revenue from the 36% hike in sales taxes would be used to help lower local property taxes — a “tax shift” rejected by former Gov. Pete Ricketts as really a tax increase.

A spokeswoman for Pillen said that the “bold and courageous” idea has been prompted by the failure of other recent efforts to decrease local property taxes.

“Nebraskans cannot afford to keep watching their property taxes skyrocket, with absolutely no relief in sight,” spokeswoman Laura Strimple said Tuesday.

A state sales tax rate of 7.5% in Nebraska would make it the highest in the country, according to the Sales Tax Institute, as of Jan. 1.

The tax shift is the keystone of Pillen’s promised “transformative” proposal on property taxes to reduce them from a total of $5 billion a year on all taxpayers to $3 billion. The plan includes a tougher lid on local spending.

[Louie]

"Bold and courageous" Lol.

[Athomsfere]

"Bold and courageous" Lol.

Yep, looks like just a way to move the cost to the poorest and saving the most money for the people with all the assets. Yay, Pillen.

[Louie]

"Bold and courageous" Lol.

Yep, looks like just a way to move the cost to the poorest and saving the most money for the people with all the assets. Yay, Pillen.

Exactly, we all know that sales tax disproportionately affect the poorest. And while property tax savings affect us all, the biggest benefactors are those with large swaths of land and buildings...

[ita]

OWH also has an article with some additional details, including an increase in the cigarette tax:

Pillen property tax plan would hike Nebraska sales, cigarette taxes

Martha Stoddard
Gov. Jim Pillen is floating a plan to provide property tax relief by raising the state sales taxes to a nation-leading 7.5 cents and boosting cigarette taxes by $2 a pack.

The plan calls for using the new revenue, estimated at about $1 billion annually, to replace some of the property taxes levied by schools and other local governments.

Together with proposed caps on property tax collections and legislation passed last year, the proposal would reduce the amount of property taxes paid statewide by an estimated $2 billion, according to an outline from the Governor’s Office.

Laura Strimple, a Pillen spokeswoman, said the governor’s plan is aimed at achieving a “historic, 40% reduction” in property taxes.

“With this tax reform solution, Nebraska’s sales tax rate would be in line with other low-tax states such as Texas, Tennessee and Arizona while at the same time significantly reducing our property tax burden from 7th highest in the country to 29th,” she said.
...
But he’s not convinced about increasing cigarette taxes, saying that he doesn’t like using taxes to change behavior. The proposal would increase state taxes from 64 cents per pack to $2.64.

Sen. Steve Erdman of Bayard, a leading proponent of replacing almost all Nebraska taxes with a consumption tax, offered the harshest view of the governor’s plan. He said it would increase taxes on seniors and people with fixed incomes while simply reducing the increase in property taxes.