LINCOLN, Neb. (KMTV) — State Sen. John Cavanaugh of Omaha said Tuesday that he wants his colleagues to stop tinkering with Nebraska’s tax rate on top earners and instead hand middle-class folks $200 on a debit card.
Cavanaugh discussed his direct refund proposal during an OpenSky Institute news conference Tuesday. He said he plans to filibuster the emerging tax-relief package, Legislative Bill 939.
The original intent of LB 939 was to lower the state’s top individual income tax rate from 6.84% to 5.84% after three years. Discussion on that bill could start Tuesday.
“We are claiming that we can bear that cost based off of projections about the future, and estimates about the future just that,” Cavanaugh said. “They’re estimates. They are evidence-based guesses. To put that kind of strain, fiscal strain, on the State of Nebraska in the future is irresponsible.”
As drafted, LB 939 would cut the state’s corporate income tax rate from 7.1% to 5.84% by tax year 2026. But as the Nebraska Examiner has reported, amendments to the bill are bubbling up.
Changes to the tax-relief package are being negotiated by Sen. Lou Ann Linehan of Omaha, Sen. Tom Briese of Albion and others.
Senators are considering adding $200 million in property tax offsets to the income tax cut package, which could itself be tweaked, senators with knowledge of negotiations said.
Cavanaugh’s proposed refunds would cost $400 million in one-time funds, OpenSky estimated. LB 939’s income tax cuts, as written, would cost $400 million a year, ongoing, by fiscal year 2026-27, estimates show.
Tina Rockenbach, executive director of the anti-poverty advocacy group Community Action of Nebraska, said Nebraska’s working families need immediate help with living costs.
“While the COVID-19 pandemic is finally slowing, the negative economic impact on real working Nebraskans seems to have just begun, with record prices for food, gas and utilities,” she said.
Rockenbach said Cavanaugh’s amendment would get more help into the hands of the Nebraskans who need it.
Cavanuagh said income tax cuts would give wealthy Nebraskans thousands of dollars in ongoing relief and would give many struggling Nebraskans $100, half as much as his proposal. And the help would come too late and not be felt the same way as a direct payment.
“We know what our fiscal picture looks like this year,” he said. “Pushing out the implementation of a massive tax cut mostly for rich people and corporations … we don’t know what the fiscal picture is going togonna look like when that bill comes due.”
Nebraska Examiner is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Cate Folsom for questions: info@nebraskaexaminer.com. Follow Nebraska Examiner on Facebook and Twitter.
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