OMAHA, Neb (KMTV) — There aren’t a whole lot of bills that are going to be passed this year in the Unicameral, but the ones making their way to the governor’s desk have the potential to be among the most impactful legislation passed in recent years.
“These cuts, they don’t put us in the top 10. But they take us from the bottom half of the states into the top 15. That means we start competing, our kids stay here and our grandparents don’t run away,” said Gov. Jim Pillen.
The top 15 that Pillen is referencing have to do with taxes. Specifically, two significant cuts to income and corporate tax rates that were signed into law on Wednesday.
“These tax cuts are all about becoming competitive with the fastest-growing states in the country. For decades, our tax system has not been competitive. We have had some of the higher tax rates in the country. That has held us back in terms of economic growth, ” said Bryan Slone, President of the Nebraska Chamber of Commerce.
Slone says Nebraska has lost out on economic development opportunities to neighboring states with more favorable tax rates.
In Omaha, it is a similar story. The city has a lot going for it, but neighboring states dropping taxes started hurting Omaha’s ability to draw in new business.
“Omaha does a great job; obviously, we hear a lot about great power rates and stuff like that. People work really hard in Nebraska and Omaha but we have to keep all of those things in balance. We were starting to become an outlier, so bringing it down is important,” said Jenn Craeg with the Omaha Chamber of Commerce.
Those tax cuts also mean potential cuts in revenue.
“We are looking at billions of dollars in lost revenue by the time all of these tax cuts fully take effect,” said Rebecca Firestone, executive director for the OpenSky Policy Institute.
The impact of that drop in revenue might not be felt right away, but Firestone is concerned that down the road the drop in revenue might make it necessary to cut services. That would mean cuts to things like schools, healthcare and public safety.
“These are services that all Nebraskans benefit from. The significant revenue reductions we are looking at have the potential, in the long run, to put pressure on the state in terms of making sure we can maintain the quality of services that we have,” said Firestone.
Income tax rates won’t drop to 3.99% overnight. Instead, the cuts will be phased in over the next four years.
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