Fremont Tribune: County, governor ‘completely disagree’ on inheritance tax

By |2018-03-06T14:32:43-06:00December 7th, 2012|News, OpenSky in the Media|0 Comments

Fremont Tribune: County, governor ‘completely disagree’ on inheritance tax

Chris Zavadil/Fremont Tribune
A looming battle over the future of inheritance taxes continues to take shape, including a letter from Gov. Dave Heineman to Dodge County Clerk Fred Mytty in which Heineman wrote, “… we completely disagree on the inheritance tax issue.”

OpenSky Policy Institute, a nonpartisan think tank, released a report concluding that property tax increases would be “highly likely in many counties” if the inheritance tax is repealed.

The Legislature’s Revenue Committee held a hearing Friday to hear ideas for revenue replacement in the event the inheritance tax is repealed.

And Dodge County Supervisors maintained their position that eliminating the inheritance tax would simply shift the burden to property tax payers, and do more harm than good to economic development opportunities.

Heineman’s letter was in response to a letter and resolution the Dodge County board sent in November to the governor and all of Nebraska legislators opposing any legislation to eliminate the county inheritance tax.

Dodge County, in the current budget year, transferred $1.3 million from inheritance taxes, shaving about 4 cents off the property tax levy.

County Supervisors Paul Marsh and Dean Lux, with 57 combined years on the board, said they had never heard a complaint about paying inheritance taxes, but often heard complaints about property taxes.

The governor, in his Nov. 26 letter, however, called the inheritance tax “bad public policy.”

“Forty-two other states do not have an inheritance tax,” he wrote. “It makes Nebraska less competitive. It makes it more difficult for a small family business to transfer its business to the next generation. Retirees leave the state because of the tax.

“I worked with the State Legislature five years ago to eliminate the estate tax,” Heineman continued. “The elimination of the estate tax has resulted in a loss of revenue to the state of approximately $125 million. To account for that loss of revenue, we controlled state spending. We didn’t raise income or sales taxes.

“While I appreciate hearing from you directly, we completely disagree on the inheritance tax issue.”

Dodge County Board chairman Bob Missel on Wednesday said he and other supervisors, “all feel the same way as we stated in our letter, that certainly everybody can appreciate the governor’s position, but in that same breath, by eliminating the inheritance tax, you’re going to increase property taxes in the state of Nebraska, and if somebody’s looking to locate a business or buy a home, they’re going to look at property taxes they’re going to have to pay before they’re going to look at inheritance tax, so I think keeping the inheritance tax in place is the lesser of two evils.”

Missel expects inheritance taxes to be a hot topic during the Nebraska Association of County Officials annual conference at Kearney next week.

The Open Sky report, “Feeling the Squeeze,” concluded that the debate, “reinforces the need to explore comprehensive state and local tax reform.”

Read the full article here.

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