Property taxes still a main theme as tax committee public hearings wrap up
While the tax issues discussed in Omaha and Lincoln Tax Modernization Committee public hearings varied more than they did in hearings in Scottsbluff, North Platte and Norfolk, reliance on property taxes was still a main theme in the state’s two largest cities.
From the Omaha hearing
Douglas County Commissioner Mary Ann Borgeson called on the state to restore aid to local governments. Cuts to local government have led to increased property taxes and Borgeson said Douglas County’s top priority with increased aid would be to lower property taxes.
OpenSky testified in Omaha and we called on the state to lower property taxes with a combination of increased aid to local governments and the enactment of property tax circuit breakers to provide targeted property tax assistance to those who really need it. We also urged lawmakers not to cut state income taxes as such measures do not spur economic growth and do little to help the middle class. You can read our full testimony online and also see more about our ideas for tax changes in this op-ed piece, which ran Sunday in the Omaha World-Herald.
Several others at both hearings spoke out against income tax cuts, including Omaha business leader and philanthropist Dick Holland, who said shifting from income taxes to more sales taxes is harder on low-income Nebraskans who already pay more of their income in taxes than do the wealthy.
Holland also rejected the notion that income taxes drive high earners from the state noting that his many “filthy wealthy” friends love living in Nebraska.
From the Lincoln hearing
In Lincoln, Marlene Johnson, mayor of West Point and president of the League of Municipalities echoed Borgeson’s comments that increased aid to local governments could help bring down property taxes and also bolster investments in key services.
Jennifer Carter of Nebraska Appleseed called for a tax system that did not increase taxes on middle- and low-income Nebraskans or lead to cuts to vital services such as education. The few dollars that some middle-class Nebraskans may save in income tax cuts won’t make up for the loss of a neighborhood school, Carter said.
At both hearings, owners of farm implement dealers implored the state to exempt purchases of repair and replacement parts of agricultural equipment. Larry Stauffer, who owns an implement dealership in Humboldt, told the committee in Lincoln that the state’s current practice of taxing repair and replacement parts causes him to lose business to other states, where such items are not taxed.
In our recommendations for tax changes, we suggested the state look to exempt such purchases to help local merchants compete and to conform with good tax policy, which calls for exemptions on the purchase of business inputs like agricultural repair and replacement parts.
Sen. Al Davis of Hyannis was the final testifier of the hearings and he called on lawmakers to consider taxing intangible property such as stocks, bonds and mutual funds. In preparation for his testimony, Sen. Davis asked OpenSky to estimate revenue gains from an intangibles tax. Our analysis is detailed in this memo.
What’s next
The committee will now compile suggestions and a summary report, which it will present to the Legislature in mid-December. If you have ideas and suggestions for changes to your tax code, we urge you to contact your state senator or a member of the Tax Modernization Committee. You can find the committee members’ contact information on the Tax Modernization Committee website.
OpenSky is continuing our research and analysis and analysis of tax issues and will release more reports and information in the coming weeks.