Debate on income tax proposal ends after filibuster
A bill on select file that would cut Nebraska’s top individual and corporate income tax rates over several years was pulled from the agenda March 22.
LB939, as introduced by Elkhorn Sen. Lou Ann Linehan, would cut Nebraska’s top individual income tax rate in three steps, from the current 6.84 percent to 5.84 percent by tax year 2025.
As amended on general file, the bill also would cut the state’s top corporate income tax rate from the current 7.5 percent to 5.84 percent by tax year 2026.
The state Department of Revenue estimates that LB939 would reduce state general fund revenue by $63.6 million in fiscal year 2022-23. That amount would grow to $415.7 million by FY2026-27.
Sen. Tom Briese of Albion supported the bill. He said a pending amendment contains the provisions of his LB723, which would ensure that a state tax credit intended to offset part of Nebraskans’ property tax bills does not fall below its current amount.
The amendment also would slow the proposed income tax rate reductions so that both rates reach 5.84 percent by tax year 2027. Additionally, it would create a refundable tax credit based on the amount of property taxes paid to a community college.
Omaha Sen. Machaela Cavanaugh opposed LB939 and filed a series of motions intended to delay a vote on the bill. She said the proposal would “bankrupt” the state once fully implemented and would not benefit low- and middle-income Nebraskans.
After approximately one hour of second-round debate, Speaker Mike Hilgers of Lincoln said he would “skip over” LB939 at Linehan’s request. It will not be considered again this session, he said.
Hilgers said Linehan intends to file the pending amendment on another prioritized bill heard by the Revenue Committee this session.
Senators then moved to the next item on the agenda.