The Tax Modernization Committee has been meeting to reevaluate how Nebraska should fund the costs of local and state government.
Although I am not on that committee, I have been following their activities with a great deal of interest since taxation affects all of Nebraska.
The Tax Modernization Committee was formed following the introduction of two bills in the legislature last winter which proposed significant changes to the state's sales and income tax. At the behest of Gov. Heineman, the proposals eliminated or reduced both corporate and personal income tax, and repealed almost all sales tax exemptions.
There was a huge outcry from people all across the state about this radical shift in taxation, and both bills were pulled from consideration. Later, Sens. Chambers and Schumacher worked on a resolution to create the Tax Modernization Committee.
The resolution was passed and the committee took shape.
Committee members include all of the senators who serve on the Revenue Committee and the chairpersons of several other legislative committees. Sen. Galen Hadley is chair of the Revenue Committee and heads the Tax Modernization Committee. The committee has split into three sub-committees to deal with sales, property and income taxes.
I attended the first session in Lincoln where an overview of the tax structure was presented by staff members of the Revenue Committee and other experts.
The one comment which really caught my ear was a statement made by staff member Bill Lock, concerning property tax valuations, which Lock said are much higher in Nebraska than in any of our surrounding states.
That’s probably no surprise to most Nebraskans, but it demonstrates that property taxes are more out of line in Nebraska than are income taxes.
That argument was reinforced last week when I attended another meeting of the Education Committee, on which I sit. Renee Fry, the CEO of the Open Skies Policy Institute, testified before the committee about problems they feel need to be addressed in distributing state funds to school districts.
Fry said that property taxes are footing more than 45% of the cost of education in Nebraska. Fry believes that this figure should be around 33%, which would be a reduction in property taxation of nearly 1/3.
Because I campaigned on the property tax issue, I am particularly interested in addressing that problem. I am now asking for your help. I am looking for individuals who are willing to share some of their personal income tax information with me so I can share it with the tax policy analysts.
We are looking for data detailing gross income and the dollars devoted to property taxes from that income. As an example, one of my constituents has a gross income of $24,000 on her ranch but pays out $12,000 towards property tax. Maintenance amounts to about $2,500 on her property, so she is only left with $9,500 to live on.
If you are willing to help us with this work, please contact my staff at the Capitol.
We will provide forms for the information to be constructed, or we could use your personal income tax forms to put the data together but promise that all information will be kept strictly confidential.
This tax overhaul will be the first major change in tax policy since the sales and income tax were installed in the late l960s, so it is important that all Nebraskans are involved in the process.
As always, I value your input, and welcome phone calls, emails and personal visits from you.
Sen. Al Davis, State Capitol, PO Box 94604, Lincoln, NE 68509, (402) 471-2628, firstname.lastname@example.org.