Open Sky on property taxes pay-for: Expand the sales tax base and cut the sales tax rate
The Nebraska Legislature calls it quits Thursday, leaving behind several questions.
First and foremost, any further property tax cuts before the end of the year and if so how to pay for them.
One idea now floating inside the Capitol would find more and more sales tax exemptions eliminated, along with a cut to the state sales tax.
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As lawmakers get set to shut things down key tax questions remain, including how to pay for further property tax relief.
Rebecca Firestone heads up the liberal Open Sky think tank.
Joe Jordan, NCN: “Because the question becomes where does the money come from to pay for those changes.”
Rebecca Firestone, Open Sky: “We are hearing right now that there's the potential to look more expansively at the exemptions in our sales tax base. Any expansion of the sales tax base should come with a reduction in the rate.”
Jordan: “So, right now the state sales tax rate is 5 1/2%. Are you saying then you want to have the sales tax rate come down from that 5 1/2%.
Firestone: “That's generally good policy. That if you're going to do an expansion to the base you use those revenues in order to reduce the rate.”
And that's a long way from talk just a few months ago that found Gov. Jim Pillen talking about raising the sales tax.
Gov. Jim Pillen, Nebraska (R): “Fixed income Nebraskans who have lived, worked, and raised their families here now face the prospect of being forced out of their homes due to out-of-control property taxes, That is unacceptable.”
Pillen began demanding a 40% cut in property taxes. Several estimates now find him settling for 20% leaving a lot of political wiggle room.
Firestone: “Right now there's a lot of talk about the potential for a special session; that happens a lot at the end of the legislative session so we're just going to have to wait and see. New revenues are needed in order to get to the type of property tax relief that the administration has been talking about.