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Governor calls for discussion on tax reform
When Governor Dave Heineman stood in front of the Nebraska Legislature in January, he introduced his bold tax reform plan.
Fast forward just 30 days; those plans have been scrapped. Instead of an overhaul, the governor is asking for a conversation.
The proposals drew a drumbeat of criticism, especially from farm and business interests.
His decision Saturday to ask the Revenue Committee to pull the legislation will now open the door to more discussions on what should happen next.
His decision is getting praise from state lawmakers.
"I think it's important we have the discussion, that's what we did, we got people's juices flowing."
That discussion? Tax reform.
"I think we all realize taxes are too high in this state, property taxes are too high, income taxes are too high, occupation taxes are too high," said Heineman.
The governor had proposed to either eliminate or cut income taxes in exchange for expanded sales taxes, a move some say threatened the state's manufacturing industry and agriculture.
"Agriculture produced 98-percent of the state's exports so we have to be very careful when we're looking at these industries," said Senator Tyson Larson.
It was those industries the governor heard loud and clear.
"They thought we were moving a little too quick and so I acknowledged that," said Heineman.
That's why the governor over the weekend, backed off.
"We need to take a look at our system and how do we develop better tax policies through the future to create more jobs and higher paying job here in Nebraska," Heineman said.
The plan now is to undertake a study of the state's tax system and talking with Nebraskan's on what they'd like to see. It's something lawmakers are pleased to hear.
"With the initial rollout people had gotten so excited and there was so much concern and negativity that any sort of changes were going to be lost, any sort of compromise was going to be lost in the ongoing concern about the initial bill," said Senator Scott Lautenbaugh.
"I think we have to be very careful, we do need comprehensive tax reform, but we have to be very mindful of what that is and make sure that we're not hurting the industries that best enable the state to grow," said Larson.
The governor says the discussion on tax reform will start now with the Revenue Committee beginning a study on the state's tax system.
"I think the legislative study is the best way to move forward on that," Heineman said.
Senator Beau McCoy, who introduced the governor proposals, is expected to make a motion on Wednesday to kill both bills.
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