I’ve got nothing on the presidential election except that I will continue to support this country always and the president such as he deserves it.
Instead I’m writing today about tax reform in Nebraska. I do not believe the efforts at tax relief we will see proposed in the upcoming legislative session are in-line with what rural Nebraskans are demanding.
Specifically, rural landowners are in dire need of property tax relief, while Gov. Pete Ricketts has an eye to cut income tax rates as well as property tax reform.
Obviously if you asked most people if they want to pay less in income tax, they will say yes. I would say yes. Nobody wants to pay taxes. But income taxes are not what threaten to sink agricultural producers.
Earlier this year, the governor used his speech at the state Republican convention to call for more of what he called “platform Republicans,” as well as to call out by name Republican senators who voted against the party platform in recent legislative sessions.
Give Ricketts credit for at least one thing: he is a man who puts his considerable money where his mouth is (see the $400,000 he and his family spent to reinstate the death penalty, for example). To facilitate his quest for lower personal and corporate income tax rates, he’s trying to finance a Unicameral in his own image.
According to figures cited by the Omaha World-Herald, in 2015 and 2016 Ricketts personally donated to 14 state senate candidates, one of whom (Joni Craighead) wasn’t up for re-election this year. (Note: I’ll include the list at the bottom of this piece.)
Ricketts’ donations totaled $75,000, $35,000 of which went to three candidates. So, how did he do? Not great from a strictly numerical standpoint: seven of the 13 Ricketts-backed candidates running this year lost.
Still, five of the nine candidates to whom the governor donated $5,000 or more were victorious, including two of the three to whom he donated $10,000 or more. Ricketts donated $15,000 to Suzanne Geist’s successful District 25 campaign. $15,000!
I suppose you’d have to wait until after the next legislative session to ask Ricketts if his donations were a worthwhile investment. More important to the governor’s income tax plans than any of this year’s candidates, however, is Sen. Jim Smith of Papillion. Smith is seeking the chairmanship of the Revenue Committee in the upcoming session.
Platte Institute for Economic Research CEO Jim Vokal wrote in a Nov. 9 column that Smith plans to introduce a plan for revenue-neutral income and property tax reform. Revenue-neutral means that we’re not talking about a tax reduction so much as a tax shift, moving the burden off high-wage earners and property owners and onto everybody through new sales taxes.
Nebraska’s state sales tax rate of 5.5-percent may not necessarily go up. Rather, taxes might be implemented on services that are currently exempt, of which there are a lot, actually. The Open Sky Policy Institute is a good source of information on what the tax exempt services are, if one is inclined to learn more.
I do not and will never support income tax cuts that almost entirely benefit high-wage earners yet are paid for by increasing sales taxes on everybody else. I’m just not wired that way. I think it’s a repulsive idea.
But I also cannot ignore the distress of property owners who are being financially strangled by the imbalanced way Nebraska funds its public schools.
At a recent town hall meeting with the governor in Lexington, a local landowner said 30-percent of his revenue goes solely to property taxes, yet the school district he lives in, Cozad, receives very little money from the state government.
Is that fair? No. No it is not.
For property taxes to go down, the State of Nebraska must radically increase the amount of aid it sends to school districts. To do that, it has to increase the amount of revenue it takes in.
As I am not a property owner, it is not in my own interest to support a sales tax increase of any kind. But I think the cost of education should fall more equally across all Nebraskans. Everyone has a stake in it.
I also think Gov. Ricketts should find a better use of his time than to push for income tax cuts that mostly benefit people like him.
If sales taxes are to go up, the money should be used entirely to reduce property taxes across the state, and for no other purpose beyond that pursuit. Income tax is not the pressing issue, and rate cuts should not be financed by increasing the financial burden of all Nebraskans through new taxes.
(Note: this piece was amended Sunday morning to reflect that Ricketts has also identified property tax reform as a priority. The piece was also edited to better reinforce the writer's opinion that income tax cuts should not be financed by sales tax increases.)
Gov. Ricketts’ donations to Legislative campaigns
January 2015 to present
Suzanne Geist, District 25 $15,000
John Lowe Sr., District 37 $10,000
Karl Elmshaeuser, District 47 $10,000
Joni Albrecht, District 17 $6,000
Mike Hilgers, District 21 $5,000
*Nicole Fox, District 7 $5,000
Dave Schnoor, District 15 $5,000
Lou Ann Linehan, District 39 $5,000
Ian Swanson, District 31 $5,000
John Murante, District 49 $2,500
**Joni Craighead, District 6 $2,500
Michael Cook, District 45 $2,500
Dick Clark, District 27 $1,000
Tommy Garrett, District 3 $500
*Eliminated in the May primary
**Not up for re-election this year.
Source:Nebraska Accountability and Disclosure Commission