Statewide half-cent sales tax increase ‘is on the table’
The Legislature’s Revenue Committee on Monday eyed a half-cent hike in Nebraska’s sales tax rate as it launched an effort to reach agreement on a plan to raise sufficient funding to reduce property taxes.
“A one half-cent sales tax increase is on the table,” Revenue Chairwoman Lou Ann Linehan of Elkhorn said following a wide-ranging committee conversation about issues attached to proposed tax reform.
The committee began to fashion its tax reform plan at an evening meeting in the Capitol cafeteria at tables pulled up in front of candy and snack machines.
No votes were taken and no bills were amended, but committee members generally agreed that they would raise additional revenue only for the purpose of property tax relief, not to increase state spending beyond the 3 percent boost contained in Gov. Pete Ricketts’ budget recommendations.
“We are going to look at all possibilities,” Linehan said following the surprisingly united discussion.
“We want to make sure we are fair to everybody,” she said.
Although no votes were taken and no amendments adopted to a bundle of competing tax reform bills that are sitting in the committee following a series of public hearings, Linehan said her impression following the sitdown discussion was that “we’re mostly in agreement.”
Nebraska’s state sales tax rate currently is 5.5 percent.
Among revenue options also on the table for consideration were sales taxes on soda pop and candy, along with some discussion about an increase in the state cigarette tax.
“We will look at different options,” Linehan said.
The committee, which is composed of four urban senators and four rural senators, agreed to meet again in executive session March 14 to continue its negotiations.
“Property taxes are too high,” Linehan said, and they are endangering “the largest industry in our state,” Nebraska agriculture.