LINCOLN–(KFOR/Nebraska Examiner Apr. 10)–There could be a slimmer version of LB 388, which would look to reduce property taxes for Nebraskans.

The Nebraska Examiner reports that a 63-page amendment to the bill was filed late Tuesday night, which would reduce the plan and gets rid of the one-cent increase in sales taxes.  It falls short of Governor Jim Pillen’s original goal of reducing property taxes by 40%.

The Examiner also reports the new amendment comes after a couple of weeks of negotiations with groups involved in tax policy, including state business groups, which had opposed one idea that had been floated — pausing or more slowly phasing in income tax cuts adopted last year.

The new plan would focus on “front loading” existing income tax credits offered to Nebraskans, which officials said went unclaimed by more than 60% of taxpayers in some areas.

The amendment to Legislative Bill 388 would also:

  • Hike taxes by 36 cents, to $1, on a pack of cigarettes.
  • Impose a 100% tax on edible hemp products.
  • Impose a 20% tax on vaping products and skill games common in convenience stores.
  • Eliminate sales tax exemptions on products including soda pop, candy, internet advertising and veterinary services for pets.

The bill also would impose a 3% cap on revenue growth by local governments, with exceptions if a city or county needs to increase salaries to address a shortage in law enforcement or first responders.

The tax changes would generate about $200 million a year in extra revenue, which would fall short of the hoped for $1 billion in new revenue that, when combined with past bills, would allow a 40% reduction in local property taxes for K-12 schools.

With time running out in the 60-day legislative session, there could be a special session called for this summer to try and get the bill passed.  Second round debate on LB 388 is set for Wednesday.

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