LINCOLN — The Nebraska Legislature opens its 2013 session on Wednesday, and already there’s some potential political fights that bear watching.
Gov. Dave Heineman is mounting up another charge to reduce state taxes and eliminate the inheritance tax that is collected by counties.
Among the ideas tossed out last month would put the tax-cut-loving governor in another battle with the state’s powerful agricultural interests, as well as the state’s hospitals.
First, it should be said that Heineman’s tax-cut plans are fluid and could change dramatically when he finally announces them in the annual State of the State address on Jan. 15.
But, if he sticks to some recent ideas, he’ll be picking a fight with the aggies over taxes — a fight he took on a couple of years back and lost.
That’s when the governor proposed to utilize monies paid by farmers as “check off” fees on sales of corn, sorghum and other commodities to help solve the state’s budget crisis during a special session in 2009.
Farm groups rose in indignation. The political pitchforks came out. And the governor backed off.
Now, there’s talk of Heineman wanting farmers to pay more taxes on equipment purchases and veterinary bills, and maybe give up other sales tax exemptions.
The conspiracy theorists wonder if it’s a way to get back at the Nebraska Cattlemen and Nebraska Farm Bureau, which recently came out against the governor’s plan to eliminate inheritance taxes. In rural counties, getting rid of inheritance taxes would probably mean increases in the most hated taxes in farm and ranch country — property taxes.
Maybe so. But no one doubts the governor’s resolve in improving the state’s business tax climate. Eliminating a “death tax” would certainly help the state’s ranking, which is now 31st out of 50. That’s the kind of ranking that would get a Nebraska football coach fired.
Heineman has also floated a tax on hospital beds and eliminating tax breaks hospitals now get on purchases of equipment and medicine.
There’s no question that agriculture and health care are two industries that have done pretty well in recent years, so that could be a reason they are targets of tax shifts. But, interestingly, hospitals have been on the opposite side of a couple of issues from the governor, prenatal care for children of illegal immigrants and Medicaid expansion.
It inspires chatter around the State Capitol, which is never in short supply, particularly right before the session starts.
Bottom line — this is going to be one interesting session. It begins on Jan. 9.
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The governor made an interesting point in a talk Wednesday morning to a group of the state’s water interests. When asked what stable funding mechanism is out there to finance water projects and compliance with water compacts and lawsuits, Heineman made it very clear that he had a solution — utilizing check-off fees.
But, he pointed out, the ag groups didn’t like that idea. So the state remains in a pickle.
Water — that stuff we drink and what bailed us out of the drought last year — could become one of the top issues of the session if a special master rules on Kansas’ lawsuit over Nebraska’s non-compliance with a compact on flows in the Republican River this spring, particularly if Nebraska will be required to pay a huge fine.