Tax reform debate begins on Gov. Heineman’s plan

Tax reform debate begins on Gov. Heineman’s plan

By Paul Hammel January 22, 2013 10:09 am Comments

After a bit of a delay, Gov. Dave Heineman’s bold tax reform plan was introduced on Tuesday morning.

 But already some senators are questioning whether it’s too big of an issue for one legislative session.

He’s as serious as a judge about shifting the tax load and making Nebraska more attractive to business, but it’s an ambitious plan to be worked out amid the hubbub of the 90-day legislative session.

It’s a big, big gulp — a $2.4 billion tax swap from income to sales taxes. And only now are the business and farm groups most affected by this complicated plan beginning to assess what it will do to their tax bills.

The governor, in comments Monday to The World-Herald, said he’s convinced there’s enough time to do it in 2013.

In an address to the Lincoln Independent Business Association, an influential small-business organization in the Capital City, he stressed again and again that he’s flexible about his plan and wants as much input as possible from citizens of Nebraska. The former Army Ranger also announced a campaign to speak with as many organizations as possible in the next few weeks to gain that input.

He said he’ll meet with any group that can muster two or more people for a meeting.

But the tried and true way to get big ideas passed in the Legislature is to take more than a few weeks to hash out the details.

Former State Sen. Deb Fischer of Valentine (now a U.S. senator) followed that path in crafting the state law that devotes 1/4-cent of the state’s sales tax to new highway construction. She held hearings across the state, conducted a well-attended symposium on the problems of road funding, and then brought an army of supporters to Lincoln to push her proposal to victory. It took a couple of years.

I’ve never seen a legislative hearing like the one held on her proposal, Legislative Bill 84 — supporters were lined up like soldiers. It was a steamroller on the move. Someone called Fischer “the general” for her organizational skills.

Gov. Heineman enters his fight over tax reform with uncertain support. The farm groups, which would get hit hardest under this preliminary plan, are ticked off. The business groups say nice things, but they’re concerned about how such a tax shift will hit their members and scrambling to hire accountants to figure that out. Advocates for social services say it will shift taxes from the rich to the poor.

Those studies could take a month or so. By then, will there be enough time to pass such an ambitious bill?

 On Tuesday, Lincoln Sen. Colby Coash said what a lot of his colleagues are thinking: that such a major tax shift will take two years to digest.

 Omaha Sen. Beau McCoy, one of the co-sponsors of the governors bills, said Tuesday that it’s a little early to predict how long this tax debate might take. The bills just got intorduced, he said, adding that the Legislature has a history of getting things done promptly, if necessary.

The governor is counting on a groundswell of support from the public to push his tax reform ideas over the finish line. That may happen. I mean, who doesn’t want to skip paying state income taxes?

But he’s taking an unconventional approach to such a big change. One wonders if it will work or whether we’ll still be talking about tax reform next year.


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