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Heineman pushes for tax cuts and breaks

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BY JoANNE YOUNG / Lincoln Journal Star

Tuesday, Jan 15, 2008 - 07:26:42 pm CST

In four words: taxes are too high.

It’s become a gubernatorial mantra, oft repeated in a state that ranks high among its peers in the amount of money residents pay to live here.

Taxes in Nebraska are too high, Nebraska Gov. Dave Heineman said to the Legislature in his State of the State address Tuesday morning. And if it was up to him, more relief would be on the way, in the form of $75 million in property tax relief, increasing the amount for each property owner from the current $83 to $151 per $100,000 of assessed value.

Story Photo
Gov. Dave Heineman and first lady Sally Ganem are escorted to the legislative chamber in the State Capitol on Tuesday for the annual State of the State address. (Eric Gregory)

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State of the State address

Key points of the State of the State address by Gov. Dave Heineman. (Anthony Roberts / JournalStar.com)...

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Governor’s budget highlights
  • Invest an additional $75 million in property tax relief, increasing the amount for each property owner to $151 per $100,000 of assessed value.
  • Supersize the state’s existing tax incentive program to give bigger tax breaks to companies that create at least 75 new jobs that pay 150 percent of the state average wage or double the average wage of the county they are in.
  • Give the University of Nebraska and state colleges a $10 million down payment on a student information system. The combined systems would cost $22 million.
  • Transfer $15 million from the state general fund to the Department of Roads for road construction.

    n Maintain a strong cash reserve.
  • Adjust Attorney General Jon Bruning’s budget by $1.2 million to pay for outside legal assistance for the school funding lawsuit.

Last year, the Legislature lowered taxes, giving property tax relief, repealing the death tax, eliminating the marriage penalty, expanding the earned income tax credit and repealing the sales tax on construction labor.

But taxes are still too high for small business owners, farmers, teachers and nurses, Heineman said.

While handing out tax relief, he would also maintain a strong cash reserve.

“A fiscally responsible budget requires a prudent cash reserve for when we have a downturn in the economy,” he said.

Sen. Lavon Heidemann, chairman of the Legislature’s Appropriation Committee, said he appreciates the governor’s talk about keeping a healthy cash reserve. He would like to see money there now stay there — over $500 million.

But the committee will take a long hard look at transferring $75 million out of the bolstered cash reserve to property tax relief, he said.

This is the first step in a three-month budget process. The committee takes the governor’s recommendations on adjustments for its two-year, $7 billion budget, but makes its own decisions on what to take to the full Legislature for its approval. The budget for 2008-09 is $3.5 billion.

In his State of the State address, Heineman touched on job incentives, education, immigration and the health of Nebraskans.

He said he continues to work on incentives for jobs, expansion of industry and trade with countries like Taiwan, Cuba, China and Mexico. He wants the Legislature to make creation of higher paying jobs a priority with the Nebraska Super Advantage program to bring in new and higher paying jobs for the state’s young people.

He also wants to tackle the cost of education and making the school aid formula more predictable and sustainable. Recently the state found out an additional $53 million would be needed to pay for K-12 schools, compared to the estimate at the end of the 2007 session.

Since he’s been governor, he said, he has recommended funding the school aid formula in full. But the formula needs to become more understandable, stable and affordable.

The Legislature’s Education Committee chair, Lincoln Sen. Ron Raikes, has played a huge role in crafting the current formula. A bill this session will deal with aspects of the formula, particularly in how it deals with calculating the needs of schools, he said.

But there’s no sense in scrapping the whole formula, he said.

On immigration, Heineman said illegal immigration should not be rewarded. The federal government’s failure to effectively address illegal immigration means the states, including Nebraska, must address specific challenges in their own ways.

Heineman also wants the state to tackle the problems of high health costs — beginning with the state’s youngest citizens. He’d like to reverse childhood obesity to reduce risks of diabetes, high blood pressure and heart disease.

“This issue doesn’t require a new law,” he said. “It’s about eating properly and exercising regularly.”

Reach JoAnne Young at 473-7228 or jyoung@journalstar.com.


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Dano wrote on January 15, 2008 11:16 am:
" The tax breaks are incentive, but what is going to come here that creates jobs with those kinds of salaries. Most of the manufacturing, skilled or not, are limited in salaries and many professional trades aren't interested. Call center and service industries aren't paying that, it is not cost effective. I am all for expansion, but i just don;t see the break doing much to incent when it seems to be out of reach. I hope I am wrong and time will tell. I do appluad the effort though. At least someone realizes the economy is struggling and we have some savings. Just hope it is enough to see us through the hard times. "
Jhano wrote on January 15, 2008 11:57 am:
" The governor understands what property owners are irrate about and how this tax is more harmful than impact fees; the Lincoln city council and school district really need to step up ways to reduce dependence on property taxes. Property taxes take up a greater accumulated effect on the middle and lower classes than income taxes. That deprives the majority of having and spending disposable income ultimately and impeding economic expansion. Chalk one up for Dave! "
Market driven? wrote on January 15, 2008 12:09 pm:
" Such a pretty picture, NOT! Remember demographics of Nebraska an aging population and fixed incomes that will be below or near poverty for the retired. Kind of scary that further income disparity is suggested. With health care costs still not contained, is this ultimately inflationary if only the high paid workers have discretionary income? Would incomes be market driven or with business socialism/subsidies? "
airedale wrote on January 15, 2008 12:51 pm:
" Essentially what this article says is that businesses will be getting tax breaks. I don't see anything here that indicates that the voters will be getting any significant tax breaks.In essence what is being done here is cutting spending for state agencies which will reduce services for Nebraskans while at the same time Nebraskans will not see any kind of a real decline in the taxes that they have to pay. We will get less for our money than ever before even though the State is apparently flush with our tax dollars. "
Let Down wrote on January 15, 2008 12:51 pm:
" Is the governor engaging in a fuzzy numbers game if he increases income subsidies to one population but ignores another? Who could use that added $7000+, the person who retired on retirement savings that didn’t anticipate an economy that would collapse due to subprime scandel and wars or a new hire who has not invested in the state/community with years of paying taxes? This is an artificial way to increase wage data, it will not help those who may need the disposable income to enjoy retirement. "
Confused wrote on January 15, 2008 1:13 pm:
" increasing the amount for each property owner from the current $83 to $151 per $100,000 of assessed value is relief ?? I'm confused !! "
E Jr wrote on January 15, 2008 1:15 pm:
" With the conditions of our roads, the cuts in Medicaid, the cuts in aid to the U. of Nebraska and many others, how can we say taxes are too high? If they are too high, please reinstate all the budget cuts which have been in the last several years. Cutting taxes just doesn't make any sense! "
More Ted Turner Tax Cuts wrote on January 15, 2008 1:47 pm:
" So the governor wants to increase the amount of money going from our budget surplus to out-of-state landowners and corporations, like Ted Turner? Come on! "
YEAH! wrote on January 15, 2008 1:48 pm:
" $100 a year break for me an $700 billion a year for businesses!
Way to go, gov! "
The wrote on January 15, 2008 2:03 pm:
" state gives tax cuts and the city adds them back into the county tax. "
Taxpayer wrote on January 15, 2008 2:03 pm:
" No more tax break incentive plans. Everyone needs to pay his share of taxes. All of these exemptions put a higher tax burden on the taxpayers who are paying taxes. 1. For some major property tax relief, Make teachers state employees and pay them from sales and income taxes. This would greatly reduce the property tax needs for each school district. 2. Reduce the size of state government. We have more government than we can afford. The number one place to cut jobs and benefits would be health and human services. 3. Charge sales tax on food. 4. Continue our present gas tax system. Sales tax on food and gas tax are both taxes that are not only paid by Nebraskans but by everyone who travels through the state. Make some money off the I80 traffic. "
Cal wrote on January 15, 2008 2:31 pm:
" Lot of empty "I wants" and "I'd likes" that mean little
or nothing. This is the usual out of the State of Nebraska. Yeah the marriage penalty is good, but being
single, you sure as heck don't have 2 salaries to pay all
the utilities and living expenses. The governor of my
former state gets out and fights and the legislature is
working on doing away with home property tax. Trade with
foreign countries is good but whether its young people
or the older people, their jobs at $12.00 an hour does
little or nothing, the over assessed property taxes are
still there to pay as well as double the living expenses
compared to my former state. Its get business & industry
in and taxes down or its Nebraska business as usual for
those left to support it. "
Improper Resolve wrote on January 15, 2008 2:59 pm:
" “It’s about eating properly and exercising regularly.” may invoke thoughts of caring for cattle rather than embracing liberty of individuals. Public education is a valid tool to help appreciate the value in food and exercise. This is more hostile than even the motorcycle helmet debate...and more a threat or infringement of liberty...a struggle we took aim against Saddam to prevent rule that might dictate free will into submissive behavior. "
Request Fed Assistance wrote on January 15, 2008 3:13 pm:
" Until there is success in combating illegal residents the governor could be requesting emergency federal funds to help Nebraska deal with excessive costs associated with illegal immigrants in schools and emergency rooms. "
WAGE DISPARITY UNFAIR? wrote on January 15, 2008 4:08 pm:
"
Higher wages, especially when in multiples above international competition, will not yield success in global markets. And, until highly skilled immigrants can easily compete for new jobs...the bill could be irrelevant. E_Jr might find UNL faculty members “falling behind” if subsidies support higher paying jobs in the private sector while increasing pressure to sustain status quo salaries at universities...the “at infinity” inflation is neither sensible or realistic. Markets should drive ability to compensate employees, not political manipulators who would ignore fairness across income levels.. "
Gee Dave... wrote on January 15, 2008 5:52 pm:
" Why don't we cut the excess gasoline tax? It's not being used to fix our roads. That would save all of us a bunch of money. "
whatever wrote on January 15, 2008 6:53 pm:
" This state has been talking about the "Brain Drain" for at least 30 years and really haven't attempted anything substantive. It was a major topic while I was in college and if anything the problem is worse. I'd say out my graduating class about 50 percent came from farms. I'd say out of those 90 percent left the state and perhaps less than 2 percent are farmers. In college I would guess 80 percent were from Nebraska and nearly all have left the state. Nebraska was lucky for a long time as generally Nebraska families were larger than the norm and could "replace" themselves for awhile the tremendous losses. In the last 10 years the demographics have really tipped where we must attract people to this state and I'm not talking retirees, we can't afford retirees. We need young and vibrant people who want to start and raise large families. In addition these families MUST be educated. It's particularly bad for many rural areas where the only educated people are teachers and healthcare professionals. As the old die off and the young move away there is no need for teachers and healthcare professionals in many areas of the state. With no schools and no healthcare facilities the young will not come to these communities under any circumstances. In the mean time the populated areas of the state are forced to maintain infrastructure for those few remaining citizens. The tipping point past any hope of recovery has passed for many areas of the state already and is closely approaching for other areas, it's sad but that's the reality. I can name a dozen counties that will essentially not exist in a generation off the top of my head. I would say given the dynamics of what it takes to be a vibrant city, Lincoln is a city that really needs to concern itself with this issue as the "kids from the country" that drove a lot of it's growth the last 20 years are rapidly passing into memory. "
Matt wrote on January 15, 2008 9:12 pm:
" Hmmm...now I have to decide where to spend my extra $20 a month!! Gosh...I don't want to spend it in one place or anything! This is just silly. The state should keep the money and use the $75 million on something substantial. "
microvision wrote on January 19, 2008 5:55 pm:
" The Governor can't see beyond the end of his nose. I'm looking for a new Governor...would Osborne be willing to run again? Anyone whose brain is more powerful than his ego would be great. Anybody, please step up for 2010's election. You'll have my attention. "

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