State Sen. Ray Janssen of Nickerson knows about making law and about making sausage. He’s a grocery store owner and butcher who also is chairman of the Legislature’s Revenue Committee.

It’s true, he told senators Wednesday as they worked on the state tax-cut package: It’s not very pleasant to watch sausage being made.

“But the finished product isn’t too bad,” he added.

And there have been a lot of cooks stirring this tax-cut pot, he said, as senators changed some of the ingredients in the major tax-cut package during the second stage of debate Wednesday.

The amendment outlining the new tax-cut package was made a part of the bill on a 37-7 vote. However, senators adjourned for the day before giving second-round approval to the reconstituted bill.

Senators continued to tinker with the ingredients Wednesday afternoon and are expected to finish the second-round debate today.

The bill, as currently drafted, would provide the most relief through income and property tax cuts. Specifically, it provides for the following cuts:

n Ends the income tax marriage penalty, providing a tax cut of about $65 million a year.

n Ends the estate tax. Under current law, the first $1 million of an estate is exempted from the tax. The earlier tax cut plan would have exempted the first $2 million. Termination of the estate tax would provide a tax cut of about $25 million a year on an average of 150 estates that top $2 million.

n Provides a property tax credit worth about 8 cents for every $100 in valuation for every property owner. The latest version does not increase state aid to schools and does not reduce the school district levy lid from $1.05 per $100 valuation to $1, as did the earlier version. The plan provides a tax cut of about $115 million per year.

n Increases the state’s earned income tax credit to 10 percent of the federal credit and provides about $3.8 million in tax cuts to low-income working Nebraskans.

n Repeals the sales tax on construction labor and provides about $9 million in tax cuts a year.

n Offers an income tax credit for production of renewable energy and provides about $100,000 in tax credits.

The new ingredients didn’t please everyone. In fact, two senators became a bit testy during debate over the best way to provide property tax relief.

The tax package originally provided additional state aid to schools in two years, and at the same time it reduced the school levy lid by 5 cents per $100 valuation.

According to Lincoln Sen. Ron Raikes, providing additional state aid to schools is the best plan for providing fair, long-term property tax relief. State aid, he said, by providing more money for poorer schools, is an effort to equalize education opportunities statewide.

But Sen. Mike Flood of Norfolk disagreed. The state aid formula is unfair to some schools that don’t get as much money from the state, he said. In fact, he added, superintendents in his area don’t trust the state to maintain its state aid commitment over the long haul.

 “Fix the formula, and I might be willing to support something that throws $60 million at it,” Flood said.

“Sen. Flood has got a couple of schools that spend money like a drunken sailor. And they can do it because they are rich districts,” Raikes said in response to Flood’s criticism of the state aid formula.

“The formula is not broken,” said Raikes, explaining that the state provides funding up to a certain level, and schools that want to spend more don’t get extra state aid.

“We are not drunken sailors,” Flood said. “We still have a hangover from your little Class I school bill that you passed two years ago,” he said, referring to Raikes’ plan that mandated merger of the Class I elementary school districts into larger districts.

“We may look rich to you on paper, but let me tell you, corn’s only up a buck a bushel. We may have land values that look like something special to the tax assessor, but we are not selling land in western Madison County,” Flood said.

“We are cash poor and land rich,” he said.

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.