The Legislature appears poised to make a smooth pivot from tumultuous debate over tax reform to a more thoughtful, deliberative approach.
Credit Sen. Paul Schumacher of Columbus with the foresight to introduce a legislative bill to establish the Tax Modernization Commission.
Renee Fry of the OpenSky Institute went so far as to call Schumacher’s LB613 the “perfect vehicle” to improve a tax system that she described as outdated, inconsistent and out of balance. Sen. Beau McCoy has designated the legislation as his priority bill. The skids are greased.
Schumacher’s bill will be tweaked to reflect the wishes of other senators. Most notably, Revenue Committee Chairman Galen Hadley said he wants the commission to include all members of the Revenue Committee.
One feature of Schumacher’s approach that the Journal Star Editorial Board finds appealing is that it calls for engaging the public in a variety of ways.
Those include holding hearings throughout the state, and providing online questionnaires and other Internet-based avenues for people to offer suggestions and feedback. In addition, the bill calls for a “tax summit” to which the public would be invited.
The editorial board also favors the suggestion by Hadley that the commission focus on fairness, rather than the goal of reducing taxes. Hadley said the commission should try to find the most equitable way for the average Nebraskan to support his or her government.
The study represents the cresting of a wave that has been building for some time. A decade ago, for example, then-University of Nebraska President L. Dennis Smith suggested a statewide economic summit, noting that it had been decades since the state’s tax structure was overhauled. LB613 refers to previous studies that could be used as part of the commission’s research.
The basic elements of Nebraska’s current tax structure were put in place in 1967 under then-Gov. Norbert Tiemann.
The nature of the state’s economy has evolved considerably since then. Forty-some years ago, most income in the state was derived from agriculture and manufacturing. Today, many Nebraskans earn their living by providing services.
In addition, over the years, various interest groups have succeeded in carving out exemptions to state sales taxes. The process has been haphazard. Exemptions may have been granted without full consideration of the ramifications.
There is no doubt that Gov. Dave Heineman’s nervy proposal to eliminate the state income tax transformed the debate from an academic exercise into an imminent possibility.
The interest groups are mobilized. The citizenry is alert. Let the discussion be vigorous, informed and, in the end, productive.