Jim Smith, the former Papillion state senator and Platte Institute chief strategy officer, was in Norfolk on Thursday morning getting coffee downtown.
Smith, who also is the president of the Blueprint Nebraska economic initiative, was in town for a luncheon Thursday to discuss tax modernization with a group of area chamber of commerce members and community leaders. He said while he was downtown, he took notice of a mixture of people, including many young people.
“This is a city that has a lot of stuff going on,” Smith said. “It’s really leading the way for our state in terms of growth, making things happen and unity.”
The former chairman of the Legislature’s Revenue Committee’s comments came at the luncheon and were in line with his update on modernizing the tax structure. The goal is to make Nebraska more competitive, especially to young people between the ages of 18 to 34.
Blueprint Nebraska has developed a statewide strategic plan to grow the economy by attracting talent and encouraging business investment. That includes its vision for 2030 to “propel Nebraska to be the most welcoming Midwest state for youth, talent, investment and commerce and a national model for continuous growth and prosperity.”
The Blueprint Nebraska plan proposes to reduce state income tax rates, fully eliminating state income taxes on earnings up to $50,000 — or $100,000 for married couples filing jointly — increasing property tax relief by an additional $2 billion over the next decade and eliminating Nebraska’s inheritance tax.
The changes would be paid for by eliminating many sales tax exemptions, income tax deductions and corporate tax credits. The current sales tax rate would remain the same, and the sales tax exemption for unprepared groceries and most medical services would remain in place.
Blueprint Nebraska’s alliance partners are the Platte Institute, Aksarben and the Nebraska Chamber of Commerce.
Among other projections, it is expected to generate more than $2 billion for additional property tax relief over 10 years and provide almost $470 million in new revenues created by economic growth.
Among the questions asked was what type of reaction state senators have had so far.
Smith said the state has various tax proposals to consider, including a consumption tax that would propose to eliminate property, income, sales, inheritance and estate taxes.
“There’s some challenges there because the devil is in the details,” he said.
And with surplus revenues next year, there could be interest in reducing tax rates, Smith said.
With just a 60-day session next year, Smith said, it could be the Blueprint Nebraska initiative gets introduced next year but doesn’t get acted upon until 2023.
“We got a new governor coming in,” Smith said. “I think maybe some of the legislators might want to say, ‘We don’t want to tie the (new governor’s) hands. We don’t want to implement any kind of major tax reform.’ I wish I could tell you that I’m optimistic, but I don’t think a lot will happen in 2022. I think it will happen in 2023, but until then, I think we really need to control the narrative of what we want the state to look like going forward.”
Other reaction at the luncheon included that getting rid of the inheritance tax could be costly for counties and must be replaced if it is eliminated; and that state aid needs to be increased for public schools, especially if property taxes are reduced.