A revised version of the comprehensive property and income tax reduction bill supported by Gov. Pete Ricketts was placed before the Legislature's Revenue Committee on Tuesday.
The amended proposal would also beef up workforce development provisions, incorporating some of the programming proposed by Sen. Burke Harr of Omaha in his own pending tax reform package.
Sen. Jim Smith of Papillion, chairman of the committee and sponsor of the tax package (LB947) supported by the governor, pegged the cost of the revised proposal at about $40 million in 2018 and the cost of proposed workforce development programs at an additional $20 million.
Smith said first-year costs would need to be funded from the state's cash reserve fund.
The revised proposal would "give everyone something they want," he said, while "recognizing they will not get everything they want."
"I think it's the right thing to do," Smith said.
To do nothing about growing tax concerns risks greater conflict between the agricultural and nonagricultural sectors of the state, Smith said, while also failing to address Nebraska's economic development challenges.
"I look at this as a jobs bill," he said.
Smith said he anticipates future costs of the gradual increase in tax relief would be "paid out of revenue growth and controlling (state) spending."
Revisions to the bill presented during an executive session of the committee would retain the state's current property tax relief credit program while adding a program of refundable state income tax credits that would begin at 2 percent of property taxes paid on ag land and 1 percent of property taxes paid by homeowners.
The refundable credit on property taxes paid on ag land would gradually rise to 20 percent. By retaining the state's property tax relief fund, total relief for ag land property would reach about 30 percent over a decade.
Gradual increases in homeowner reductions would reach 20 percent and be capped at $500.
The corporate income tax rate would be reduced from 7.81 percent to 6.84 percent over two years.
Smith estimated total tax relief for Nebraskans would reach $600 million to $700 million by 2030.
The tax bill introduced by Smith and supported by the governor appears to be the only comprehensive package that might be able to garner enough votes to be advanced to the floor of the Legislature for action this year.
As senators consider tax changes focused largely on property taxes, a statewide petition drive is underway to gather signatures to place an initiative on the November ballot that would reduce property taxes by an estimated $1.1 billion.
Under that proposal, property tax relief would be distributed through a state income tax refund or credit equal to 50 percent of local school property taxes paid by Nebraska taxpayers.
The Revenue Committee is expected to meet again Wednesday to consider revisions to Smith's bill.