Key points of Gov. Pete Ricketts’ tax plan, Legislative Bill 947:
1. The plan would not reduce the size of property tax bills. Instead, it would provide an income tax credit based on the amount of property taxes paid by agricultural land owners and homeowners. The credit would be refundable, meaning taxpayers would get a check from the state if their new credit exceeded the amount of their income taxes.
2. The new income tax credits would start at 2 percent of property taxes paid by ag land owners. The credits would increase to 20 percent by 2027. The credits would be available to any ag land owner who pays Nebraska income taxes.
3. For homeowners, the new income tax credits would start at 1 percent of property taxes paid, up to a cap of $25. The credits would increase to 20 percent of taxes paid, or a cap of $500, by 2030. The credits would be available for an owner-occupied home.
4. The state’s property tax credit program would remain in place. It provides $224 million of credits that reduce the tax bill paid by all property owners. Personal property tax exemptions also would remain, which reduce the tax bill paid by businesses and agriculture.
5. The top corporate income tax rate would be cut to 6.84 percent, down from 7.81 percent, in five annual steps. Workforce development funds would be boosted by $5 million per year.
6. The new income tax credits would reduce state tax revenues by an estimated $590 million in 2030, when fully implemented. The corporate income tax cut would reduce revenues by an estimated $50 million in the same year.
7. The plan would use about $40 million from the state’s cash reserve fund to offset the revenue losses and fund state government through June 30, 2019. The plan does not spell out how the state would manage the loss of tax revenue in future years.