Lawmakers open to Heineman's proposals but not sold - KTIV News 4 Sioux City IA: News, Weather and Sports

Lawmakers open to Heineman's proposals but not sold

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LINCOLN, Neb. (KTIV) -

Education and a major tax overhaul are the cornerstones of Nebraska Governor Dave Heineman's plan for his state.

During his state of the state address Tuesday, Heineman proposed a plan to make college more affordable and create a more business-friendly climate in the Cornhusker state.

Nebraska's high school graduation rate ranks 4th in the country.  Now, Governor Dave Heineman wants to ensure those students can afford to go on to college.

"We're on that right path, and that path starts with a quality education," Heineman told the Unicameral.

Education is again a top priority of the Governor and will be of the legislature.  It makes up 40% of the state's budget.  In addition to increased state aid to K-12 education, Governor Heineman proposes a two-year tuition freeze on the state's universities and community colleges.

This is very good news for Nebraska families who are working very hard to ensure that their sons and daughters can afford to go to college," said Heineman.

Senator Tyson Larson of O'Neill says the plan needs to be studied further.

"We can't put our state budget in a perilous nature just to freeze tuition up.  College is obviously an investment and students have to sometimes take strides to make sure that they're investing in their future," said Larson.

The governor says it's also important to create more job opportunities for those students when they graduate.  He's asking the state legislature to overhaul the tax system to grow the economy.  Something he says hasn't been done since a postage stamp cost five cents.

"Taxes are too high in Nebraska.  High taxes impede economic growth.  High taxes aren't attractive for entrepreneurial growth and high paying jobs," Heineman said.

Heineman's proposals include elimination of the corporate and personal income tax.  With the economy's future still uncertain these drastic changes are sure to face opposition in the Unicameral, something the Governor acknowledged in his speech.

"This tax debate will be challenging but it's necessary," Heineman said.

"Is this the right time?  We do need to look at what will benefit the tax payers the most," Sen. Lydia Brasch of Bancroft said it's a balancing act.

"Are we just shifting where we collect taxes or are we actually trying to spend less? I don't see a reason to redevelop a whole system if we're really going to be doing the same thing," freshman senator Jim Scheer of Norfolk said.

Senator Dave Bloomfield of Hoskins believes less taxes will lead to growth.

"I don't see any reason to believe that taking more money from people makes our economy necessarily stronger.  I would love to see us be able to do away with the state income tax," Bloomfield explained.

"The problem is the minute you try to address one side of it, you affect another side of it.  It's a very difficult thing to address," Sen. Paul Schumacher of Columbus said of tackling taxes.

Heineman says the state will make up for the loss in tax revenue.  He says the state will be able to afford his tax plan by eliminating half of the current sales tax exemptions.  He'll offer more specifics later this week.

Nebraska's top personal income tax rate is 35th highest in the country.  By comparison, Iowa ranks 42nd and South Dakota 2nd.

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