Apr 20, 8:06 PM EDT

Nebraska Gov. Ricketts turns to public to pitch tax plan



LINCOLN, Neb. (AP) -- Nebraska Gov. Pete Ricketts turned to the public Thursday to build support for his income and property tax plan in the face of opposition from some lawmakers and the state's leading farm groups.

Ricketts made his case for the package outside the Capitol's legislative chambers, flanked by business leaders and 19 state senators.

"We have the choice of being on the side of big government spenders or the taxpayers," Ricketts said. Senators who have backed the plan "are saying, 'I'm on the side of the taxpayer.'"

Last week, the Republican governor held a telephone town hall event near the end of a statewide tour that has touched 35 cities since the plan was unveiled in January. Lawmakers are scheduled to debate the bill Friday.

The plan would lower Nebraska's top personal and corporate income tax brackets, adjust the way agricultural land is valued for tax purposes, cap statewide property tax growth and expand the earned income tax credit for low-income residents. Income tax cuts would go into effect when state revenue grows beyond a preset amount.

Business groups including the Nebraska Chamber of Commerce and Industry support the measure, but major farm groups say it doesn't do nearly enough to help farm and ranch land owners whose property tax bills have soared - a major complaint for producers in the state's largest industry.

"The governor sent the wrong fire truck to the wrong fire," said John Hansen, president of the Nebraska Farmers Union. "It simply addresses the wrong problem."

Hansen said the bill would make it harder in the future to lower property taxes while maintaining a commitment to state aid for K-12 public schools.

Sen. Jim Smith of Papillion, the Revenue Committee's chairman and a leading sponsor, said the income tax portion would serve as a "jobs bill" that encourages small businesses to invest more into their operations. Another leading sponsor, Sen. Lydia Brasch of Bancroft, said the property tax piece of the bill would provide some relief to farmers and ranchers.

"Passing tax relief in Nebraska is now a matter of will, not a matter of way," said Nicole Fox, a former state senator and lobbyist for the Platte Institute, which supports the plan.

Some advocacy groups noted that it would favor wealthy taxpayers. It also could lead to a net tax increase in small towns if school districts raised their levies to compensate for lost property tax revenue, according to the OpenSky Policy Institute, a Nebraska think tank that opposes the plan.

The plan would shift a property tax burden from agricultural land to other property, such as homes, commercial or farm buildings and farm equipment, said Jay Rempe, a senior economist for the Nebraska Farm Bureau.

"Everybody else is paying more to make up that difference," Rempe said. "It's difficult to say exactly what kind of property tax relief would result from this package."

Kevin Peterson, the vice president of the Nebraska pork producers association, said he sees the effect of high property taxes on the Polk County farm where he, his father and his brother grow row crops and raise pigs.

"We're spending over $1,500 a week on property taxes on our farm," he said. "If that's not a significant expense, I don't know what is."

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