Gov. Ricketts signs historic tax relief bill
LINCOLN, Neb. (Press Release) - Governor Pete Ricketts hosted a bill signing for LB 873 in the State Capitol Rotunda Wednesday. LB 873 delivers record amounts of tax relief to Nebraskans by cutting income taxes and reducing property tax burdens. The Governor was joined at the ceremony by State Senators, agricultural groups, business leaders, senior citizen advocates, and other tax relief supporters.
“Today, we enacted historic tax relief legislation for Nebraska,” said Gov. Ricketts. “LB 873 is the biggest tax relief package in state history. It will provide 12 times more annual tax relief than any tax bill passed in any prior administration. Senior citizens, families, ag producers, and small businesses will see major tax savings in the coming years as a result of LB 873. Thanks to everyone who supported this historic tax relief package.”
Tax relief has been Governor Ricketts’ number one legislative priority since taking office in 2015. In previous years, he worked with the Legislature to deliver over $4 billion of property tax relief. LB 873 will provide an additional $3.4 billion of overall tax relief to Nebraskans through tax year 2027. When fully implemented, LB 873 will deliver nearly $1 billion of annual tax relief above and beyond what Nebraskans currently receive.
Provisions of LB 873
- Protects the refundable income tax credit on property taxes paid to support K-12 public schools. For tax year 2021, this rebate was over 25% of school property taxes.
- Creates a new rebate on property taxes paid to community colleges. The community college tax rebate will be $50 million in tax year 2022, and will increase to $195 million by tax year 2026.
- Accelerates the phaseout of taxes on Social Security income. This income will now be fully exempt from Nebraska income taxation starting in tax year 2025.
- Phases in a reduction of the highest individual income tax rate from 6.84% to 5.84% by the 2027 tax year.
- Phases in a reduction of the business income tax rate from 7.5% to 5.84% by the 2027 tax year.
The Governor credited the State’s spending discipline for making it possible to deliver record amounts of tax relief. Over the past eight years, Gov. Ricketts has worked with the Legislature to control annual average State spending growth to 2.7%. The State’s stewardship of taxpayer dollars has helped Nebraska rank as the least indebted state government in the nation according to Moody’s Investors Services.
Ricketts said, “The Legislature has rightly recognized, that is, they’re going to return that money back to the people of Nebraska. That’s not my money, that’s not the legislature’s money, that’s the people’s money.”
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