A proposal from the Legislature’s Revenue Committee amended to include as many as 20 bills will be debated beginning Tuesday.

The package, LB 727, proposes special taxing districts, to be known as “Good Life” districts, where sales tax revenue would be diverted from the state’s General Fund to assist in significant development projects. The proposal has been linked to a planned expansion of Nebraska Crossing, the mall at the Interstate 80 Gretna Exit.

Another proposal in the wide-ranging package includes changes in how families can draw from donations to Nebraska Educational Savings Trust accounts. For the first time, tuition to private K-12 schools would qualify. Currently, funds can be withdrawn only for higher education expenses.

Other proposals rolled into LB 727 include:

  • Authorizing the Nebraska Department of Transportation to issue bonds to finance state highway construction.

  • Changing provisions of the Convention Center Facility Financing Assistance Act to provide funding for a proposed Lincoln convention center.

  • Establishing a 14-cent-per-gallon refundable tax credit for sellers of biodiesel.

  • Adding nicotine vaping devices to the definition of tobacco products for purposes of collecting sales tax.

  • Expanding the list of goods and services exempted from the state sales tax to include twine or bailing wire.

Together, the bills amended into LB 727 would reduce revenue available to fund education, workforce development and other important programs by an estimated $50 million in the next two years, an amount that could grow. In the fiscal note on LB 692, the initial bill proposing the Good Life districts, the state Department of Revenue notes an indeterminable impact but says the eventual shift of sales tax revenue from the General Fund “could be significant.”

Revenue losses packed into LB 727, combined with those in separate packages of individual and corporate income tax cuts (LB 754) and property tax breaks (LB 243) under consideration, could create challenges for future Legislatures tasked with passing a balanced budget in an economic downturn.

When less revenue is available, senators are faced with potentially cutting key services that all Nebraskans rely upon or turning to sales tax increases that take a larger percentage of income of low-wage taxpayers.