A legislative amendment to provide direct payments to Nebraskans will be the focus of Friday and Monday briefings sponsored by OpenSky Policy Institute, the Nonprofit Association of the Midlands, the Coalition for a Strong Nebraska and the Nebraska Civic Engagement Table.
The briefings will be held on Friday at 10 a.m. and Monday at 2 p.m. Register for Friday’s briefing here and register for Monday’s briefing here.
The amendment is AM 2414 to LB 939, a tax cut measure that will likely be the focus of second-round debate next week. The amendment would have the state use $400 million to distribute $200 prepaid debit cards to each Nebraska resident. That means a family of four earning the state’s median income of $61,439 would receive $800 from the state. Under the personal income tax cuts proposed in the most current version of LB 939, such a family would receive no tax reduction.
AM 2414 also would lower the rate of Nebraska’s third personal income tax bracket from 5.01% to 4.01%. Institute on Taxation and Economic Policy (ITEP) analysis shows that 55% of this personal income tax cut would go to Nebraskans earning less than $125,000 while Nebraskans with the highest 5% of incomes would receive 12% of the tax cut. This rate cut would reduce revenues by $97 million annually, ITEP data show.
Given the one-time nature of the direct payments and smaller ongoing fiscal impact, the measure presents a more fiscally responsible path to providing relief to Nebraskans than the income tax cuts proposed in LB 939 as well as major tax changes proposed in other amendments that are pending on the bill.