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Senator Brandt urges pause to final income-tax cuts to shore up state budget; supporters say pause averts service cuts
Summary
Sen. Tom Brandt told the Revenue Committee LB171 would hold next scheduled income-tax reductions at 4.99% rather than allowing a drop to 3.99%, preserving revenue to cover a projected budget shortfall and to fund property-tax relief. Supporters described the pause as pragmatic; chambers and business groups opposed reversing planned rate declines,
Sen. Tom Brandt proposed a pause to the scheduled reductions in Nebraska income-tax rates with LB171, saying the change would stabilize state finances while preserving the possibility of future cuts when revenues allow.
In his opening, Brandt said LB171 is "not a tax increase" but a pause — keeping the top corporate and personal income-tax rate at 4.99% rather than allowing it to fall to 3.99% as scheduled under previously enacted legislation. He said a pause would produce needed revenue to address the state's budget shortfall and to keep commitments to property-tax relief programs.
Support for a measured pause
OpenSky Policy Institute's director, Rebecca Firestone, testified in favor, saying the state's structural budget gaps and the planned allocation of billions in state funds for property-tax relief make it prudent to protect revenue in the near term. Farm and local leaders testifying in support said the approach would provide fiscal space to hold other commitments.
Opposition and concerns
Business groups objected. Brian Sloan of the Nebraska Chamber of Commerce said the 2023 tax reforms were transformational and that pausing or rescinding planned rate reductions would reduce Nebraska's competitiveness for jobs and investment. The Nebraska Chamber argued continued reforms are essential for business growth; NFIB also opposed the bill.
Committee questions and alternatives
Committee members asked about decoupling corporate and personal rates (so one stays and the other continues its scheduled reduction), triggers for resuming cuts, and whether any pause should be tied to budget reserves or objective fiscal triggers. Brandt said he would be open to trigger mechanisms that restore reductions when revenues and reserves reach sustainable levels, and to discussing targeted designs, such as holding the corporate rate while allowing further individual-rate declines.
No vote was taken during the hearing. Several members said they would want additional fiscal modeling of decoupled alternatives and trigger designs before deciding whether to move the bill.
Ending
LB171 frames the pause as a short-term fiscal safeguard to protect the state's spending commitments while leaving open future rate reductions if revenues improve. Business groups cautioned the committee that pausing scheduled reductions could harm competitiveness and economic growth, and asked for more analysis before any change.
