Sen. Steve Erdman's effort to call for a vote of the people on a proposed constitutional amendment to repeal the state income tax, the state sales tax and local property taxes while creating a new consumption tax to support state and local government failed to clear its first floor hurdle in the Legislature on Tuesday and disappeared from the agenda.
The bill (LR264CA), which also would eliminate the inheritance tax, was trapped on a 19-14 vote that left it six votes short of the 25 required to move on to second-stage floor consideration.
Erdman, who hails from Bayard in western Nebraska, argued that "Band-Aids will not fix the problem" of high taxes in the state, which he said are leading to people leaving Nebraska and exacerbating an ongoing workforce shortage.
"Our economy will explode" if that exodus continues and jobs remain unfilled, he said.
Most of the evening debate was confined to senators who endorsed the proposal and unfolded in front of supporters of the bill who filled the gallery in the legislative chamber's north balcony.
The consumption tax would apply only to purchases of new goods and led to some concerns about reduced revenue to support government functions and activities. Â
Sen. Tom Brandt of Plymouth questioned whether the change would "place local control at risk."
Sen. Mark Kolterman of Seward warned that the proposal was full of "a lot of unknowns."
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At one point, Erdman said he hears people who are "more worried about those who collect and spend the taxes than the taxpayer."
"Change scares us," said Sen. Tom Brewer of Gordon, a supporter of the proposal, "but we can't continue and survive this (current tax challenge), especially in the agricultural sector."
Tuesday's vote represented a reduction in support for the dramatic change in tax policy; a similar bill received 23 votes for advancement in 2021.
If this year's proposal would have been approved, the final decision would have been left to voters in the 2022 general election, with legislative implementation following in 2023 and only the new consumption tax, along with excise taxes, in effect beginning Jan. 1, 2024.
When 40 representatives of special interests show up to oppose the bill at its public hearing, Brewer said, "we are on the right track."
"Anger about property taxes is what drives this proposal," Sen. Tom Briese of Albion said.