Tax Freedom Day should arrive earlier

April 25th should be declared a holiday for Nebraskans. It is a day we should gather with our families and friends and celebrate the good life that being an American and Nebraskan has afforded us. April 25th is Tax Freedom Day in Nebraska.

Tax Freedom Day is the day the average American has earned enough to pay all of his or her federal, state, and local taxes for the year. The Tax Foundation, which calculates Tax Freedom Day, is a nonpartisan, nonprofit research and public education organization that monitors tax policy.

Tax Freedom Day, 2002, was calculated before the Nebraska Legislature passed the cigarette and sales tax increases which will effect this year's total tax burden. Even without the adjustment for the increase in taxes, Nebraska's Tax Freedom Day comes after all of its bordering states except Wyoming (who doesn't celebrate Tax Freedom Day until May 4). In other words, Nebraskans must work longer to pay their taxes than residents of Colorado, Kansas, Iowa, Missouri and South Dakota.

Colorado and Kansas residents have earned enough to pay all of their taxes by April 24, Iowa by April 21, Missouri by April 20, and South Dakota by April 18. North Dakota, Oklahoma, and Texas celebrate Tax Freedom Day on April 17, 15, and 20 respectively.

According to the Tax Foundation, Nebraska's average income per capita ($29,656) ranks fourth in comparison to the states mentioned above. However, its state and local tax burden per capita ($3,216) ranks first among those states.

Gov. Mike Johanns' visit to the McCook Rotary Club Tuesday may have shed some light on why Nebraskans are asked to work one to ten days longer than other Midwest residents to pay their tax bills. The governor stated that "spending at the state level was growing at a pace that the state's economy could not sustain."

Johanns felt that the "big vote" on the budget issue was not the vote to override his veto of tax increases, but rather, the vote a few days earlier to override his line item veto of $74 million in spending. The Legislature voted to sustain about $30 million of the cuts, but they chose to restore $44 million back into the budget. That meant the gap had to be filled by broadening and increasing sales tax, income tax, and cigarette taxes.

Looking into his crystal ball, Gov. Johanns was optimistic about economic recovery, citing Valmont's sound earnings in the last quarter as an example. But he does warn that state tax revenues will lag behind the business sector in the economic recovery. If Nebraska's revenues do not keep up with projections in the future, a special session may be needed to again rework the budget. At that time, the Legislature must look at reductions in spending, not increases in taxes.

Our citizens deserve to celebrate Tax Freedom Day earlier in 2003.