LINCOLN — A group of business and government organizations publicly launched its effort Thursday to oppose the initiative petition seeking to replace all state taxes with a consumption tax.

They called the EPIC Option Consumption Tax initiative “flawed,” a “devastating” elimination of local government control, and a proposal based on inaccurate estimates of its ability to replace all sales, income and property taxes.

“Property taxes in Nebraska are too high, but EPIC is not the solution,” said former State Sen. Dan Hughes of Venango.

New report: 21.6% tax rate needed

A new analysis of the EPIC tax, released Thursday morning by the business-oriented Tax Foundation, reported that a consumption tax rate of 21.6% percent would be required to totally replace other state taxes — much higher than the 7.5% stated by EPIC backers.

The Tax Foundation results mirror a similar analysis done in March for the OpenSky Policy Institute, which concluded that an EPIC tax of 22.1% would be needed.

That would dramatically harm the state’s economy, the EPIC opponents said.

Their campaign slogan: “Stop Nebraska from Making an EPIC Mistake.”

“If you tax goods and services at 22%, no one is going to shop in Nebraska,” said former State Sen. Brett Lindstrom of Omaha.

He pointed out that 75% of the state’s population lives within an hour’s drive of another state and that they would likely cross the border to shop because of  the higher EPIC tax rate in Nebraska.

Hughes and Lindstrom were among speakers at a press conference called Thursday by the new group, “No New Taxes Nebraska,” which has formed to opposed the EPIC tax idea.

Chamber, cities oppose EPIC

Other speakers represented the League of Nebraska Municipalities, the Nebraska Chamber of Commerce, the Nebraska Hospital Association, Nebraska Realtors, and the Nebraska Health Care Association.

They said they formed an opposition group to counteract “misinformation” being spread by EPIC backers at meetings across the state as part of their signature drive to put the issue on the November ballot.

State Sen. Steve Erdman of Bayard, a leading proponent of the EPIC tax, said he wasn’t surprised by the opposition. He said it’s been those organizations that have been spreading misinformation.

He said that members of the No New Taxes group are those who benefit from current tax breaks or who gain revenue from the current tax system, which he described as picking “winners and losers.”

The organized opposition “tells me we are on the right track,” Erdman told fellow senators about the formation of the No New Taxes group.

Erdman maintained that the new group is being financed by former Gov. and now U.S. Sen. Pete Ricketts “and his people.”

Ricketts consultant, adviser

Axiom Strategies, a political consulting firm used by Ricketts in past campaigns, distributed press releases Thursday about the No New Taxes group. The firm also lists Jessica Flanagain, a former special adviser to Ricketts, as a partner.

Hughes and Lindstrom said the State Legislature already struggles to craft a state budget and would be hard pressed to review the budgets of all school districts, cities, counties and natural resources districts in the state. The EPIC tax would be collected at the state level, then circulated back to local governments, which critics said would eliminate local control of spending.

A representative of the Nebraska Realtors said she estimated that the mortgage payments on a $288,000 home would increase by $330 a month to pay for the EPIC taxes and make it even harder to afford a new home.

A spokeswoman for the No New Taxes group, Lincoln lobbyist Korby Gilbertson, said it had not been decided whether the new organization will mount an advertising campaign against the EPIC tax. She said the group’s focus would be on “education” in meetings organized by members of the coalition.

No New Taxes Nebraska registered as a campaign committee with the Nebraska Accountability and Disclosure Commission on Feb. 20 and later listed $11,542 in donations. The Nebraska Chamber of Commerce, the Greater Omaha Chamber of Commerce, the Nebraska New Car and Truck Dealers and the Nebraska Hospital Association were all listed as giving $2,500 each.

The last spending report by the EPIC tax committee, as of the end of January, listed $42,390 cash on hand.

In November, backers of the tax change pleaded for contributions so they could hire enough paid, professional petition circulators to qualify for the 2024 ballot — an effort that typically requires spending of $1 million or more.