It’s over.
Even after such a grueling session, where daily agendas shifted from quick advancement of bills to breakdowns fueled by frustration over not making progress on certain issues, and at times personal animosities, not all senators were pleased that it ended six days early. Some felt that sticking it out for the full 90 days could have resulted in resolution of the tax stalemate. Others knew full well it was time to go home. In a rare roll call vote to adjourn, nine senators said let’s stick it out and 37 said enough is enough. Regardless, au revoir.
LB 720
Our biggest disappointment is certainly the delay in approval of ImagiNE Nebraska. This was by no means the result of lack of effort. Public Policy had the full assets of our Economic Development and Marketing teams, along with myriad allied organizations. There is ample support in the Legislature for its enactment, and in the words of bill sponsor Senator Mark Kolterman, “it will advance next year.” That will happen, though it will require, in one way or another, addressing the concerns of those senators who believe that reducing the property tax burden is paramount. (Sadly, legislative hostage taking is no longer something kept in the shadows.)
Property Taxes
Debate on property taxes is bound to continue for years to come. The Legislature increased the annual property tax credit fund to $275 million. That does not impress some, though it is well beyond what some will say is the “cost” of Nebraska’s economic development programs. (It is well beyond the estimates of those who say that that incentives such as Nebraska Advantage “cost” large sums of money rather than fueling economic growth and accompanying revenue gains). Proposals to fund property tax reductions through increasing the sales tax rate and broadening the base saw long days and evenings of debate but fell short in the end.
Income Tax
Reduction of the income tax burden remains a Chamber priority. This was in play as the session progressed and included a Revenue Committee proposal to lower the corporate to match the top (6.84 percent) individual rate. LB 288, as reported by the committee, would have not only reduced the corporate rate but also allowed for full deduction of property taxes paid, beyond the federal $10,000 limit. To “pay” for this, though, this plan would require out-of-state businesses to pay income tax on earnings from intangibles such as franchise logos, and it would reinstate both the additional income tax and phase out of the personal exemption credit for those with higher incomes. That is a lot to consider with only six days remaining in the session. At the very least, this fell victim to the calendar.
Progress
The session was not without wins.
- Senators approved the Appropriations Committee’s recommendations for a new two-year state budget that addresses some key needs but only a modest growth rate.
- Kudos to Stephen Osberg and the team he put together to enact legislation to create a regional transit system for Metro Omaha—a transformational development. Senators from across the statewide supported LB 429 (Senator Wayne) to the extent that it overcame a veto by the Governor.
- LB 616 (Senator Hilgers) will provide for accelerated construction of large, high priority highway projects.
LB 177 (Senator Lindstrom) extends the Papio-Missouri NRD bonding authority for flood control projects, and effort that will protect current development in Douglas and Sarpy Counties and foster future expansions. (This was no easy undertaking, even as floodwaters swirled.)
Defense
The value of effective defense is not something that should go unnoticed. We successfully held off a number of proposals that would be very damaging to Nebraska’s employers and employees. First among those would be repeal of the Sub-S/LLC out-of-state income and special capital gains exclusions.
The Road Ahead
Preparations are already in the works for the Legislature’s return on January 8. ImagiNE Nebraska remains on Select File and ready for enactment. Tax negotiations will continue in the interim, and new approaches to issues such as workforce development will be advanced.
As always, big thanks to Chamber volunteers and staff who contributed to development of legislation, provided committee testimony, put in rotunda duty, and contacted senators. It makes all the difference.
Have a great summer, all.
Jennifer Creager
Senior Director, Public Policy
808 Conagra Dr., Ste. 400, Omaha, NE 68102
Lincoln Office: 402-474-4960
Refer to the Public Policy page on the Greater Omaha Chamber’s website or contact Jennifer Creager or Tim Stuart at 402.474.4960 if you have questions.
Also, click here if you are interested in reading the Legislature’s Update of the happenings in Lincoln.