This week was the only five-day work week the Legislature will have this session. The weeks prior to and subsequent to this week will be either weeks were lawmakers are off on Mondays or Fridays, and in some instances off both days making for a four-day weekend, allowing lawmakers whose districts are hours from Lincoln to return to their districts to meet with constituents and in some cases campaign for re-election.
Friday of this week marked the completion of the 16th legislative day of this 60-day session. In other words, the 2018 Legislature has completed 27% of the days they have this session. If you consider that the last two days of the session do not allow time for a bill to make it through all three rounds of the legislative process, along with Wednesday of this coming week marking the 18th legislative day, lawmakers will have completed one-third of this year's legislative session this coming Wednesday, not leaving much time to address the pressing issue of this session.
Those pressing issues include making adjustments to the current biennium budget, prison overcrowding, and answering the call from Nebraskan's for personal and corporate income tax relief, along with some form of property tax relief.
Some important dates to remember as the session rapidly moves forward:
February 14, Prior to Adjournment
- Deadline for senators to submit a letter to the Speaker requesting designation of a bill as a 2018 speaker priority bill.
February 20, Prior to Adjournment
- Deadline for designation of committee and senator priority bills.
February 21
- Speaker priority bills announced prior to adjournment.
Along the lines of tax relief, this week the Revenue Committee heard testimony on two ideas brought forth by lawmakers.
The first being, LB829 (Erdman), which would provide $1.1 billion in property tax relief by giving Nebraska property owners a refundable income tax credit on their State income tax return equal to 50% of that portion of their property tax bill which goes to fund K-12 education. For most property owners LB 829 will result in a 30% reduction in their property taxes.
Senator Erdman said, "the state cannot continue cutting funding for education knowing that property tax payers will have to pick up the slack."
In addition to the introduction of LB829, there is also an accompanying effort to initiate a petition drive to get the issue on the November ballot should LB829 not be passed by the Legislature this Session, letting the citizens of the State to decide.
Erdman also stated that he has not suggested ways to pay for the proposal because that would be the Legislature's job if either LB829 or the ballot initiative succeed.
Senator Erdman likewise is quoted as saying, ""I don't believe it's my job to come here and explain to you or to share with people what I think the fix is," he said. "My job is to describe to you that property tax is a problem, it's out of line and we need to fix it."
The hearing on LB829 lasted almost five hours and included support testimony from groups representing the agricultural community, as well as several farmers/ranchers individually testifying.
Likewise, opposition testimony included the Omaha and Nebraska State Chambers testifying that they agree all Nebraska taxes are too high, which is inclusive of property taxes, but LB829 is the "worst possible answer" do to the fact that it does not get to the root of the problem, that being spending by local government entities.
Opposition testimony also included the educational community. Ann Hunter-Pirtle, executive director of Stand for Schools, agreed that Nebraska replies too heavily on property tax to fund K-12 education, but leaving a billion-dollar hole in the state's budget without a method of how it will be made whole is dangerous and may also negatively impact other state services.
The Revenue Committee did not take any action on the bill as of Friday.
Secondly, the committee heard testimony on LB728 (Wayne), a bill to make multiple changes to individual income tax brackets and rates. The bill rearranges the income tax brackets, increasing the rate for the upper tier brackets and creating a new 7.84% for individual income earners over $2.5 million ($5 million jointly).
Senator Wayne said that he introduced the bill because he does not feel it is fair that income tax payers making over $29,000 annually are taxed at the same rate as those that earn substantially more. He also said that the passage of LB728 would bring in much needed tax dollars to the state and at the same time not hurt job creation.
The bill's fiscal note estimates the bill would increase state income tax revenue by approximately $4.8 million in fiscal year 2018-19 and a further $11.7 million in FY2019-20.
Senator Wayne stated, "I don't believe that a marginal 1 percent tax increase on those making $2.5 million or more a year would have any effect on our economy."
Upcoming Hearings of Interest
This coming week the Revenue Committee will continue to hear tax reform ideas in the form of LB947 (Smith, on behalf of the Governor) and LB1108 (Harr).
LB947
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Adopt the "Nebraska Property Tax Cuts and Opportunities Act", change income tax rates, and eliminate certain exemptions and credits.
The bill would make the following adjustments to property and income statute:
- Property tax - The bill repeals the current property tax credit program, approximately $225 million annually in funding to offset property taxes paid by Nebraskans. Gives homeowners (capped at $230) and ag land owners only (Nebraska resident land owners), a 10% refundable tax credit against property taxes paid and would be offset by state sales and income tax revenues, removing property tax credits for commercial and industrial property tax payers.
- Income tax - reduces the top corporate and personal income rate from 7.81% and 6.84% respectively to 6.99% over a two-year period, this income tax reduction making up for the loss of property tax reductions to commercial and industrial property tax payers.
As indicated in the bills title, it also includes "opportunities", aka jobs training component. This will be in the form of $5 million for two years for "key" jobs.
LB1108
would increase the state sales tax rate to 6% from its current level of 5.5%, estimating to raise $160 million, of which $71 million would go to state aid to schools. The bill also eliminates the trade in allowance on autos and boats, all-terrain vehicles, and utility type vehicles, raising approximately $18 million that would be allocated to the transportation infrastructure bank, along with light rail.
Action Taken by The Legislature This Week
LB275
, a bill to p
rovide duties for law enforcement agencies and private towing services and rights and duties for private property owners regarding abandoned vehicles.
The bill was advanced to Select File this week after the adoption of two amendments:
- AM445 is a Transportation Committee amendment that replaces the introduced copy of the bill and would authorize a law enforcement agency to remove an abandoned or trespassing vehicle from private property upon the request of the owner of the property. The section defines a trespassing vehicle as a vehicle parked, without permission, on private property that is not typically made available for public parking.
- AM915 strikes language in committee amendment AM445 that would have not allowed towers the ability to collect towing and/or storage fees if notice to lien holders was not made within the required timeframe.
An additional amendment is forthcoming to reinstate a reference to 60-2410 that was inadvertently stricken and is needed as a simple reference to this section of statute for lien provisions. It will be offered during Select File floor debate on the bill.
LB310
is a bill that c
hanges provisions relating to bridge carrying capacities and weight limits and operation restrictions for implements of husbandry. The bill was advanced toe Select File on Monday of this week after the adoption of an amendment that added language to not allow the crossing of a culvert that is less than 60 inches in diameter with implements of husbandry that are being operated on any highway of the state.
UPCOMING HEARINGS
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2018 Upcoming Hearings
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Hearing Date
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Bill Number
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Introducer
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Committee
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On Liner
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1/30/18
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LB830
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Vargas
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Transportation
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Change license application, prohibited acts, and franchise restriction provisions under the Motor Vehicle Industry Regulation Act. Allows a manufacturer to have a directly owned retail outlet in the State of Nebraska without going through a dealer network.
This bill is more commonly referred to as the "Tesla bill", as it is Tesla Motors who is seeking this change in current statute in order to bypass dealer franchise laws.
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1/30/18
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LB674
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Krist
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Appropriations
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State intent to appropriate funds to the Division of Aeronautics for the Civil Air Patrol.
Adds the following language: "It is the intent of the Legislature to appropriate, from the amounts credited to the Aeronautics Cash Fund from the Aircraft Fuel Tax Fund pursuant to section 3-148, $80,400 for FY2018-19 to the Division of Aeronautics of the Department of Transportation for use by the division to fund the activities of the Nebraska Wing of the Civil Air Patrol."
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1/31/18
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LB1128
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Wayne
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Government
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Prohibit counties, local governments, and certain state entities from spending legislative appropriations under certain conditions.
The bill adds the following language to existing statue: "Notwithstanding any other provision of law, any entity of county or other local government, including, but not limited to, natural resources districts, public power districts, and sanitary and improvement districts, or any entity of state government, which engages in adjudicative functions not subject to the Administrative Procedure Act, shall not have the authority to spend funds appropriated by the Legislature if the entity conducts a program that is in any way funded by a nongovernmental source, including, but not limited to, grant funds, donations, and gifts."
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1/31/18
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LB947
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Smith
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Revenue
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Adopt the Nebraska Property Tax Cuts and Opportunities Act, change income tax rates, and eliminate certain exemptions and credits. Governor Ricketts 2018 Tax Package. See above.
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1/31/18
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LB923
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Morfeld
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Judiciary
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Provide immunity for certain law enforcement employees administering naloxone and change provisions relating to immunity for persons reporting or experiencing alcohol overdoses.
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2/1/18
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LB918
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Bolz
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Revenue
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Change provisions relating to certain tax incentive programs and job training grants.
Makes changes to
Nebraska Advantage Rural Development Act and the Nebraska Advantage Act by adding the following criteria to qualify for these programs (underlined language is new language, stricken language is language that is being removed and all other text is existing language in current state statute):
- Pays a minimum qualifying wage equal to at least one hundred fifty percent of the Nebraska average weekly wage of eight dollars and twenty-five cents per hour....
- Provides health care benefits to the new equivalent employees 13 for whom tax credits are sought under the Nebraska Advantage Rural Development Act.
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2/1/18
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LB907
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Baker
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Revenue
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Change provisions relating to a sales and use tax exemption for agricultural machinery and equipment. Puts into state statue what the Nebraska Department of Revenue currently uses in their "Information Guides".
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2/1/18
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LB1108
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Harr
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Revenue
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Authorize certain tax credits (job training), change the sales tax rate (increases it by ½% for 5yrs), and provide for school foundation aid and certain grant programs
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2/2/18
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LB1098
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Hilgers
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Government
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Change dollar threshold for certain purchasing requirements under the County Purchasing Act. Raises the threshold of securing and recording at minimum three informal bids from a $5,000 $10,000 - $25,000 $50,000 on projects within this dollar range.
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2/2/18
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LB1074
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Vargas
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Revenue
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Change provisions relating to individual income tax brackets and rates and the earned income tax credit.
The bill would raise the amount of state income tax paid by those making over $100,000 annually from the current rate of 6.84% to 7.84%, along with a surcharge of 1% on earnings over $1 million and 2% on those making over $2 million annually.
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