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An amended version of the Governor’s proposal for tax relief was advanced from the Revenue Committee with a 5-3 vote on the 46th day of this 60-day legislative session. LB 947, as amended by Revenue Committee amendments, proposes to create a refundable income tax credit for homeowners and agricultural property owners equal to a percentage of property taxes paid. For homeowners, the credit would begin at 1% of property taxes paid this year, increasing to 20% by 2030. A cap is set on the maximum credit amount each year, beginning at $25 and increasing to $500. For agricultural landowners, the credit will begin at 2% of property taxes paid and increase to 20% by 2027, with no cap placed on the maximum amount of the credit. The proposal would also reduce the highest corporate income tax rate from 7.81% to 6.84% over a five-year period and provides $5 million in funding annually for job training. LB 947 retains the Property Tax Credit Fund, created by the Legislature more than 10 years ago, and the Personal Property Tax Relief Act, just recently passed by the Legislature, exempting the first $10,000 of tangible personal property value. The Property Tax Credit program is funded with a $224 million annual appropriation and appears on tax statements as a credit after full taxes are levied.
It is estimated that the Governor’s proposal would cost approximately $50 million the first year, increasing to more than $600 million in 2030. The funding for the first year comes primarily through a transfer from the state’s cash reserve fund. The legislation does not address how the tax relief in future years would be funded.
LB 1009, pertaining to speed limits, received first-round approval this past week on a 35-2 vote. Prior to the advancement of the bill, an amendment was adopted that struck the language authorizing a 5 mph increase in the speed limit on the Interstate. Under LB 1009, the maximum speed limits would increase from 60 to 65 mph for two-lane highways and from 65 to 70 mph for super 2 highways (with passing lanes), freeways, and expressways. The higher speed limits are supported by a statistical method used by traffic engineers, which determines the speed at or below which 85% of vehicles travel. This is considered the proper speed limit for the roadway. The Department of Transportation may set a speed limit that is lower than the maximum, based on an engineering and traffic investigation considering traffic volumes, road design and other engineering considerations, such as crash data. County boards, cities, and villages have this same authority on roads under their jurisdiction.
After receiving initial approval from the Legislature on March 13, the budget was discussed at the second stage of debate this past week. Due to the controversy over the Title X language contained in LB 944, a cloture motion failed earlier in the week and was taken up again later in the week. However, the cloture motion again failed. The Legislature will now have to suspend their rule requiring the budget bills to be passed by the 50th day of a 60-day session, which falls on March 27th this year. A cloture motion is required to cut off debate on an issue that is the subject of a filibuster. A successful cloture motion requires 33 votes and allows for a vote to be taken immediately on the advancement of the legislation. Researchers could only recall three times when the budget has required a cloture vote – twice last year and in 1995.
Title X dollars are given to federally qualified health centers, providing such services as contraceptives, cervical cancer screenings, and testing and treatment for sexually transmitted diseases for low income women and men. Planned Parenthood currently qualifies for Title X funding, which is the basis for the controversy.
Last week, my cloture motion on LB 44 failed by two votes. LB 44 would have authorized our state to require out-of-state online retailers to collect sales tax, if the Supreme Court overturns an outdated ruling as predicted this summer. This means our state won’t begin collecting such revenue until legislation can be introduced and passed next year, resulting in the loss of tens of millions of dollars in tax revenue. It baffled me that more than a dozen senators objected to this.