The main concern you hear from people as an elected official, especially as a state senator, is taxes. It took three bills, several amendments and some late evening sessions, but the Legislature has advanced a measure to address income and property taxes. 

LB 873 was debated on the floor by “dividing the question”, so five sections of the bill were discussed in turn.  The first piece dealt with individual income tax rates. After much debate, the amendment was approved that would cut Nebraska’s top individual income tax rate in several steps from the current 6.84 percent to 5.84 percent by tax year 2027.

The second portion of the bill focused on corporate income tax. This portion of LB 873 would continue the phased-in reduction of the state’s top corporate income tax rate, which applies to income in excess of $100,000, approved by the Legislature last year. The committee amendment would cut the rate from the current 7.5 percent to 5.84 percent by 2027.

Next was a section to offset property tax paid towards community colleges. Similar to the existing credit for K-12 school property tax, it would create a refundable tax credit under the Nebraska Property Tax Incentive Act (NPTIA) based on the amount of property taxes paid to a community college.

That property tax credit fund was addressed in the fourth component, to ensure the refundable state income tax credit does not fall below its current amount of $548 million. NPTIA was first created by the Legislature in 2020.

Finally, a phase out of income tax on Social Security benefits was amended into the bill. This amendment included the provisions of LB825, introduced by Sen. Brett Lindstrom, to exempt Social Security from state income taxation by tax year 2025. 

The comprehensive tax bill, LB 873, now moves to second round debate. The goal of the tax package is to benefit both individuals and businesses, encourage all to stay in Nebraska and increase economic growth. I do have some concerns about how the state budget will look a few years down the road, when we are no longer experiencing the influx of federal pandemic dollars like we are right now. But it is crucial to lower tax rates and guarantee property tax credits remain in place. 

Another major piece of legislation is pending in LB 920. This bill from Judiciary Committee Chair Steve Lathrop looks at the way we impose sentencing on those convicted of crimes, and how we deal with their eventual release and parole. 

A discussion of LB 920 also involves the Governor’s plan to construct a new facility to handle current overcrowding. Nebraska presently ranks among the nation’s most overpopulated prison systems. Several senators and other state officials worked with the Crime and Justice Institute last year to look for ways to deal with the problems in Corrections. 

The study showed that while fewer inmates did enter the system in recent years, they had longer sentences and lengthy release processing. This complicates the problems of high prison population and low staffing numbers. 

As I have mentioned before, in order to achieve genuine improvement in our Corrections system, there needs to be attention given to both improving our physical capacity and enhancing our training and programming. Incarceration is expensive on many levels. Restoring previous offenders to meaningful, successful and productive lives is just so much better overall for our state and everyone involved.

Debate on LB 920 will resume next week but will also be competing for time with other key issues as we enter our final seven working days of the session.  The Legislature will be taking up a motion to override the veto of the Governor on federal rental assistance funding, as well as finalizing the South Platte canal project, the recreational lake between Lincoln and Omaha, and the nearly $1 billion package of American Rescue Plan Act (ARPA) federal fund expenditures. Also waiting to be finished up are bills on rural housing, broadband and LB 933 which would ban abortion if the Supreme Court overturns Roe v. Wade. 

I welcome your communication as we continue our work on these issues.  Please contact me at mdorn@leg.ne.gov, or call 402-471-2620. The website can be found at www.nebraskalegislature.gov