Our schedule at the legislature has been expanded and compressed at the same time. We have adopted an earlier start time and a much later end time, a shorter lunch hour and a quick dinner break. While it does give us more hours for floor debate, it greatly reduces the ability to hold meetings and catch up on calls and correspondence.

The Speaker of the Legislature implemented the change in schedule to gain back some time that is being lost to filibusters. Several controversial bills, including LB 574 and LB 626, have led a group of senators to work within the rules to slow or stop debate as much as possible. A rule change we enacted this week was designed to let more substantive debate occur on the issues by reducing the number of priority motions that could be introduced solely for the purpose of stalling a bill. However, on bills set to come up on the agenda, over 700 new amendments have been filed by those still wishing to slow down the legislature. The votes may be there to move the two bills noted above; but the total number of bills we can address will be drastically reduced simply due to a lack of time.

Even so, we have had some really good debate on the floor about important topics such as a model for statewide behavioral health services, concealed carry permits, broadband expansion and the proposal to lower income tax rates in LB 754. During the eight hours before a cloture vote, there was plenty of discussion about the merits and risks of changing the tax rate.

LB 754 lowers the tax rate to 3.99% on the top two tiers of both individual and corporate income. Today the top individual rate is 6.64% and the top corporate rate is 7.25%. Both will drop to 5.84% by 2027 because of a bill adopted last year. The current bill would drop the rate all the way down to 3.99% in the same time frame.

Other bills were amended into LB 754 as well. Childcare credits would be extended to low income parents and child care providers, this would reduce revenue coming into the state by $35 million. Another part of the bill would eliminate taxes on Social Security benefits by next year. Also related, an amendment would allow income tax on Federal Employees Retirement or Civil Service Retirement annuities to be eliminated by 2024.
Still another amendment deals with expensing and deduction of qualified property for LLCs and corporations. This depreciation was allowed in the past but had sunsetted; the amendment would put it back into law.

The arguments for this income tax proposal are familiar – people move away or stay away from Nebraska due to taxes. Corporations look at energy costs, workforce availability, but also what their employees will be paying for income tax and their own corporate income tax. The premise is you must be competitive to get companies to locate in Nebraska.

Caution lies in the ability of the state to meet obligations after the federal funds from the pandemic programs have ended, and the fact we do not yet know the total loss of state revenue from the provisions of LB 754. In the end the bill had broad support with a vote of 41 to 0, with seven not voting. This was just the first round of debate, there are two more to come before it can be sent to the governor for his signature.

The Appropriations Committee hearings are over but we are meeting in executive session to hammer out the budget. We meet over that hour lunch time and then again in the afternoon while bills are being filibustered. This week we reviewed the agency requests that were presented in January and February, before adding them to the budget package. We still have a lot of funding bills to consider, including major initiatives such as the Perkins County Canal project and corrections proposals.
So far, my priority bill that expands the availability of E-15 Ethanol at gas stations, LB 562, is held up in committee. The bill includes waivers for small or older stations and funds grants to help with equipment upgrades. Ethanol is extremely important to the whole state, the agriculture community, the corn and ethanol industries, the economy and the environment. So we will continue to work on the bill to get it in the best possible form. Yet we also have to consider if the bill would even have time to be taken up on the floor for debate this year. I have been talking with the Speaker about that possibility; the chances are somewhat slim, again due to a lack of time.

No matter the schedule, I appreciate hearing from you. Contact me at mdorn@leg.ne.gov. 402-471-2620. Thank you.