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On Wednesday, January 15, Governor Ricketts presented his State of the State Address to the Nebraska Legislature. The beginning of his speech focused on the events of last year. Although there was much devastation, he emphasized how Nebraskans responded with determination and generosity. A recent federal report pegged the losses stemming from last year’s weather at more than $3.4 billion. This figure does not include all the damages to the private sector, creating hardship for many homeowners, business owners, and farmers. The governor specifically recognized those that lost their life as a result of the flooding.
Eighty-four counties and five tribes submitted more than $400 million in disaster relief projects to the Federal Emergency Management Agency. FEMA generally covers 75% of the total cost, with the state and local government each contributing 12.5%. Therefore, the Governor included $50 million in his budget recommendations to cover the state’s portion, as well as an additional $9.2 million for counties that were most severely impacted by the disaster, to assist with their share.
Governor Ricketts went on to outline his top four priorities for this year. In addition to flood relief, the governor’s priorities include property tax relief, working to retain our veterans in the state, and workforce/business expansion.
The governor noted that last year the Property Tax Credit Fund was increased by 20%, bringing the annual funding up to $275 million. Governor Ricketts recommended approximately $500 million in property tax relief over the next three years. The Revenue Committee recently introduced LB 974 and the governor stated that he will work closely with them.
LB 153, which was introduced by Senator Tom Brewer, at the request of the governor, received first-round approval this past week on a 46-0 vote. This legislation would exempt 50% of military retirement benefits from the state income tax, thereby making Nebraska more competitive with surrounding states as we work to keep more veterans in our state.
The governor has proposed to invest $16 million in scholarships for students in high needs fields in an effort to increase the pool of younger generation workers. His budget recommendations also include funding for LB 720, the bill that revamps our business tax incentives, to help Nebraska compete nationally in expanding job opportunities. Eight million dollars are contained in his recommendations for the Department of Corrections to enhance salaries in order to attract and retain correctional workers.
As mentioned previously, the Revenue Committee introduced their property tax relief proposal. LB 974 will have a public hearing on Wednesday, January 22. The bill proposes to reduce the valuation of property, but only for school district taxing purposes. The taxable value of residential and commercial property would be reduced by 5% each year for three years, reducing valuations from 100% to 85%. Agricultural land would be reduced by 10% each year for two years, or from 75% to 55% of actual value.
LB 974 would also add a foundation aid factor to the state aid formula. The amount would be determined by calculating a percentage of the total state sales and income tax receipts for the prior year and dividing it by the fall membership, arriving at a state average. The percentage used increases from 5% to 15% over the first three years. There is also a provision added in the third year that would guarantee a certain amount of basic funding for every school district.
It appeared that some of the larger schools could experience a loss under LB 974. Therefore, transition aid was added to assure that no school would receive less than the previous year. The transition aid would be phased out over a 3-year period.
As we continue with bill introduction and the public hearing process gets underway, I encourage you to contact me with your thoughts and opinions on the legislation. I can be reached at email@example.com and my telephone number at the Capitol is (402) 471-2801. My mailing address is District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509.