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Every day before the Legislature convenes, a state senator leads the Pledge of Allegiance in the legislative chamber. I have already volunteered to lead the pledge on January 16 and will sign up again. I think it is important to set this precedence before the senators get to work each day, to instill a sense of patriotism amongst senators and to carry on a very important American tradition.
The Education Committee and the Revenue Committee held hearings this past week on several bills that were introduced to provide property tax relief and alter the school finance system to reduce the burden on property taxpayers, especially rural landowners, in supporting our K-12 schools.
LB 497, introduced by Henderson Senator Curt Friesen, was heard before the Revenue Committee. It is supported by the Nebraska Agriculture Leaders Working Group, made up of the Nebraska Cattleman, Nebraska Corn Growers Association, Nebraska Farm Bureau, Nebraska Pork Producers Association, Nebraska Soybean Association, Nebraska State Dairy Association and the Nebraska Wheat Growers Association. This legislation seeks to phase-in over a three-year period a minimum state aid guarantee for school districts to equal 50% of basic funding as determined by the state aid formula. Furthermore, for school taxation purposes only, a reduction in the value of agricultural land from 75% to 40% would be phased-in over the next three years. The local effort rate in the state aid formula would be lowered to $0.9750 and an annual maximum property tax authority would be set for each school district, to help ensure that the additional state aid is used to lower the property tax request.
To fund the property tax relief, LB 497 proposes to repeal the $10,000 personal property exemption, repeal certain sales tax exemptions (for such things as real property and motor vehicle maintenance, dry cleaning, pet services, food, personal care, travel agencies and zoo admissions), increase the cigarette tax by $1.50 per pack and increase the excise tax on alcohol. Since the state budget would not be impacted by the additional aid until the 2020/2021 fiscal year, the new revenue would allow for a transfer of $150 million to build up the Cash Reserve Fund.
LB 314 was introduced by Albion Senator Tom Briese and also heard before the Revenue Committee. This legislation recognizes that Nebraska relies too heavily on property taxes to fund K-12 education. LB 314 proposes to increase the Property Tax Credit Program by $468 million. Currently, $224 million is appropriated annually for the tax credit program which is reflected on property tax statements. LB 314 would also increase the reimbursement rate for special education, restore the allocated income tax returned to school districts to 20%, and increase the Earned Income Tax Credit from 10% to 15%. Finally, the legislation calls for a school finance study.
To fund the proposals in LB 314, several sales tax exemptions would be eliminated. The exemptions are similar to those in LB 497, except LB 314 would tax candy, soft drinks and water, instead of all groceries. As introduced, it also would raise the sales tax by ½ cent, add a surcharge on high income earners, end the tangible personal property tax exemption, eliminate state income tax itemized deductions (except medical), increase cigarette taxes and increase the excise tax on alcohol.
Senator Briese offered an amendment at the hearing to strike the increase in the excise taxes on alcohol, replacing it with a 3% increase on sales tax on alcohol and expanding the tax increase on cigarettes to all tobacco products. Local craft breweries were concerned that the 345% increase in the excise tax would severely curtail their business and the amendment aims to resolve the cash flow issue.
At this time, it is hard to predict which bill or bills will advance from the Revenue and Education committees and what amendments will be offered. I signed on as a co-sponsor of LB 497 to show that I am supportive of property tax relief. However, I am open to studying any proposal advanced to the floor of the Legislature proposing to reduce property taxes. I am supportive of eliminating certain sales tax exemptions, as they give specific people a break on taxes, but result in a higher rate that everyone must pay. It is bound to be challenging discussion.
I am interested in your thoughts on property tax relief. I can be reached at District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is email@example.com and my telephone number at the Capitol is (402) 471-2801.
Public hearings are in full swing. The Judiciary Committee went until after 9 p.m. one night this past week hearing bills regarding issues related to conversion therapy and discrimination based upon sexual orientation. One afternoon, the Transportation and Telecommunications Committee heard testimony on ten bills related to license plates, of which six would add new options for specialty plates. The executive board met over the lunch hour to hear testimony on proposed constitutional amendments to increase legislators’ salaries and to lower the age requirement for persons running for the Legislature. The Governor testified before the Revenue Committee in support of his proposal to exempt 50% of military retirement benefits from the state income tax.
The Natural Resources Committee, on which I serve, heard testimony for more than three hours on one bill dealing with eminent domain. Senator Tom Brewer of Gordon introduced LB 155 to remove the statute stating that public power building transmission to a renewable energy project is a public use. In effect, this would remove the ability of public power to use eminent domain to provide transmission lines and related facilities for a privately developed renewable energy generation facility. The legislation amends a law passed in 2010 that first opened the state to privately developed renewable energy projects.
Since Nebraska is a public power state and thus could not take advantage of the federal production tax credits that subsidize wind energy projects, the Legislature authorized private companies to build wind energy facilities. Private companies could utilize the federal tax credits, thereby making the project more financially feasible. As the cost of wind development projects have decreased, the federal production tax credits are set to be phased out entirely by 2024.
Senator Brewer has been fighting wind and transmission projects because he represents the Sandhills region. He is concerned with the route of the R-Project, a transmission line from NPPD’s Gerald Gentlemen Station near Sutherland to an existing substation east of Thedford. From there the transmission line would proceed east and connect to a second substation in Holt County. I believe the transmission line is necessary to enhance reliability and relieve congestion. Senator Brewer is concerned that private developers will use this line for wind energy facilities. I agree that eminent domain shouldn’t be used to benefit private companies. It should only be used by our public utilities on projects that are for the public good.
LB 66 was discussed on the floor of the Legislature but failed to receive first-round approval with a vote of 19-23. Twenty-five votes are necessary for advancement. LB 66 would have required cities to incorporate early childhood development in their comprehensive development plans. Discussion focused on where the daycare facilities are located within the city, whether bus lines go near them, etc. These issues may pertain to larger cities, but are not applicable to smaller towns. Although I realize the importance of addressing early childhood education in our communities, I believe that this discussion is better suited for local school boards than city government.
LB 306, introduced by Bellevue Senator Sue Crawford, would create a new category of good cause for voluntarily leaving employment for purposes of unemployment benefits. The new category would be to care for a family member with a serious health condition. The benefits would not be charged against a specific employer’s account. Committee amendments clarify that such individual must make all reasonable efforts to preserve employment before voluntarily leaving their job. LB 306 received first-round approval on a vote of 29-11.
In addition to debate by the full Legislature in the morning and committee hearings in the afternoon, I try to attend as many events as I can. I enjoy the opportunity to visit with constituents that attend these events. If you are ever at the State Capitol, make sure to contact me. I can be reached at firstname.lastname@example.org. My telephone number is (402) 471-2801 and my mailing address is District 40, P.O. Box 94604, State Capitol, Lincoln, Nebraska 68509.