Late night floor debate has kicked off in our Nebraska Legislature, marking the busiest time of session. We passed the state’s biennial budget on Wednesday, which will make strides in several areas. The budget allocates nearly $1 billion to property tax relief, millions of dollars to grow infrastructure in our rural communities, and places $725 million into our state’s Cash Reserve Funds to maximize Nebraska’s financial stability. Finally, the budget gives the Legislature over 200 million dollars that we can invest in additional tax relief and modernizing our tax codes. Many tax relief bills have reached the floor of the Legislature and will be considered in the next two weeks.

First, LB 64 would make Nebraska more welcoming to retirees. Senator Lindstron’s LB 64 would phase out the income tax on social security income. Currently, we are one of only 13 states that collects state income taxes on Social Security payments. This makes us an unattractive option to those that are looking for a place to retire and should be a priority of the Legislature to change. On its face, taxing Social Security income is indefensible double taxation. LB 64 has passed through the Revenue Committee and is waiting for its full debate. 

LB 387, introduced by Senator Brewer, would make Nebraska an attractive living option to those that have served in the military by exempting military retirement pay from state income taxes. 31 states currently do not tax military retirement, and Nebraska should be the next one to join them. Fortunately, LB 387 has passed through two rounds of debate, and will soon get its final vote before being signed into law.

Property tax relief has been another large discussion in the Legislature, especially over the past week. Property taxes are still the top issue that faces our state, especially in our rural areas.  

Senator Briese introduced LB 2, which would change the valuation of ag land for school bonds. Currently, this land is valued at 75% of its actual value for the purposes of property taxes from school bonds. This bill would change the value used to retire school bonded indebtedness to 50% percent of its actual value. LB 2 would fairly distribute the cost of school bonds in districts where residential property owners outnumber farmers and ranchers, who pay a larger portion of the bond debt due to higher land valuations. These ag landowners, who may not live in the school district and lack the ability to vote on the bonds, are left paying a disproportionately high proportion of the bond total. LB 2 passed the first round of debate on a vote of 38 to 3.

High taxes hurt our economic development as a state and hinders our small communities and towns in their growth. I hope that, through these tax relief bills, we can make a substantial change for the better in Nebraska.

As always, I welcome your input on issues important to you. Follow along on my Facebook and Twitter pages, both entitled “Senator Julie Slama” for more updates, or contact me directly at Senator Julie Slama, District 1 State Capitol, PO Box 94604, Lincoln NE 68509-4604; telephone: 402-471-2733; email: jslama@leg.ne.gov.