Nearly all of our time the past two weeks has been taken up by either revenue or budget bills, and at the same time, discussion has covered a vast range of topics. Early in the week, we took up LB 939. Sen. Linehan proposed this bill to lower the income tax rate over a number of years. It passed the first round and was on second round debate; amendments were added to incorporate parts of Sen. Briese’s LB 723 to guarantee the fund for future property tax credits to around $560M; another one was to phase in credits for property taxes paid for community colleges over the next few years. Opponents of the bill mounted a filibuster, which would have eliminated the chance to vote on adding these amendments. 

Sen. Linehan chose to pull LB 939 and planned to use a different bill, LB 919, which would incorporate the provisions noted above. The only issue was that this bill had to start over on first round debate. As an alternative Friday morning on the floor, elements of LB 939 were amended on to Sen. Brett Lindstrom’s LB 825, which would phase out taxes on state Social Security benefits, and was already on second round debate. After four hours, a vote for cloture failed. At this time, LB 825 and the accompanying amendments are off the agenda. 

The analogy of a three-legged stool is often used in tax conversations. This concept began under Gov. Norbert Tiemann back in the 60’s. But the balance of the “stool” eroded over time as property values rose, and other taxes fell due to various changes in the economy, resulting in a shift of more of the burden on to property taxes. This year you can get 25% of school property taxes paid (excluding school bonds) as a credit on your income tax. You must apply for that, but the process has been made easier on tax forms this year, a little more user friendly. 

Turning from revenue to appropriations, we passed the three budget bills in the first round debate last week. All three, LB 1011, 1012 and 1013, were filibustered for eight hours. On Thursday, we took them up for the second round. This includes the cash reserve or “rainy day fund”, addressed in LB 1013. I would like to see at least $950 million maintained in that fund to give us a reserve and a cushion for the next couple of years as we wait to see what effect inflation and international events will have on our economy. 

 LB 1013 would use $513 million from the cash reserve to pay for $53.5 million towards the Perkins Canal project to secure water rights in the South Platte River coming into Nebraska from Colorado and $50 million for surface water irrigation improvements, which after over 50 years, need some upkeep; the “Star Wars” lake between Lincoln and Omaha, as well as upgrades and maintenance at locations such as Lewis & Clark and Lake McConaughy; economic development, rural projects, workforce housing, military base development and funds for the Youth Rehab and Treatment Center (YRTC) in Kearney. 

Some of the floor debate focused on money set aside from the cash reserve for a new prison, $175 million, sitting in a fund for use if, or when, the Legislature would decide to proceed with that construction. Based on a study of prison reform conducted last year, Sen. Lathrop introduced LB 920 and he asserts that without these changes in sentencing, we will always be behind in trying to build enough capacity for all the inmates and we will not catch up. 

Every year approximately 2000 of our 5500 prisoners are released, and we need programming and training to keep those people from offending again and getting sent back into the prison system. Instead, we need to help them become productive members of society. Sentencing guidelines, staffing, parole supervision and programming are some of our challenging issues. 

I supported LB 1073 which would have required the Governor to apply for additional rental assistance from the federal government. Nebraska is one of just two states that has not taken advantage of these federal funds. The Governor had said it was not necessary and that he would not apply for those funds. I believe these funds help fellow Nebraskans whose jobs were impacted by Covid and are struggling financially to make up lost ground. In addition the rental assistance goes to the landlords who are trying to keep their rental properties viable. 

LB 1073 passed the first and second rounds with enough of a margin to advance. However, this week, the bill only passed on Final Reading with a vote of 26. The bill had an “emergency clause” which required a vote of 33. The bottom line is without 33 votes, LB 1073 would not take effect until long after the federal deadline passes for the application. The only way to get the funds into Nebraska would be for the Governor to apply on his own. Most likely the state will not be getting these funds unless the federal government extends the deadline.

A separate budget bill, LB 1014, deals with the American Rescue Plan Act (ARPA) money allocated to Nebraska, $1.04 billion. Designated a “super priority” bill by the Legislature’s Executive Board, it allowed the Speaker to have some flexibility in scheduling amendments and the amount of time taken on each. We were able to take a vote on the bill by 6:30 pm on Wednesday. For a senator who wanted to get funding for a proposal not included in the original bill, amendments had to specify a program or project to reduce or eliminate, and move those dollars from one program to another. One successful amendment was offered by Sen. Brandt, allowing small livestock processing facilities to access funding for expansion. That should be a tremendous help to any smaller meat processors we have in District 30. 

ARPA is a time restricted, finite amount of money, so it has generated a lot of interest among the 49 legislative districts.  I am committed to being fiscally responsible and sound going forward these next few years when ARPA and other federal funding is no longer available. We cannot spend so much in the near term and then find ourselves without that revenue in the years ahead. The result could be we would then have to make painful budget cuts. We need to analyze these ARPA proposals for their value as long term investments that will help the people of Nebraska.

Action on the main budget bills needs to be completed by the 50th day of the session, which is March 29. I expect more time to be spent on extended debate, including on a ‘pull motion’ for a pro-life bill which I co-sponsored. In many ways we are running out of time to move these measures forward, but we are working late into the evenings to accomplish as much as we can. 

Please contact me if you have any questions or concerns at mdorn@leg.ne.gov, 402-471-2620. Thank you.