Budget Proposal Would Allocate $1.1 Billion in Nebraska Property Tax Credits

Date: March 12, 2021

Virtual Small Business Day at the Capitol set for April 7

State Director Bob Hallstrom reports from Lincoln on the small-business agenda for the legislative and political week ending March 12

As of the close of business on Friday, committee hearings have been completed and priority bill designations will wrap up early next week when the Speaker of the Legislature selects his 25 priority bills. Balancing the state budget and debating priority bills will no doubt dominate the balance of the session. Full-day floor debate will commence in earnest early next week.

Budget Package Unveiled

The Appropriations Committee has submitted the framework of its $9.7 billion, two–year state budget. Holding spending growth to an average of 1.5 percent over the next two years, the proposed budget leaves room for about $390 million to address other legislative priorities.

The Appropriations Committee budget would allocate more than $1.1 billion toward property tax credits and provides room for other tax–relief measures over the two–year period. Funding for the property tax credit through income tax refunds will increase from $125 million to $313 million in the next year, in addition to the existing annual funding of $275 million in funding of the Property Tax Credit Fund.

Revenue Committee Advances Tax Cuts

The Revenue Committee has responded to the rosy fiscal outlook by advancing a series of tax cut measures. Among the measures advancing to General File were:

  • Legislative Bill 680 – Income Taxation: Sen. Lou Ann Linehan (Elkhorn) has introduced LB 680, which would reduce the tax rate on corporate income in excess of $100,000 from 7.81 percent to 6.84 percent beginning January 1, 2022.
  • Legislative Bill 26 – Sales Tax Exemption: Sen. Justin Wayne (Omaha) is the sponsor of LB 26, which would provide a sale and use tax exemption for residential water service. Sen. Rich Pahls (Omaha) has designated LB 26 as his individual priority bill.
  • Legislative Bill 64 Taxation of Social Security Benefits: Introduced by Sen. Brett Lindstrom (Omaha), and designated as a priority bill by Sen. Mark Kolterman (Seward), LB 64 would provide, for tax years beginning on or after January 1, 2021, for a phased in reduction of income taxation of Social Security benefits by 20 percent each year until federal adjusted gross income is reduced by 100 percent of the benefits for tax years beginning on or after January 1, 2025.
Workers’ Compensation Bill Advances

The Judiciary Committee has advanced Legislative Bill 256 to General File on a 7-0 vote. Introduced by Sen. Matt Hansen (Lincoln), LB 256 would clarify that a release of a lump-sum settlement for indemnity benefits only, that is not required to be submitted for approval by the Compensation Court, need not contain allegations regarding eligibility for Medicare if the employee’s right to receive future medical, surgical, and hospital services is specifically excluded from the settlement and Medicare has not paid medical, surgical, or hospital expenses or if Medicare has paid medical, surgical, or hospital expenses for which it claims it is entitled to reimbursement and Medicare has been reimbursed for such expenses at the time the settlement is executed.

Other Bills of Interest

The Legislature took action on the following bills of interest to NFIB during the past week:

  • Legislative Bill 387 – Military Retirement: Advancing to Select File was LB 387, a bill introduced by Sen. Tom Brewer (Gordon) and designated as a priority by Sen. Tim Gragert (Creighton), would, for tax years beginning on or after January 1, 2022, exclude 100 percent (was 50 percent) of military retirement benefit income to the extent included in federal adjusted gross income.
  • Legislative Bill 440 – Nebraska’s Fair Employment Practices Act: The Business and Labor Committee has advanced LB 440 to General File on a vote of 7-0. Introduced by Senator Hansen, LB 440 would require notice of a charge under the Nebraska Fair Employment Practices Act to be served upon the person against whom the charge is made within 10 business days (was 10 days) after filing the written charge of violation. The bill also would eliminate the requirement for a mandatory finding against a respondent who fails to respond to a charge within 30 days.

The Legislature is also considering legislation bills which would provide $10 million annually in tax credits to build youth sports complexes and railroad spurs. (LB 39 and LB 40)

Priority Bill Designations

Senator Priority

  • Legislative Bill 139 – Senator Slama – COVID-19 Liability Protection Act (NFIB Position – Support)
  • Legislative Bill 260 – Senator Hunt – Unemployment Insurance – Voluntarily Leave (NFIB Position – Watch)
  • Legislative Bill 387 – Senator Gragert – Military Retirement (NFIB Position – Support)
  • Legislative Bill 388 – Senator Hilgers – Nebraska Broadband Bridge Act (NFIB Position – Support)
  • Legislative Bill 408 – Senator Geist – Property Tax Request Act (NFIB Position – Support)
  • Legislative Bill 644 – Senator B. Hansen – Property Tax Request Act (NFIB Position – Support)
  • Legislative Resolution 11 Constitutional Amendment – Senator Erdman – Constitutional Amendment (NFIB Position – Oppose)
NFIB Small Business Day at the Capitol

Mark Your Calendar! NFIB will be co-hosting the annual Small Business Day at the Capitol on April 7, 2021. This year’s event will be held “virtually,” with the event to include discussion of bills of interest to small business and presentations by individual state senators on major issues to be addressed by the Legislature. An invitation and more information regarding the meeting will be heading your way soon.

Previous Reports and Related Information
Photo courtesy of Unicameral Update, the Nebraska Legislature’s official news source since 1977





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