Committee hearing scheduled on governor’s tax proposal
NFIB/Nebraska State Director Bob Hallstrom reports from the State Capitol on the legislative week ending January 26
With 16 days of the 2018 legislative session completed, the body continues to engage in floor debate on bills carried over from the 2017 session. Committee hearings are in full swing and will continue for approximately the next 30 days.
State Director Bob Hallstrom presented testimony before a number of committees during the past week on the following issues of interest to small business:
Legislative Bill 728 – Income Taxation – Rate Increase: Introduced by Sen. Justin Wayne (Omaha), LB 728 would change the state’s individual income tax brackets and rates by adding a fifth bracket of 7.84 percent for high-income earners. (NFIB Position – Oppose)
Legislative Bill 738 – Income Taxation – Social Security Benefits: Introduced by Sen. Brett Lindstrom (Omaha), LB 738 would utilize an index for inflation for taxation of social security benefits – similar to the system in place for Nebraska’s state income tax brackets. (NFIB Position – Support)
Legislative Bill 829 – Property Tax Relief Act: LB 829, introduced by Sen. Steve Erdman (Bayard), would authorize, for taxable years beginning on or after January 1, 2019, a refundable credit against the state income tax for each taxpayer in the amount of 50 percent of the school district taxes levied on the taxpayer’s property. While NFIB is supportive of efforts to provide property tax relief for all taxpayers, the magnitude of relief sought under LB 829 ($1.1 billion) would likely require additional tax increases to fund the desired level of property tax relief. NFIB members have consistently expressed their interest in true “tax relief,” that results without a “tax shift.” (NFIB Position – Oppose)
Legislative Bill 858 –Workers’ Compensation – Disability Benefits: Introduced by Sen. Matt Hansen (Lincoln), LB 858 would provide annual adjustments for total disability benefits in proportion to the annual increase in the state’s average weekly wage. The automatically escalating disability benefits proposed under LB 858 would result in increased costs for employers. (NFIB Position – Oppose)
The following bills, which are supported by NFIB, will be considered during committee hearings in the upcoming week.
Legislative Bill 824 – Income Taxation – Social Security Benefits: Introduced by Sen. Adam Morfeld (Lincoln), LB 824 would, for taxable years beginning on or after January 1, 2019, reduce federal adjusted gross income by the amount received as benefits under the federal Social Security Act to the extent such benefits are included in federal adjusted gross income. The bill will be heard before the Revenue Committee on February 2.
Legislative Bill 947 – Nebraska Property Tax Cuts and Opportunities Act: The Revenue Committee will conduct a public hearing January 31 on Gov. Pete Ricketts’ tax relief proposal. Introduced by Sen. Jim Smith (Papillion), LB 947 would provide increased property tax relief by restructuring the state’s current Property Tax Credit Cash Fund into a new, refundable income tax credit available only to owner-occupied households in Nebraska and agricultural landowners who reside in the state.
The income tax credit would be equal to 10 percent of the property tax bill on taxpayers’ homes or farms, with the credit for homeowners capped at $230. The bill would provide property tax relief in future years when state revenue exceeds revenue forecasts. Individual and corporate income taxes would also be reduced, with the top individual income tax rate dropping from 6.84 percent to 6.75 percent in 2019 and to 6.69 percent in 2020. The maximum corporate tax rate (paid on income of more than $100,000) would be reduced from 7.81 percent to 6.75 percent in 2019, and to 6.69 percent in 2020. The measure would propose an additional $10 million in funding over the next two years for workforce development, and it would repeal the exemption of the first $10,000 from personal property taxation.
Big Floor Debates Ahead
The following bills, both of which are opposed by NFIB, could be the subject of floor debate during the next week.
Legislative Bill 211 – Minimum Wage Tipped Employees: LB 211 has surfaced on the General File agenda. Introduced by Sen. Matt Hansen (Lincoln), would increase the state minimum wage for “tipped” employees from the current rate $2.13 per hour to $3.60 on August 1, 2018 and to $4.50 on January 1, 2019.
Legislative Bill 420 – Ban The Box: Introduced by Sen. John McCollister (Omaha), LB 420 would prohibit private employers and employment agencies from asking an applicant to disclose, orally or in writing, information concerning the applicant’s criminal record or history, including any inquiries on any employment application, until the employer or employment agency has determined the applicant meets the minimum employment qualifications. The bill would apply to employers with 15 or more employees.
Small Business Day at the Capitol
NFIB/Nebraska will co-sponsor a Small Business Day at the Capitol March 13, in Lincoln.
NFIB’s co-sponsors are the Nebraska Chamber of Commerce and Industry, the Greater Omaha Chamber of Commerce, the Lincoln Chamber of Commerce, the Lincoln Independent Business Association and Nebraskans For Workers’ Compensation Equity and Fairness.
Small Business Day gives NFIB members an opportunity to network with other small business owners. Governor Ricketts is expected to speak, and there will be a legislative briefing by state senators.
Details on the time and location of Small Business Day at the Capitol will be released soon. Check www.NFIB.com/NE for the latest information.
Previous Reports, News Releases, and Editorials
Tile photo of Sen. Sue Crawford courtesy of Unicameral Update, “The Nebraska Legislature’s official news source since 1977.”