Governor’s Tax Relief Bill Coming Up For First Hearing

Date: February 05, 2017

NFIB supporting Legislative Bill 337

NFIB/Nebraska State Director Bob Hallstrom’s report from Lincoln for the legislative week ending February 3.

The Legislature continues to operate under temporary rules since they have yet to agree on permanent rules to govern the session. Lawmakers have reached a stalemate on rules relating to filibusters and motions for cloture.  Under current rules, a cloture motion to cease debate and proceed to vote on a measure requires 33 votes to prevail.  A rule change under consideration would require 20 affirmative votes to defeat a cloture motion and stop a bill from advancing.  As the week ended, no resolution was in sight and the body will continue debate on the proposed rules next week.

Tax Relief

The following measures, introduced on behalf of Gov. Pete Ricketts, that would provide income and property tax relief will be heard by the Revenue Committee on February 8. NFIB members express broad support for tax relief, including both property and income tax relief, on the 2017 NFIB State Ballot.

Legislative Bill 337 – Income Taxation: Introduced by Sen. Jim Smith (Papillion), the legislation would provide for reductions in the top individual income tax rate bracket beginning in 2021 and continuing through 2027. The rate would be reduced from 6.84 percent to 5.99 percent. The bill would condition rate reductions upon the expected rate of growth in net General Fund receipts as determined by the Tax Rate Review Committee with reductions to be deferred or voided if the rate of growth does not exceed 3.5 percent, with such deferral to remain in place until the expected rate of growth exceeds 4.2 percent for the upcoming fiscal year. (NFIB Position-Support)

Legislative Bill 338 – Agricultural Valuation Fairness Act: Introduced by Sen. Lydia Brasch (Bancroft), LB 338 would determine agricultural land and horticultural land values for tax purposes based upon its income-producing capacity. It would require the property tax administrator to establish capitalization rates to be applied to each class or subclass of agricultural land and horticultural land within each county, with the capitalization rates to result in an aggregate agricultural use value for the class of agricultural land and horticultural land that is between 60 percent and 75 percent of the actual value, with the aggregate agricultural use value not to increase more than 3.5 percent from the prior year. (NFIB Position-Support)

State Budget Cuts

The governor’s proposal for fiscal year 2016-17 budget adjustments included a series of specific and across-the-board cuts for this fiscal year. In addition to these appropriation adjustments, the governor also included additional transfers to the General Fund, $21.5 million from a variety of cash funds and $92 million from the Cash Reserve Fund. 

These budget actions were designed to meet the 3 percent minimum reserve at the end of fiscal year 2016-17 and to begin to address the projected shortfall for the next biennium budget. The governor had initially proposed reductions in fiscal year 2016-17 General Fund appropriations of approximately $151 million. 

The Appropriations Committee, under LB 22, “added back” approximately $14 million to the governor’s proposed reductions, resulting in budget cuts of approximately $137 million. The principal areas in which lower budget cuts were made by the Appropriations Committee include:

  • storm water management grants ($600,000)
  • the university system ($5,173,000)
  • the Nebraska Opportunity Grant Program ($275,000)
  • ESU core services ($275,000)
  • court operations ($900,000)
  • probation services ($615,000)
  • community corrections ($576,000)
  • the juvenile justice system ($1,845,000).

The Legislature gave first-round approval to LB 22 on February 3.

Upcoming Hearings

The Business and Labor Committee will hold hearings on February 6 for the following bills of interest to small business. NFIB State Director Bob Hallstrom will present testimony in opposition to each of these bills:

Legislative Bill 305 – Paid Family Medical Leave Insurance Act: Introduced by Sen. Sue Crawford (Bellevue), LB 305 would establish a statewide paid family medical leave insurance program similar to Nebraska’s unemployment insurance system and managed by the state Department of Labor.

Legislative Bill 372 – Nebraska Fair Employment Practice Act: Introduced by Senator Crawford, the measure would expand the Nebraska fair employment practices act to prohibit discrimination based on family-care responsibilities, (providing direct and ongoing care for a person’s spouse, child, parent, sibling, grandchild, or grandparent or a child or parent of such person’s spouse).

Previous Reports and News Releases

January 30 News Release—Comment on Governor’s Press Conference, Today

January 27 Report—NFIB Fighting Habitual Abusers of Unemployment Insurance

January 20 Report—Bill Introduction Period Expires in Nebraska Legislature

January 13 Report—Bill Introductions Less Than Normal in Nebraska Legislature

January 12 News Release—Comment on Today’s State-of-the-State Address

January 6 Report—Nebraska Legislature Opens for Business

[Tile photo of Sen. Jim Smith courtesy of the Nebraska Unicameral Legislature.]

Related Content: Small Business News | Nebraska | Taxes

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