Pressure on to Find 33 Votes for Tax Increases

2019-2021 state budget advances

State Director Bob Hallstrom reports from Lincoln on the small-business agenda for the legislative week ending May 10

First-round debate on the state budget bills went much smoother than expected and lawmakers continued to process priority bills, other than the property tax relief measure (LB 289), in rapid-fire fashion.

Action was taken on Friday morning on approximately 30 “consent calendar” bills (measures advancing from committee with no dissenting votes) for which debate is limited to 15 minutes, after which a vote is taken.

Property Tax Relief Bill Stalls

The Legislature returned to action Tuesday with three hours of debate on Legislative Bill 289. At the conclusion of the day, the bill was removed from the agenda and will not reappear until the sponsor provides the Speaker of the Legislature with evidence of sufficient support (33 votes) to break the ongoing filibuster.

The proposal would:

raise the state sales tax rate from 5.5 percent to 6 percent
increase the tax on cigarettes by 36 cents a pack
increase the earned-income tax credit for low–income individuals from 10 percent to 13 percent
repeal the exemption for the first $10,000 in valuation of property for personal property tax purposes
repeal sales tax exemptions for approximately 25 services, including the following,

pet-related services
moving services
storage
hair care and hair removal services
nail care
skin care
tattoo
home services and repair (including plumbing, HVAC and electrical)
interior design
taxi, limo, ride-share
lawn care
parking
swimming pool cleaning
dating services
Teleflora
wedding planning
weight loss
personal training
clothing alteration
car repair (including brakes, scheduled maintenance and body repair)
candy, pop, bottled water, and ice.

Budget Bill Breezes Through First Round of Debate

The Legislature has advanced the state’s $9.3 billion budget for 2019–21 to Select File, with only one significant amendment to the package of seven bills advanced by the Appropriations Committee.

The Appropriations Committee had diverted $50 million over the next two years to the state’s rainy-day fund that had been proposed to be added to the Property Tax Credit Cash Fund by Gov. Pete Ricketts.

In action taken on Wednesday, the $50 million in funding was returned to the Property Tax Credit Cash Fund, which will bring the credit fund to approximately $275 million per year.

The proposed increase in the fund would provide agricultural property owners with about $128 in credit per $100,000 in valuation, with the credit for commercial and residential landowners being about $106 per $100,000 in valuation.