As interim committee hearings begin, NFIB prepares for the 2020 session
With the first of the interim study hearings set to commence July 25, State Director Bob Hallstrom takes look back at the mixed bag of results the 2019 session produced for Nebraska small businesses
The 2019 legislative session began with lawmakers facing a budget shortfall of nearly $100 million and significant interest in finding a way to provide meaningful property tax relief for taxpayers.
When the session concluded May 30, the Legislature had fulfilled its constitutional duty to balance the state’s budget. The state’s two-year, $9.3 billion budget passed without any gubernatorial line-item vetoes and kept spending increases to a low 2.9% annual average.
While comprehensive tax reform was not delivered, lawmakers provided funding for an additional $51 million to the Property Tax Relief Fund, raising the amount of direct property tax relief delivered to taxpayers to $275 million annually.
Property Tax Relief Plans Fall Short
Efforts to increase property tax relief beyond the $51 million annual increase in the Property Tax Credit Fund contained within the state budget fell short of breaking a filibuster in the waning days of the session. Sen. Tom Briese (Albion) had proposed amendments to Legislative Bill 183 that would have provided approximately $112 million in additional property tax relief. The proposal would have eliminated 28 sales tax exemptions, including exemptions for candy, soft drinks, bottled water, and motor vehicle repairs while increasing the earned income tax credit for low-income Nebraskans.
NFIB opposed this measure, as well as Legislative Bill 289, which would have provided significant amounts of state aid to K–12 education in an effort to provide property tax relief of approximately $375 million to Nebraska taxpayers. LB 289 would have created a “tax shift” by:
- increasing the state sales tax from 5.5 percent to 6 percent
- eliminating the $10,000 tangible personal property tax exemption
- increasing alcohol and cigarette taxes
- and eliminating many existing sales tax exemptions.
Each of these measures would have increased the net tax burden on Nebraskans, notwithstanding the laudable goal of lowering property taxes. NFIB opposed these bills which would have merely shifted the tax burden, rather than providing a reduction in overall taxes.
Paid Leave Bills Short-Circuited
Two bills opposed by NFIB that would have mandated paid sick leave (Legislative Bill 305) and paid family leave (Legislative Bill 311) were considered by the Legislature this session.
LB 305, introduced by Sen. Sue Crawford (Bellevue), which advanced to General File, would have created a new state paid leave mandate for employers with four or more employees to provide employees with access to paid sick and safe leave. Under the bill, employees would accrue a minimum of one hour of paid sick and safe time for every 30 hours worked, with employers required to allow employees to accrue up to 40 hours of leave in a calendar year based on hours worked. The sick and safe leave could be used for reasons relating to domestic violence, stalking, or domestic abuse.
Also introduced by Senator Crawford, LB 311 would have created a new state mandate on businesses and provided nearly all employees in Nebraska with paid family medical leave for events such as:
- care for a new child after birth, adoption, or foster care placement
- leave during a serious illness or pregnancy
- and care for a family member with a serious health condition.
The bill would create a paid family medical leave insurance program, funded solely by employers and based on 1 percent of gross payroll, to provide partial wage replacement for eligible workers to care for themselves or family members. Available leave would vary between six and 12 weeks during any calendar year. The bill was prioritized by Sen. Michaela Cavanaugh (Omaha) and was debated on General File without a vote being taken on its advancement.
Bill to Allow Exchange of Employee Compensation Information Adopted
The Legislature approved Legislative Bill 217, a measure introduced by Sen. Patty Pansing Brooks (Lincoln), that would make it an unlawful employment practice for an employer to retaliate against any of its employees or applicants for employment because he or she has inquired about, discussed, or disclosed information regarding employee compensation.
NFIB played a key role in crafting amendments adopted during Select File debate to address liability and privacy concerns raised by those in the business community. The amendments clarify that employers with fewer than 15 employees are exempt from the provisions of LB 217 and that there is no obligation for any employer or employee to disclose information regarding wages, benefits or other compensation.
The amendments also prohibit employees from discussing compensation information during working hours and prohibit the disclosure or dissemination of (a) proprietary information or trade secrets; or (b) compensation information of other employees to a competitor of the employer.
With the adoption of the amendment to LB 217, NFIB removed its opposition to the legislation.
“Ban the Box” Bill Stalls
Legislative Bill 254, introduced by Sen. John McCollister (Omaha), advanced to Final Reading early in the legislative session, but lawmakers did not vote on final approval of the bill. In its original form, LB 254 would have prohibited private employers (with 15 or more employees) 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.
During floor debate on the measure, amendments supported by NFIB and other business organizations were adopted. As amended, employers may ask applicants for employment to disclose, orally or in writing, information concerning the applicant’s criminal record or history, including any inquiry on any employment application, and must afford the applicant an opportunity to explain the information and the circumstances regarding any convictions or other criminal history, including the applicant’s rehabilitation.
With the adoption of the amendment to LB 254, NFIB removed its opposition to the legislation.
UI Voluntary Leave Bill Stalls
Legislative Bill 306, introduced by Sen. Sue Crawford (Bellevue), would treat an individual leaving his or her employment to care for a family member with a serious health condition as having good cause for voluntarily leaving employment under the Unemployment Insurance Act.
Although NFIB opposed the measure in its original form, early in the session the Legislature adopted an amendment to address concerns raised by NFIB and other business representatives to ensure that an employee makes “all reasonable efforts (e.g., taking a leave of absence or considering an alternative work schedule) to preserve employment,” prior to voluntarily leaving employment to care for a family member with a serious health condition.
While the legislation was revised to remove NFIB objections, it encountered a rocky road in the legislative process. The bill, after advancing to Final Reading in its amended form, failed to pass and subsequent efforts to amend the legislation into another bill were also rejected by lawmakers.
Tax Hike for High-Income Earners Held in Committee
NFIB opposed Legislative Bill 50, introduced by Sen. Tony Vargas (Omaha) which would, effective for taxable years beginning on or after January 1, 2019, establish an additional individual income tax rate bracket of 7.84 percent for incomes over $100,000 for single individuals and incomes over $200,000 for married filing jointly.
The measure would also impose an additional tax of 1 percent on that portion of the taxpayers Nebraska taxable income in excess of $1 million and an additional tax of 2 percent on that portion of the taxpayers Nebraska taxable income in excess of $2 million.
Interim Activities
NFIB will remain busy monitoring and participating in the interim study hearing process, which will involve meetings and public hearings on issues of interest to small business. NFIB will continue to work with other interested parties to bring about income and property tax relief, without simply shifting the burden of taxation.
Click here for the schedule of interim hearings.
