Tax breaks for workforce housing among bills passed as Legislature adjourns

Govl. Pete Ricketts addresses Nebraska Legislature on final day of 2018 session (Photo by Fred Knapp, NET News)
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April 18, 2018 - 5:58pm

The Nebraska Legislature concluded its 2018 session Wednesday, passing more than two dozen bills with little debate and leaving their fate to Gov. Pete Ricketts.

The day began with Sen. Mike Groene condemning a fake Facebook account that had been opened in his name, portraying him as a white supremacist. Groene, who’s not on Facebook, said he’d contacted the company and the site was now down. But he vowed future action. “We need to police the internet. I am firmly going to pursue that. How someone can put and open a website or a Facebook in your name has to stop. There has to be some accountability,” Groene said.

After that, the Legislature got down to final votes. Among the bills passed Wednesday, only a few prompted any debate. One of those was LB496 by Sen. John Stinner, which would allow tax breaks in the form of tax increment financing to projects aimed at creating workforce housing.

Under tax increment financing, property owners are allowed to keep money that would have gone to pay taxes on the increased value of property, with the expectation that will lower housing prices. Businesses across the state have complained they have jobs that go unfilled because there’s a shortage of housing for their employees.

However, Sen. Curt Friesen of Henderson suggested the answer was not to subsidize housing construction. “Once we go down the line of subsidizing everything that someone needs, we are almost encouraging the pay level to stay lower. To me with our low unemployment rate, our wages should be climbing. And I think they could be on the verge of doing that. When you look in all areas of the state there’s a demand for workers,” he said.

“To me the first question I ask (business people) is ‘If you’re willing to raise your wages, could you attract people to move to town?’ And they all kind of nod their heads and say ‘Yeah, I suppose.’ Well, then, quit complaining and raise your wages,” Friesen added.

Sen. Steve Erdman argued that tax increment financing, or TIF, puts additional pressure on property taxes. “When you start these TIF projects, especially when you use it for construction for housing, then you’re going to increase the amount of TIF projects that you have, and you’re going to increase the amount of revenue that is lost by your school district and your county and city,” Erdman said. “So if you came here you, or you are here and your opinion is our property tax(es) are too high, and you vote for (LB)496, guess what? You just voted to raise property tax.”

Sen. Matt Williams pushed back against that idea. “You can’t take away taxes that they don’t have. The original tax on the property, before the development – whatever that amount of tax is -- continues to go to the taxing entity even if the project is subject to a redevelopment plan, the  public hearing, and eventually the use of tax increment financing,” Williams said. Under the bill, local governments would have to approve projects that would be eligible for TIF.

Stinner said the bill was essential for encouraging economic growth. “This is important legislation. And don’t be duped into the fact that this is a tax increase. This is actually broadening the base. How could broadening the base possibly be taking away from taxes?” Stinner said.

After less than an hour, senators voted to cut off debate, then gave the bill final approval on a vote of 35-8.

Senators also gave final approval to other bills, including proposals to allow terminally ill patients access to drugs not fully tested; increasing regulation on payday lenders, and repealing a law that allows counties to exterminate prairie dogs without making sure landowners receive notice. They also approved putting social workers in Educational Service Units; addressing complaints of sexual harassment in the State Patrol, and requiring bottle clubs to get liquor licenses. The bills now go to Gov. Pete Ricketts, and if he vetoes them, the Legislature will not be able to override.

After the voting, the governor addressed lawmakers, thanking them for their work. Ricketts mentioned several bills they passed, including ones to avoid tax increases that would otherwise have occurred due to federal tax changes. But he also mentioned a caveat. “While we made some progress, we certainly had our challenges on taxes as well. Despite overwhelming public support -- including groups like the Nebraska Farm Bureau, the Soybean Association, the Dairymen, Pork Producers, our state Chamber (of Commerce), the Omaha Chamber, the Lincoln Chamber – property tax relief was not passed this year,” Ricketts said.

Ricketts vowed to keep on working on the issue, and lawmakers adjourned for the year. Thirteen senators have called for a special session to address property taxes, but that would take the support of 20 more by Monday over the opposition of the governor and Speaker of the Legislature Jim Scheer, making it unlikely. Otherwise, senators are not scheduled to return until next January.






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