Property tax measure fails; corporate tax incentives advance in Nebraska Legislature

Sen. Tom Briese debates property taxes Wednesday (Photo by Fred Knapp, NET News)
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May 22, 2019 - 6:08pm

Senators rejected a scaled-down property tax relief proposal in the Nebraska Legislature Wednesday, casting doubt on a new generation of corporate tax incentives that won first- round approval earlier in the day.


 The proposed update of Nebraska’s tax incentive program is dubbed the “ImagiNE Nebraska” Act. Early in Wednesday’s debate, Sen. Tom Brandt of Plymouth made it clear the proposal had not captured his imagination. “I imagine that the new bill will suck up three percent of all state revenues like the old act. I imagine the governor and the chamber consider the new corporate welfare program to be ‘no new taxes’ – the same corporations that received a 40 percent federal reduction in taxes owed on the federal side – most people did not get a 40 percent tax break,” Brandt said.

Brandt’s sentiments about the proposal, LB720, were echoed by other senators representing largely rural districts, like Dave Murman of Glenvil. “I know that many of us, including myself, were elected solely based on the promise that we do our best to accomplish property tax relief. If LB720 passes, we are disregarding what the state of Nebraska needs.  Our constituents are struggling. Creating a new tax incentive program is not our number one priority. What we need is property tax relief if we really want to grow,” Murman said.

Others, like Sen. Matt Williams of Gothenburg, disputed the idea that corporate tax incentives don’t help agriculture. “Twenty six percent of the projects that we have incented are in value-added ag. So making a separation, that this does not support our state’s number one industry, is simply wrong,” Williams said.

Williams also warned the current tax incentives are set to expire next year. “That’s like hanging the ‘We’re closed for business soon’ (sign) outside. Businesses that are looking to expand, whether they’re already in our state and looking to expand or companies that may come here demand certainty. They plan ahead. They don’t plan six months in advance for major projects. They plan years in advance,” he said.

And Sen. Lou Ann Linehan of Elkhorn, anticipating debate on a property tax proposal she supports, urged senators to get behind both measures. “We have to look at the big picture – the whole state – and be state senators. Not senators for this group or that group, or for this school district vs. that school district. We need to look at the big picture and ask everyone to do what’s right for the whole state,” Linehan said.

Speaker of the Legislature Sen. Jim Scheer of Norfolk also urged support for the incentive bill, saying senators who wanted it and senators whose priority is property tax relief need to trust each other. “We’ve got an option here. We can do something for a lot of people here, both from the business perspective and from the agricultural,” Scheer said.

This was the vote on advancing LB720

Senators adopted amendments to address criticisms of the bill, including one that added a fund of up to $2 million for projects in counties with fewer than 40,000 people, and another specifying that jobs generally had to be 30 hours a week or more to qualify for incentives. They then gave the bill first-round approval on a vote of 29-5.

Debate then moved on to property taxes. Sen. Tom Briese was proposing a scaled-down version of a property tax relief proposal. An earlier proposal would have raised more than $300 million by increasing sales and cigarette taxes, ending sales tax exemptions, and funneling increased revenues to schools to offset property taxes.

The latest version relies only on ending exemptions, to the tune of about $100 million. Brandt said that would be a step in the right direction. “A lot of my constituents in District 32 have had increases exceeding 100 percent on property taxes in the last 10 years. Nebraskans need some form of property tax relief, and they need it now,” he said.

But Sen. Kate Bolz of Lincoln said some of the exemptions the bill would eliminate would have a regressive effect, taking more proportionately more money from low-income than high-income people. In an exchange with Briese, Bolz questioned the fairness of taxing motor vehicle repairs. “That would apply equally to motor vehicle repair for someone in my district who say, has a truck that he uses for his roofing business or a van that she uses for her floral delivery business, is that accurate?” Bolz asked .

“Yes, that would be accurate,” Briese responded, before Bolz cut him off.

“So that’s one of my concerns, is that we already have an exemption for folks who work in the ag industry, for their vehicles, so that seems a little disproportionate,” Bolz continued.

This was the cloture vote on the property tax bill.

Some senators said the proposal wouldn’t do enough to change property taxes, and more basic reforms are needed. That led Sen. Linehan to complain no solution seemed satisfactory. “It’s like a fairytale, you know? ‘This chair’s too big, this chair’s not big enough. This one’s just right’ – I don’t know. Where are we ‘just right,’ guys?  Where’s ‘just right?’” she asked.

An attempt to cut off debate and vote on the bill got only 23 of the 33 votes it needed, killing the bill for the year. Following the vote, Sen. Briese predicted many senators would now have a problem supporting  tax incentives, which he termed “corporate giveaways.” Briese said senators’ actions send a clear message to Nebraskans that a ballot initiative may be their only option to cut property taxes.

And in other action Wednesday, senators gave second-round approval to a bill legalizing hemp farming, after adopting an amendment to fine people transporting hemp without proper documentation $1,000. Sen. Justin Wayne said the amendment’s intended to prevent people transporting marijuana from claiming it’s hemp, which could be expensive to test.

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