2019 Nebraska Legislature: Much Done; Key Issues Unresolved

Increasing the age for vaping, or smoking. Allowing farmers to grow hemp. Adding more prison beds. Those were among things the Nebraska Legislature did in its session that ended last week. Among the things the Legislature didn’t do was make major tax changes. Here’s a look at what happened, and what’s left hanging.

New laws raise the vaping and smoking age from 18 to 19, allow farmers to grow hemp, and authorize 384 new prison beds at the Lincoln Correctional Center. Other measures restrict who can be put in solitary confinement, and set up more drug and veterans courts to keep people out of prison. And people whose homes were destroyed by flooding or other natural disasters can avoid owing property tax on them.

That’s part of what senators got done over the last five months. But as to whether they did something significant on what many called their top priority – property tax relief – perspectives differ. Speaking to senators at the Capitol last week, Gov. Pete Ricketts sounded a positive note. “We have continued to make good progress. You all have increased the property tax credit relief fund by $51 million,” Ricketts said.

That’s another $51 million, added to an existing $224 million, to offset about $4.2 billion in property taxes. Other proposals, to do more – using hundreds of millions from increased sales taxes – failed this legislative session.

In his closing remarks to his colleagues, Sen. Jim Scheer, speaker of the Legislature, lamented that failure. “There were numerous well-crafted property tax relief proposals that came up this year, none of which received support to pass,” Scheer said.

Scheer identified the biggest losers. “For years, agricultural interests have been pushing us for property tax relief, and we’ve not been able to deliver in a substantial victory,” he declared.

After this year’s attempt failed, many rural senators turned around and derailed a priority of the Omaha, Lincoln, and state chambers of commerce: new corporate tax breaks.

Sen. Curt Friesen expressed frustration with business groups’ opposition to property tax relief proposals. “If I want property tax relief, I’ve been told I can’t use income tax. That’s off limits because we want to cut the rate. I can use sales tax, but evidently that wasn’t appropriate either, because we couldn’t get anything passed. So I am dependent on using growth in state revenue,” Friesen complained.

Friesen said the corporate tax incentives Nebraska has offered over the last 30 years, in the LB775 and Nebraska Advantage programs, have hurt state revenues. “I look at the money we have given away, the foregone revenue in (LB)775 and the Advantage Act, and it adds up to about $1.5 billion,” he said.

Sen. Mark Kolterman, chief sponsor of the corporate tax incentive proposal, said the businesses that have taken advantage of those tax breaks have been good for Nebraska. “I guess I’d have to say that $1.5 billion over the lifetime (of the incentive programs), vs. $30 billion in investment that’s been made -- capital investment – 100,000 new jobs, that’s not a bad return on investment.

Unresolved differences over corporate tax incentives and property taxes will be subjects for future discussion. So will other ideas. Sen. Megan Hunt listed several proposals she supported that didn’t make it this year. “My disappointment started in the very beginning of the session, when the LGBTQ workplace equality bill failed; …when my tipped minimum wage bill failed; when the bill to allow people with drug convictions to get SNAP (Supplemental Nutrition Assistance Program, or food stamps) failed,” Hunt said.

Lawmakers did pass 294 bills, including a budget that increased pay for Medicaid providers who had been cut or held flat in recent years. Another bill requires abortion providers tell women they can get medical information from a state website if they change their mind after taking the first of two abortion-inducing pills. That requirement may be challenged in court.

Several issues the Legislature debated are the subject of initiative petition drives as well by people trying to go around the Legislature and put measures on the ballot for voters to decide in November, 2020.

There’s a property tax proposal that would have the state reimburse Nebraskans for 35 percent of the property taxes they pay local governments, with no provision for where the money to pay for that would come from. There’s an initiative for medical marijuana. And there’s one for blanket marijuana legalization.

Looking back on the legislative session, Sen. Patty Pansing Brooks said proposals succeeded when senators were willing to compromise. But Pansing Brooks suggested there wasn’t enough of that going on.

“It seems to me that one of the things that’s coming out of this body is that it is the best thing to do to demand ‘My way or the highway.’ But I want you to all think about that position that many of us have taken in this body, and how it has led to nothing,” Pansing Brooks said.

Kolterman offered this advice to his colleagues: “We just need to all work together, come together and get things done for our state.”

There will be talks over the interim to see if property and corporate tax breaks can move ahead together next year, as well as studies on many other topics, before senators reconvene in January.