Inheritance tax debated; faster hearings on 911 outages considered

The Nebraska Legislature began debate Tuesday on repealing the state’s inheritance tax. And senators considered legislation designed to speed up investigations and recommendations to prevent outages to the 911 emergency call system.

When a Nebraskan dies and leaves property to a son or daughter, the first $100,000 worth is exempt from tax. Anything above that is taxed at 1 percent. Nieces and nephews are taxed at 11 percent on amounts over $40,000. And non-relatives are taxed 15 percent on amounts over $25,000. The money goes to county governments.

Sen. Rob Clements wants to phase out inheritance taxes by 2028. Clements says the tax is driving retirees out of state.

“Nebraska is losing retirees to the 45 states who don't take up to 15% from their estates when they die. The saying is ‘Don't get caught dead in Nebraska,’” Clements said.

Clements said the tax is unfair, being paid by only about 12,000 people a year, while benefiting the rest of the state’s residents.

But Sen. Jane Raybould argued that that’s a reason to keep the tax, which brings in about $70 million a year, rather than shifting the burden to others.

“Inheritance tax is a progressive tax that impacts those small number of Nebraskans and their estate. Absent this source of revenue, the greater number of Nebraskans will share in the cost of any property tax increase,” Raybould said.

Sen. Brad von Gillern supported abolishing the tax. Von Gillern criticized some of the testimony against abolishing the tax that was voiced in a public hearing earlier this month.

“They said, on the record, that the inheritance tax was one of the best ways to ‘access wealth.’ Let those words settle in a little bit. Friends, that is pure socialism. If your goal is to take from the rich and give to the poor, we've already read that story. I don't think that's our goal here,” von Gillern said.

Sen. Danielle Conrad said the tax needs to be reformed, not abolished. “This inheritance tax is ensnaring too many middle class families in Nebraska…and we want to make sure that our inheritance tax is structured appropriately so that we are not overly burdening family farmers in Nebraska or the middle class,” Conrad said.

Conrad has proposed an amendment to say the tax would apply only to estates worth more than $100 million. The Legislature adjourned for the day before voting on the bill.

Also Tuesday, senators gave first-round approval to a couple of bills with no debate. One, by Sen. Steve Erdman, would have the state director of agriculture send seed corn companies a list of companies that hire young people for detasseling – removing the tops of cornstalks to prevent self-pollination. The job has traditionally been done by teenagers, but in recent years, companies have switched to using immigrant labor. They are supposed to be able to do that only if local labor is not available.

And, senators voted to advance a bill by Sen. Tom Brewer that would give a tax exemption to income earned by National Guard personnel on weekend or summer drills. Brewer introduced the measure for Gov. Jim Pillen.

Wednesday afternoon, the Transportation and Telecommunications Committee heard testimony on a proposal aimed at speeding up investigations and recommendations to prevent 911 outages. Sponsoring Sen. Wendy DeBoer said even though one outage occurred last August, the state Public Service Commission, or PSC, still had not held a public hearing on it three months later.

Her bill would require the PSC to get a copy of the report on outages that companies have to submit to the Federal Communications Commission, and hold a hearing within 90 days. DeBoer said it’s important to get information in a timely fashion.

“911 services are essential. Anytime there is an outage, the public deserves to know why the outage occurred, that there are plans in place to avoid an outage from occurring in the future, and who is being held responsible or accountable for the outage,” DeBoer said.

Appearing for the PSC, Commissioner Dan Watermeier supported the proposal. But it was opposed by Jake Lestock, representing a trade group for the wireless industry. Lestock said the carriers are already required to report 911 outages to the Federal Communications Commission, or FCC.

“Since the end of 2022, the FCC has provided federal agencies and states with easy access to this outage information. The PSC currently can access all direct filings to these reports on demand on the FCC website,” Lestock said.

However, Lestock added that information about outages is considered sensitive national security information, and expressed concern about how the PSC might handle it. That led to this exchange with Sen. Machaela Cavanaugh about disclosing the information.

“So you'll disclose it to the FCC and the FCC can disclose it to the PSC. But you don't want to have to disclose it to the PSC. You want to have the steps that the PSC currently goes through remain. We're trying to eliminate that step to, dare I say, make government more efficient,” Cavanaugh said.

“Thank you for your opinion,” Lestock replied. “I understand the FCC has certain proprietary safety disclosures, that we believe that they should be the handling this and then make sure that whoever is going to access that information adheres to the principles that it takes to in order to access that information as well.”

DeBoer said she would be happy to consider amendments to address security concerns.

Following the hearing, Watermeier said the current procedures do delay the PSC from investigating outages. But he said the commission hopes to have recommendations for avoiding future outages by this summer.

Tuesday marked the halfway point in the legislative session, with 30 of the 60 scheduled business days elapsed. So far, senators have avoided much of the rancor and filibustering that characterized last year’s session. Senators have now identified their priority bills, which will have the best chance of being debated for the rest of the session. They include controversial measures on taxes, private school scholarships, and restrictions on transgender athletes, so it remains to be seen how long the relative harmony will last.