LINCOLN — With time running out on the 2019 session, Nebraska state legislators offered up a new, simpler plan for property tax relief on Thursday.
The new plan doesn’t make the complicated, and controversial, changes to how state aid to K-12 schools is distributed that were opposed by the state’s largest school districts, including Omaha and Millard. That opposition ground debate to a halt on a more comprehensive proposal, Legislative Bill 289, blocking its passage this year.
But the new proposal, chiefly crafted by State Sen. Tom Briese of Albion, is viewed as having a better chance of crossing the legislative finish line this year while allowing backers of LB 289 more time — until the 2020 session — to explain and sell its wide-ranging changes in school finance.
Briese’s proposal borrows most of the revenue-raisers contained in LB 289, sidesteps the school finance issues, and delivers a whopping 67% increase in the state property tax credits that are delivered as a discount on the tax statements of homeowners, farmers and ranchers.
“This is straight-up property tax relief for all,” the senator said, while setting the stage for reform of local educational funding next year.
The new plan doesn’t include the 1/2-cent sales tax hike and 36-cent a pack increase in cigarette taxes proposed in LB 289. But it would raise about $100 million in new tax revenue by taking away sales tax exemptions on about 20 items, such as soda pop, candy, bottled water, hair cuts and home repairs done by plumbers, roofers and other contractors.
The new revenue would be distributed back to property owners via the state property tax credit program, which would grow from the current $224 million a year in credits to about $375 million. That, according to calculations by Briese’s office, would increase the credits received by the owner of a $100,000 home from the current $86 to $145, and hike the credits for the owner of ag land from $104 to $174 for every of $100,000 in valuation.
Elkhorn Sen. Lou Ann Linehan, the chief sponsor of LB 289, said that proposal was just too big a lift because it made two dramatic changes: a major shift of the tax load from property taxes to sales taxes, and a comprehensive redo of the complex distribution formula for state aid to K-12 schools.
“We had a lot of people scared,” Linehan said. “I still believe the vast majority of people want us to do something about (high) property taxes. This (the Briese amendment) gives us a start.”
The summer and fall, she said, would be used to sell the school finance changes proposed in LB 289 — a $500 million boost in state aid to schools, along with a guarantee that each Nebraska school district would get at least 33% of its funding from the state, a big increase for small, rural and mid-sized schools that have seen their share of state aid dwindle in recent years.
The big school districts, which now get the bulk of state education aid and have the bulk of the students, opposed LB 289. They argued that there was no guarantee that the State Legislature would continue to pick up a greater share of local education costs, given past cuts in such aid. They also hated the new spending and property tax caps in the bill, which they argued would starve educational funding, particularly in future years when the state might cut back its support.
Linehan has been criss-crossing the floor of of the Legislature in recent days, hoping to round up agreement from 33 of the one-house Legislature’s 49 senators to bring LB 289 back up for debate this year. But that effort appeared to be a lost cause by Thursday, with a compromise with the large schools failing to materialize.
The author of the school aid changes in LB 289, North Platte Sen. Mike Groene complained that it was a shame that the proposal was blocked by the superintendents of the Lincoln, Millard and Omaha schools. Linehan said some of the blame lays with Ricketts, who she said failed to “engage” in serious discussions and failed to recognize the severity of the property tax problem in the state.
“He says we can cut our way out of this (problem) so tell us where to cut? Where?” Linehan said.
Meanwhile, Briese has a tax-related bill, LB 183, that has advanced to second-round debate to which he will attempt to attach his amendment during debate scheduled on Wednesday. If advanced, it could be given final approval, and enough time to overcome an almost certain veto by Gov. Pete Ricketts, before the Legislature adjourns on May 31.
Ricketts has lampooned the tax shift called for in Briese’s amendment as in LB 289 as “reverse Robin Hood,” because it would raise taxes on several items utilized by low-income Nebraskans, such as pop and candy, impacting them hardest.
But Briese said that removing sales tax exemptions on non-essential food items and services is a needed “modernization” of the state’s tax code. Spending, he said, has shifted from goods to services, adding that his bill would increase the earned income tax credit to offset the added sales taxes paid by the poor.
“This is completely and utterly a revenue, neutral tax shift,” he said. Every dollar raised in new taxes will be funneled back to taxpayers via the property tax credits, Briese said.
Briese’s plan is similar to one proposed by the governor, only on steroids. Ricketts had proposed a much smaller hike in property tax credits, $51 million, and proposed using existing state funds, rather than increasing any taxes.
Wednesday promises to be a make-or-break donnybrook in the Legislature for two of the most important issues of the 2019 session: property tax relief, and a replacement for the state’s top business incentive program, the Advantage Act.
Nebraska’s farmers and ranchers, slammed by large increases in property tax bills as the valuation of their land exploded in the past decade, have been screaming the loudest for tax relief. Their interests will collide Wednesday with those of the State Chamber of Commerce and other business groups, would have replaced the Advantage Act at the top of their agenda.
Some senators have vowed to withhold their support unless both measures move forward, and both the Briese amendment and LB 720 would need to advance on Wednesday in order to have enough time to become law this year.
The time crunch was created on Thursday, when the speaker of the Legislature, Norfolk Sen. Jim Scheer, announced that the planned, 90-day 2019 session of the Nebraska Legislature will end almost a week early, on May 31.
Former Nebraska state senator cited for urinating in public, resigns from Lincoln city post
LINCOLN, Neb. (AP) — A former Nebraska state senator who has been working for the city of Lincoln has resigned his post after being ticketed for urinating in public.
Police say David Landis was charged Tuesday after an officer saw him urinating next to his car parked just west of the County-City Building last week.
Landis told the Lincoln Journal Star on Wednesday that he regrets what he did and accepts the consequences of what he says was an irresponsible act. The misdemeanor carries a sentence of up to six months in jail. Landis also says he’s applied for pretrial diversion.
He has quit his job as director of Lincoln’s Urban Development Department. Mayor Chris Beutler appointed Landis to the position in 2007.
The two served together in the Legislature. Landis represented Lincoln’s District 46 from 1979 to 2007, after term limits kept him from the ballot.
State budget. Nebraska lawmakers advanced the main $9.3 billion state budget bill to the final round of consideration Wednesday after spending two hours debating a $174,000 piece of it.
At issue was a study of nursing homes in the state. The study, to be paid for with a combination of nursing home fines and federal funds, is to look at reimbursement, regulations and other issues with an eye to ensuring that Nebraskans can get long-term care when needed.
State Sen. Kate Bolz of Lincoln said the study had been approved by the Appropriations Committee but was mistakenly left out of the bill before first-round debate. But some senators took the opportunity to take aim at the size of the budget generally. Among them, Sen. Ben Hansen of Blair said the budget was too big and the 3% increase in state spending was too high.
Lawmakers gave second-round approval to the budget bill on a 40-7 vote, after first rejecting an amendment that would have eliminated the nursing home study.
“Innocuous” corrections bill. A legislative package dealing with state prisons and criminal sentences won 40-0 first-round approval Wednesday even after the main sponsor admitted that it wouldn’t do much to address prison overcrowding in the state.
State Sen. Steve Lathrop of Omaha, who chairs the Legislature’s Judiciary Committee, said Legislative Bill 686 represented measures that could get passed, not what really needs to be done to ease the overcrowding, which has spawned a federal civil rights lawsuit. State prisons are at 153% of design capacity, which ranks in the top two nationally for overcrowding.
Lathrop, along with Lincoln Sen. Patty Pansing Brooks, argued that Nebraska needs to do more extensive criminal sentence reform, so more offenders are sentenced to lower-cost probation and problem-solving than expensive prison beds. Sentencing changes in 2015, crafted with the help of the Council of State Governments Justice Center, have fallen far short of projections in reducing prison overcrowding.
Sen. Ernie Chambers of Omaha was even more critical of LB 686, calling it an “innocuous” bill at a time when even conservatives like the Koch brothers agree that alternatives to prison are more effective and less costly.
LB 686 would prohibit the Department of Corrections from placing seriously mentally ill inmates and other “vulnerable” prisoners in solitary confinement and would allow judges in areas where there are no problem-solving courts to sentence offenders to intensive probation sentences that could wipe out a criminal charge. Lathrop described it as a “poor-man’s” problem solving court.
Another aspect of the bill would give counties more alternatives of where to send mentally ill inmates besides state-owned treatment facilities, which have long waiting lists.
The union that represents state corrections workers issued a press release Wednesday opposing the bill. It said that because mental health options are limited in state prisons, mentally ill inmates might be forced into the general population, where they would pose a threat to security officers.
The union also opposed a part of the bill that would ban corrections officers from having cellphones in their lockers because it would prevent officers from calling family members when they are required to work overtime.
Farm wineries. A bill given first-round approval on Wednesday would allow farm wineries to have up to four tasting rooms (instead of just one), and allow them to use fewer Nebraska-grown grapes.
Right now, farm wineries are required to use at least 75% Nebraska-grown grapes or fruit. LB 592 would allow that percentage to drop to 60%, which supporters said would help wineries when drought or floods reduce the state grape harvest. The bill was portrayed as aiding the state’s wineries.
Lawmakers rejected an attempt to allow farm wineries to sell beer and other alcohol on their premises. Opponents said the provision could raise constitutional concerns because it would treat Nebraska wineries differently than other wineries and could erode the state’s system of regulating alcohol production, distribution and sales.
Revenge porn and sex trafficking. Legislative Bill 519, introduced by State Sen. Julie Slama of Peru, would give prosecutors more tools to go after those who traffic children for sex or labor. Under the bill, prosecutors could use wiretaps in investigating trafficking cases and would no longer face statutes of limitations for filing trafficking or child pornography charges.
As amended by the Judiciary Committee, the bill also spells out the kinds of damages that trafficking victims could seek in court and clarifies that child sex trafficking victims should be treated as abuse and neglect victims.
Another amendment would make it a crime for law enforcement officials to have sex with someone they have arrested or detained.
LB 630, introduced by Sen. Adam Morfeld of Lincoln, would make it a crime to threaten or harass someone by distributing sexual photos or videos of them. Such “revenge porn” gained attention earlier this year when Nebraska running back Maurice Washington was charged in California with allegedly sending a former girlfriend a video that showed her, at age 15, in sex acts with two 17-year-old boys.
The bill would make it a crime to distribute sexual photos of someone in an attempt to extort money or other valuables from them. It also would clarify laws about teenagers sending sexual photos to each other.
LB 680, introduced by Sen. Wendy DeBoer of Bennington, sets out when and how lawsuits can be filed over the disclosure of sexual photos or videos.
Home early. Speaker of Legislature Jim Scheer of Norfolk announced Thursday that the Nebraska Legislature will wrap up its session six days earlier than originally planned. The last day now will be May 31, instead of June 6.
Scheer said he plans a vote on final passage of the budget Tuesday. Bills must clear first-round debate on Wednesday to have a chance of passing this year. Lawmakers will have a chance to override any gubernatorial vetoes on bills passed on May 24.
As of Thursday, state senators had passed 52 of the 107 bills designated as priorities. Only 10 priority bills have not had at least three hours of debate.
Not everyone was happy with the early end. Omaha Sen. Justin Wayne said that too many big issues, including the state’s “crisis” in finding skilled workers, will be left undone by going home sooner.
Tax break for military retirees. LB 153, which would allow military retirees to pay state income tax on only half of their military retirement income, was advanced from the Revenue Committee on Thursday on a 6-1 vote. The measure, introduced by Gordon Sen. Tom Brewer, a decorated veteran, on behalf of the governor, won’t be debated until next year because funding for the tax break was not included in the budget. Brewer pledged to find the funding next year.
Corporate income tax cut. A bill that would lower the state’s corporate income tax rate (7.8%) so that it’s the same as the top tax rates for individuals and small businesses (6.84%) also advanced from the Revenue Committee. The bill also attempts to fix what Elkhorn Sen. Lou Ann Linehan described as a “mistake” in a law passed last year to avoid adverse impacts for state taxpayers from the tax reforms from President Donald Trump.
Others on the committee disagreed about whether it was a mistake. But Linehan said that 37,000 tax filers in the state were penalized this year because they could not deduct more than $10,000 of their local tax payments from state income taxes. That issue, she said, deserves a debate this year.