Jun 16 2019

2019 Nebraska Legislature in Review


The Legislature adjourned four days earlier than planned this session. The early adjournment unfortunately reflects a troublesome situation--we have a state legislative body divided into several factions, which means it must do nearly every piece of major legislation by overcoming a filibuster by an opposition block.

Divisions were most stark on tax-related issues, state spending, efforts to redesign the K-12 school state aid formula and growth incentives for quality jobs and investment.

A few senators prioritized raising taxes and rewriting the K-12 school state aid formula as a means for delivering “tax relief.” A larger and more diverse block of senators, however, opposed these tax increases while generally being more supportive of social support, higher education, workforce development and strategic investments for growth and diversification of the state economy. 

Governor Pete Ricketts also pushed back hard against efforts to “increase taxes on one group to provide tax relief to another group.” The governor noted in a recent column that, “sadly, some state senators are talking about raising taxes on Nebraskans in the name of property tax relief.  A number of the so-called “tax relief” proposals simply shift the tax burden from one tax to another, taking money from one group of Nebraskans and giving it to another.”

The Lincoln Chamber, Nebraska Chamber of Commerce & Industry, Greater Omaha Chamber and a large coalition of other business and industry groups successfully opposed the tax increase proposals. The Lincoln Chamber opposed in part because the incidence of proposed tax increases disproportionately impacts growing urban areas, while at the same time the pay down of local property tax burdens for specific classes of property does not adequately benefit residential and commercial properties.

We will remain open to tax reform that improves the competitiveness of our tax environment for job creation and business investment, but any package must make sense for economic growth.

Updating the state’s mainline economic development program predictably got entangled with the political games in the Legislature. However, we remain optimistic about prospects for an updated, statewide economic development strategy.

Senator Mark Kolterman, the primary sponsor of LB 720 (ImagiNE Nebraska Act), worked overtime with his colleagues in the Legislature while a coalition of chambers and economic development interests from across the state worked to enhance our state’s mainline economic development program. We are certain that strong support remains in the legislative body to update and modernize this incentive program.

Kudos to Senator Kolterman and a long list of supporters of LB 720 for their positive and accommodating efforts. The proponents for growing jobs and investments developed broad consensus during legislative debate and relayed a positive story about growing opportunities across the state. The Lincoln, Omaha and State Chambers will continue to work over the Interim and we will get LB 720 enacted in 2020.

The passage of the biennial budget was a big win for Appropriations Committee Chairman John Stinner. State appropriators differed slightly from the plan submitted by Governor Ricketts. Overall, the legislative budget enacted by senators on a 35-12 vote calls for a 2.9% annual increase in state spending, which was slightly less than the 3.1% proposed by the governor. The budget includes a big $102M increase in the Property Tax Relief Credit Fund, bringing the two-year total to $550M.

We worked with several senators during the session on issues directly related to workforce development and economic development issues. We are pleased that so many are showing an interest in working on these issues. Though we are disappointed with a filibuster against workplace fairness legislation, we can see the support building. We know the time is coming soon for this important legislation, which we view as an essential component for creating a welcoming economy.

Every session includes us working on offense and defense. It was very important that we stopped legislative proposals aimed at repealing Sub-S apportionment rules and efforts by some to add more bureaucracy and costs to business.

Lincoln is well known as the epicenter of the Silicon Prairie. We are a growing community with a thriving and diversified economy. This makes our emphasis on infrastructure as important as ever and we were very pleased to help enact Senator Mike Hilgers’ legislation to accelerate the construction timeline of the Lincoln South Beltway. This legislative change also could apply to other major projects.

At the Lincoln Chamber, we want to thank senators for their service to the state. As they get back to their lives as private citizens, policy discussions will continue over the Interim. The work to improve Nebraska never stops!