Legislation to create a new business tax incentives program stalled on the floor of the Legislature on Wednesday with 19 proposed amendments or motions pending and pressure to enact property tax relief woven into the debate.
The bill (LB720) will return to the agenda for debate next week on Tuesday afternoon, Sen. Mark Kolterman of Seward, its primary sponsor, said.
Kolterman said he demonstrated to Speaker Jim Scheer of Norfolk that the proposal, which was subjected to three hours of opening debate, is capable of commanding the 33 votes required to break through a filibuster.
A stalled tax reform bill (LB289) that's focused on property tax relief faces the same challenge after encountering three hours of vigorous debate last week.
Sen. Tom Briese of Albion candidly wrapped the fate of the two major issues together during Wednesday's debate.
"My support (for the tax incentives package) is conditional on passing substantial property tax relief," Briese told his colleagues.
Property taxpayers in Nebraska "need relief a whole lot more than some of these companies," he said.
While supporters of the bill, spearheaded by Sen. Mark Kolterman of Seward, focused on the importance of having the business incentive tools available to compete effectively for new and expanded business and employment development, opponents raised concerns about the growing costs of an accompanying range of extensive tax breaks.
"It's a competitive environment," Kolterman argued.
But, he said, he stands ready to "accommodate concerns" expressed by his colleagues who remain reluctant to reward companies with extensive and lingering tax breaks.
"How much revenue have we foregone?" Sen. Curt Friesen of Henderson asked. It's $1.5 billion since the first business development and job creation act was adopted in 1987, he said, and "it doesn't feel like it's working."
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The current Nebraska Advantage Act "grows Omaha and Lincoln, but is not great for rural Nebraska," Sen. Mike Groene of North Platte said.
Supporters of incentives pointed to development in communities throughout the state.
"We need a business tax incentive program," Sen. Steve Lathrop of Omaha said. "It's a fact of life. We need it to compete."
"Growth is how you get property tax relief," Sen. John Stinner of Gering suggested. And "you need a robust program" of tax incentives to spur the growth that will grow the workforce and the economy.
"Incentives work," Sen. Matt Williams of Gothenburg said, and they should be considered by the Legislature without being held "hostage to property tax relief."
Kolterman said he believes it would be "a bad idea to delay" consideration of the new Imagine Nebraska tax incentive package until next year because of the negative message that would send to business interests inside and outside the state who plan developments years in advance.
A year's delay has been eyed as a fallback alternative to enactment of the new program this year. Advantage Nebraska does not expire until the end of 2020.
Among pending amendments to the bill are proposals by Sen. Kate Bolz of Lincoln centering on workforce development and erecting "fiscal guide rails" for the new program.
Sen. John McCollister of Omaha, who said Nebraska needs to be prepared to compete in "an economic arms race," proposed inserting "a control mechanism" that would allow the state to dial back some of the entitlements after a mid-course review.
Sen. Adam Morfeld of Lincoln said he will oppose the bill until the business community decides to also be "proactive for individual workers" and supportive of legislation that helps grow the state.
Morfeld pointed to the need for the business sector to support prompt implementation of the expansion of Medicaid health care coverage approved by voters in 2018, suggesting that represents "two billion dollars in economic development" for the state.