Legislation to enact a new business tax incentives package that would succeed the expiring Nebraska Advantage Act appears to be in some jeopardy.

The bill (LB720) may have become ensnared within the rural-urban differences that are apparent in the developing battle over property tax relief in the Legislature and it might struggle to command the 33 votes that would be required to jump a filibuster if opponents choose to try to trap it.

Failure to enact a new package in advance of next year's demise of Nebraska Advantage would send a negative signal to business leaders who usually plan new developments or expansion a couple of years or more in advance, supporters of the new proposal note.

A one-year extension of the current act remains available as a backup legislative plan.

Nebraska Advantage is set to expire at the end of 2020.

Debate on the new incentive package, called Imagine Nebraska, is scheduled to begin on Wednesday and Sen. Mark Kolterman of Seward, sponsor of the bill, said Monday he's on the cusp of compiling a filibuster-proof majority.

Four senators have withdrawn their co-sponsorship of the legislation, but the bill still carries 19 sponsors. Departures have included Sens. Steve Halloran of Hastings and Ben Hansen of Blair as well as Sens. Megan Hunt of Omaha and Adam Morfeld of Lincoln.

The proposal was largely rewritten after a public hearing that was marked by considerable push-back from members of the Revenue Committee who expressed concerns about the accumulated costs of current and prior incentive programs as measured in terms of lost revenue.   

Kolterman filed four additional amendments to the bill on Monday.

Meanwhile, former Sens. Dan Watermeier of Syracuse and John Harms of Scottsbluff authored a newspaper op-ed pointing to the unexpected costs of earlier incentive programs and suggesting that they are crowding out funding for property tax relief and higher education now.

"Nebraska Advantage was projected to reduce revenue by $24 million to $60 million per year," the former senators wrote. "In (fiscal) 2018, it reduced state revenue by $154 million."

The two former senators, both of whom were chairmen of the Legislature's Performance Audit Committee, suggested that "Nebraska could invest in targeted workforce training programs that are tailored to the economic needs of our state."

Or, they said, the state "could work to expand high-speed broadband coverage throughout Nebraska to ensure businesses around the state have access to this critical service."

Kolterman has argued that his amended bill focuses on "performance-based incentives" along with workforce development initiatives.

Benefits would be targeted according to a range of factors that include the number of jobs created or expanded, the amount of investment and wage figures that are tied to the project.

"When you are sitting across the table from a CEO or their (business) team asking them to locate in your community, you have to be competitive with other states when to comes to incentives," Kolterman said.

"Imagine Nebraska benefits set a base level of assistance for all projects and reward higher-wage projects and increased capital investment with additional incentives," a summary argument for the newly revised package states.

"The program benefits existing businesses across the state by rewarding high-wage job growth, keeps Nebraska competitive to attract new growth opportunities to the state and provides incentive for companies to modernize their operations to increase competitiveness."

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Reach the writer at 402-473-7248 or dwalton@journalstar.com.

On Twitter @LJSDon.


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