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Property tax relief collapses; business incentives in doubt

Property tax relief collapses; business incentives in doubt


A final effort to increase property tax relief beyond the $51 million annual hike in the property tax credit fund already approved by the Legislature collapsed Wednesday night.

The demise of the $112 million proposal, authored by Sen. Tom Briese of Albion, immediately placed the fate of a bill to enact a modernized business tax incentives program in doubt.

Senators had edged during the day toward an uneasy and fragile alliance that attempted to tie support for the two proposals together into what Briese had described as "a package deal."

Following the demise of the tax plan, which disappeared from the legislative agenda when a motion to free the bill from a filibuster led by Sen. Ernie Chambers of Omaha failed, Briese said he would "find it very problematic to support corporate giveaways after turning our backs on working Nebraskans," including ag producers and homeowners.

Legislative refusal to increase property tax relief is "a clear signal to Nebraskans that (a pending property tax ballot initiative) may be their only option" if they want to obtain meaningful property tax reduction, Briese said.

Following a full afternoon of debate, the business tax incentive proposal (LB720) was advanced from first-stage floor consideration on a 29-5 vote with 15 senators appearing to send a message to sponsors of the bill by declining to vote on the motion.

"No way I'm going to support this without simultaneously reducing property taxes," Briese had signaled in offering his proposal as an amendment to a pending tax bill (LB183) at the second stage of floor consideration. 

It was an afternoon and evening of legislative intrigue, with senators huddling on the floor in small groups as they appeared to tie the two major bills together in the waning days of a legislative session that's scheduled to end next week.

The modernized tax incentives bill, sponsored by Sen. Mark Kolterman of Seward, was amended to bolster its support with approval of proposals authored by Sens. Kate Bolz and Anna Wishart, both of Lincoln.

The Bolz amendment added a customized job training program to the new incentive package, and Wishart added requirements for health care benefits along with a social benefits incentive package.

Kolterman said that the proposal already had been reshaped to meet rural concerns, including lowering the employment expansion threshold for earning tax incentives.

Reaching out to supporters of the Briese bill following advancement of his own proposal, Kolterman said: "I like this bill; I am supportive of this bill."

The evening motion to free the tax bill fell 10 votes short on a 23-7 vote, signaling the end of this year's property tax debate. 

Last week, a comprehensive tax reform proposal authored by the Revenue Committee that would have raised $372 million in new revenue to fund property tax reduction stalled on the floor of the Legislature and never gathered the support required to return to the agenda.

The Briese plan would have eliminated 28 sales tax exemptions, including those applied to candy, soft drinks, bottled war and motor vehicle repair, while increasing the earned income tax credit to help reduce the impact of sales tax increases on low-income Nebraskans. 

The new business tax incentives package, known as Imagine Nebraska, cleared a cloture vote on a 37-8 count before being advanced.

A number of senators questioned whether the current Nebraska Advantage program, which is due to expire at the end of 2020, has been worth the cost and whether it has been beneficial to the state beyond Omaha and Lincoln.

Tax incentive programs have led to $30 billion of investment and creation of 100,000 jobs, Kolterman said, with 43 percent of the benefits realized in rural Nebraska.

A number of senators suggested that Nebraska cannot afford to walk away from business tax incentives when it is competing with other states for investments and job creation.

"It's too important not to move," Sen. Steve Lathrop of Omaha said.

"We can't sit on the sidelines," Sen. John McCollister of Omaha said.

"There's no proof this works," Sen. Curt Friesen of Henderson countered.

"There are a thousand employees in my town that would not be there without tax incentives," Speaker Jim Scheer of Norfolk said. Half of them, he said, are earning six-figure incomes.

Scheer urged senators to trust one another as they considered both the tax incentive and property tax relief proposals.

"These two bills will only pass if they both pass," Scheer said.  "I'm convinced of that."

Reach the writer at 402-473-7248 or

On Twitter @LJSDon.


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