UNICAMERAL UPDATE News published daily at Update.Legislature.ne.gov Vol. 44, Issue 17 / April 26 - 29, 2021 Corporate tax cut, Tax credit for private school other revenue measures advanced scholarship contributions, fter two days of discussion, child care stalls lawmakers gave first-round bill that A approval April 27 to a bill that would create includes several tax-related proposals, A a tax credit including a cut to Nebraska’s top scholarship program corporate income tax rate. for private school The Revenue Committee intro- students stalled on duced LB432 as a placeholder bill. A general file April 28 committee amendment would have after a failed cloture replaced it with the provisions of five motion. other bills heard by the committee LB364, intro- this session. duced by Elkhorn Omaha Sen. John Cavanaugh made Sen. Lou Ann a motion to divide the question and Linehan, would al- consider the various provisions as sepa- low individuals, rate amendments. The motion carried. passthrough entities, One amendment, adopted 30-7, estates, trusts and contained the provisions of LB680, corporations to claim introduced by Sen. Lou Ann Linehan a nonrefundable in- of Elkhorn. They would cut the state’s come tax credit of top corporate income tax rate to 6.84 up to 50 percent of percent — the same as the state’s top their state income individual income tax rate — begin- tax liability on con- ning Jan. 1, 2022. tributions they make Sen. Lou Ann Linehan said the proposed tax credit would incentiv- Corporations currently pay a state to nonprofit orga- ize donations to scholarship granting organizations, increasing the income tax rate of 5.58 percent on the nizations that grant number of low-income students who could attend private school. first $100,000 of taxable income and scholarships to stu- 7.81 percent on income in excess of dents to attend private school. Linehan said the bill would help that amount. Only Nebraska residents would be close an opportunity gap between Linehan said the change would eligible for the scholarships, which white and minority students by help- make Nebraska’s top rate more com- could be used to pay tuition and fees at ing more low-income families send petitive with those of neighboring a qualifying privately operated elemen- their children to private school. states. This would help reduce the tary or secondary school in Nebraska. Currently, she said, school choice is state’s reliance on tax incentive pro- Students would be eligible for the a privilege for wealthy and middle- grams to encourage those businesses scholarships if, among other require- class families who can afford to live to locate and expand here, she said. ments, they are a dependent member in a good public school district or pay The state Department of Revenue of a household with a gross income that private school tuition. estimates that Linehan’s proposal does not exceed the eligibility guide- “In America, a child’s opportunity would reduce general fund revenue by lines for reduced-price meals under for an education should not be deter- the National School Lunch Program. (continued page 2) (continued page 3) INSIDE: Phase-out of Social Security income tax advanced • Broadband grant funding advanced April 26 - 29, 2021 Corporate tax cut, other revenue measures advanced (continued from front page) $5 million in fiscal year 2021-22, $20 McDonnell. It was would help address a shortage of work- million in FY2022-23 and $36 million adopted on a vote ers in the trades. in FY2023-24. of 35-0. A third amend- Sen. Curt Friesen of Henderson Under the pro- ment, adopted 34-2, introduced an amendment during visions of LB299, included the provi- floor debate April 26 that would any rural or subur- sions of LB597, eliminate the rate cut. He said the ban fire protection introduced by Sen. Legislature’s priority this year should district, airport au- Sen. Mike McDonnell Joni Albrecht of be property tax relief and that lawmak- thority, city, village or nonprofit cor- Thurston. Sen. Joni Albrecht ers could examine corporate tax rates poration could provide and maintain The provisions would create a in a comprehensive tax reform effort enhanced cancer benefits for paid and $2,000 refundable state income tax next session. volunteer firefighters, the combined credit for the parent of a stillborn child North Platte Sen. Mike Groene total of which would not exceed if a fetal death certificate is filed for supported Friesen’s amendment, say- $50,000 in the firefighter’s lifetime. the child, the child had advanced to ing corporations will continue to do Beginning Jan. 1, 2022, an indi- at least the 20th week of gestation and business in Nebraska regardless of the vidual’s federal adjusted gross income the child would have been a dependent corporate tax rate. He said the main would be reduced by the amount re- of the individual claiming the credit. reason companies choose not to locate ceived by or on behalf of a firefighter The department estimates that the in Nebraska is a lack of workers. for cancer benefits under the act. provisions would reduce general fund “Cutting that tax on corporations McDonnell said this would ensure revenue by approximately $300,000 will not bring one more company that the benefits are not subject to each year beginning in fiscal year here,” Groene said. state income tax. 2022-23. Friesen’s amendment failed on a Under the provisions of LB564, Albrecht said the credit would help vote of 23-23. Twenty-five votes were Nebraska Education Savings Plan families who experience a stillbirth to needed. trust accounts could be used to pay pay for hospital and funeral expenses. A second component of the divided for the cost of certain apprenticeship Omaha Sen. Megan Hunt opposed committee amendment contained programs. the measure, saying it is intended to provisions of LB299 and LB564, both Sen. Robert Clements of Elmwood create a legal precedent that grants introduced by Omaha Sen. Mike supported the measure, saying it (continued page 4) UNICAMERAL UPDATE The Unicameral Update is a free, weekly newsletter published during the legislative session. It is produced by the Clerk of the Legislature’s Office through the Unicameral Information Office. For print subscriptions, call 402-471-2788 or email [email protected]. Visit us online at Update.Legislature.ne.gov, twitter.com/UnicamUpdate and facebook.com/UnicameralUpdate. Clerk of the Legislature: Patrick J. O’Donnell Editor: Kate Heltzel; Writers: Kyle Harpster, Ami Johnson, Mike Malloy; Photographer: Bess Ghormley Printed copies of bills, resolutions and the Legislative Journal are available at the State Capitol room 1104, or by calling 402-471-2709 or 800-742-7456. Status of bills and resolutions can be requested at that number or can be found on NebraskaLegislature.gov. Live video of hearings and floor debate can be viewed on NET2 and at NetNebraska.org/capitol. Senators may be contacted by mail at this address: Senator Name, District #, State Capitol, P.O. Box 94604, Lincoln, NE 68509-4604 Assistance provided by the Clerk of the Legislature’s Office, the Legislative Technology Center, committee clerks, legal counsels, journal clerks, pages, transcribers, mail room and bill room staff and the State Print Shop. THE NEBRASKA LEGISLATURE’S OFFICIAL NEWS SOURCE SINCE 1977 PAGE 2 • UNICAMERAL UPDATE • 107TH LEGISLATURE April 26 - 29, 2021 Tax credit for private school scholarship contributions, child care stalls (continued from front page) mined by a family’s income or ZIP the Step Up to Quality Child Care Act She introduced an amendment code,” Linehan said. and meet other requirements. that would prohibit a scholarship As introduced, LB364 would allow Individuals, estates, trusts and granting organization from discrimi- the state Department of Revenue to corporations could claim the credit, nating against students on the basis grant $10 million in credits in 2022. which could not exceed $25,000 per of race, color, religion, national origin, After that, if at least 90 percent of the taxpayer in any single year. Up to $5 ancestry, citizenship status, gender, credits in any given year are claimed, million in credits would be available sexual orientation, gender identity, the annual limit would increase by each year. disability or special education status. 25 percent. Sen. Justin Wayne of Omaha sup- Bennington Sen. Wendy DeBoer A pending Revenue Committee ported Linehan’s proposal. He said the also opposed Linehan’s proposal. amendment instead would limit the achievement gap for Black students in Under LB364, she said, those who total amount of credits available each the Omaha Public Schools district has donate to scholarship granting orga- year to $5 million. grown over the past decade and that nizations would receive a much larger The amend- Nebraska’s public school system does tax benefit than those who contribute ment also includes not offer parents true choice because to other charitable causes. the amended pro- of limits on option enrollment. “The problem isn’t the program visions of LB531, “While [the] public school system that these dollars are going to,” De- introduced by continues to operate in a way that Boer said. “It’s that this is a kind of Albion Sen. Tom neglects and outright harms the educa- tax loophole my constituents asked me Briese. Sen. Tom Briese tion of Black children, what’s amazing to come down here and not create.” Under his proposal, taxpayers who is we are the same people who are Linehan offered to amend the bill make a qualifying financial contribu- standing up to block the choice that on select file to reduce the value of the tion to certain child care and early parents want,” Wayne said.