UNICAMERAL UPDATE News published daily at Update.Legislature.ne.gov Vol. 44, Issue 4 / Jan. 25 - 29, 2021 Full tax exclusion for military Amendment retirement income proposed would limit property tax revenue growth ebraska voters could choose to limit annual growth in lo- Ncal property tax revenue to 3 percent under a proposal heard Jan. 27 by the Revenue Committee. LR22CA, introduced by Elkhorn Sen. Lou Ann Linehan at the re- quest of Gov. Pete Ricketts, would, if passed, place the proposed amend- Sen. Tom Brewer said the tax benefit would help make Nebraska more competitive. ment to Nebras- ka’s constitution Sen. Lou Ann Linehan ebraskans could exclude all Nebraska more attractive to military on the November 2022 general elec- of their military retirement retirees, many of whom go on to tion ballot. Nbenefit pay from state income second careers in the private sector. The amendment would limit the tax under a bill heard Jan. 29 by the Any tax revenue loss would be offset amount of property tax revenue raised Revenue Committee. by the economic benefits of retaining by a political subdivision in any fis- Sen. Tom Brewer of Gordon, who those highly trained and skilled work- cal year to 3 percent more than the introduced LB387 at the request of ers, he said. amount raised in the prior year. Gov. Pete Ricketts, said the bill would “The income tax exemption is not Linehan said LR22CA is a “criti- expand an exclusion the Legislature only an obvious way of expressing cal” follow-up to LB1107, passed approved last year. gratitude to our armed forces and vet- last year, which created an income Beginning in taxable year 2022, erans,” Brewer said. “This bill helps us tax credit based on the amount a individuals may exclude 50 percent keep pace with our neighbors and stop Nebraska taxpayer paid in property of their military retirement benefit missing out on opportunities to attract taxes to their school district during income to the extent it is included in these outstanding groups of individu- the previous year. federal adjusted gross income. LB387 als to grow and enrich Nebraska.” She said levy and spending limits would allow individuals to exclude 100 Additionally, he said, the change that the Legislature has imposed on percent of that income. would show the U.S. government that local governments have failed to stop The state Department of Revenue Nebraska is a military-friendly state as dramatic increases in the amount of estimates that the bill would reduce it determines the future of Offutt Air property taxes those entities collect. state income tax revenue by approxi- Force Base and the location of the new “LR22CA is necessary if we are go- mately $13 million in fiscal year 2022- U.S. Space Command headquarters. ing to get control over ever-escalating 23, $13.7 million in FY23-24 and The governor testified in support property taxes,” Linehan said. “I am $14.4 million in FY24-25. of the bill. He said five of the six sur- convinced the only limit that will work Brewer said the change would make (continued page 2) (continued page 3) INSIDE: Redistricting Committee • Committee vice chairpersons • Meet Sen. Flood • Hearing schedule January 25 - 29, 2021 Full tax exclusion for military retirement income proposed (continued from front page) rounding states do not tax military Industry, also testified in support. He and future community leaders that we retirement pay, including Iowa and said LB387 would help Nebraska ad- need to attract and retain to this state South Dakota, which have seen their dress an acute skilled labor shortage, than our military personnel when they military retiree populations grow at a which he called the state’s greatest return to private life,” Slone said. much faster rate than Nebraska’s. economic challenge of the decade. No one testified in opposition to Bryan Slone, president of the Ne- “There’s no greater and more the bill and the committee took no braska Chamber of Commerce and important group of skilled personnel immediate action on it. n Redistricting Committee edistricting is a process undertaken by the Nebraska The following entities will be affected by redistricting: R Unicameral once every ten years, led by the work of a special legislative committee. • U.S. House of Representatives The Legislature is responsible for redrawing govern- • Nebraska Legislature mental boundaries after each decennial census. This year, • State Board of Education population data from the 2020 census will be used to draw • University of Nebraska Board of Regents district lines that ensure fair and equal representation for • Nebraska Supreme Court Nebraska citizens. • Public Service Commission Current legislative district boundaries Redistricting Committee members: Sen. Carol Blood Sen. Tom Briese Sen. Tom Brewer Sen. Suzanne Geist Sen. Steve Lathrop Sen. Lou Ann Linehan Sen. John Lowe Sen. Adam Morfeld Sen. Justin Wayne 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 ailem [email protected]. Visit us online at Update.Legislature.ne.gov and follow us on Twitter.com/UnicamUpdate. 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 January 25 - 29, 2021 Amendment would limit property tax revenue growth (continued from front page) is a limit on the tax taking.” on this crucial issue.” attracting business to our state.” Under the proposal, a political sub- Mark McHargue, president of the Dennis Meyer, budget and fiscal division could override the limit after Nebraska Farm Bureau, testified in officer for Lancaster County, testified receiving the approval of a majority of support of the proposal on behalf of his in opposition to the proposal. He legal voters at a special election called organization and several other groups said counties already are constrained for that purpose. representing agricultural producers. by levy and spending limits and have The proposed cap would not ap- He said LR22CA is a “great start” no way to raise revenue aside from ply to the amount of property tax but should be combined with other property taxes. revenue needed to pay the principal legislation to more equitably distrib- The proposed cap would make it and interest on bonded indebtedness. ute the cost of paying for education, difficult for counties to budget for Nor would it apply to the amount of health care and other state priorities. road and bridge repairs or increasing property taxes raised by a political sub- Right now, he said, local governments health insurance costs, Meyer said. division’s real growth value, defined as rely too heavily on property taxes, paid Lynn Rex of the League of Ne- the increase in real property valuation disproportionately by farmers and braska Municipalities also testified in due to improvements — such as new ranchers, to fund those services. opposition, saying the 3 percent cap construction and additions to exist- Bud Synhorst, president of the is “not workable” for the state’s cities ing buildings — and the annexation Lincoln Independent Business Asso- and villages, approximately half of of property. ciation, also testified in support. He which already are near their levy limits. The governor testified in support said the 3 percent cap would make it “From a local government stand- of the proposal, saying the 3 percent easier for local businesses owners to point,” she said, “putting something cap is “reasonable” and that some local set their budgets and make Nebraska a in the constitution like this is highly governments and the state have lim- more attractive place to live and work. problematic because of the lack of ited their annual spending to around “If government spending continues flexibility.” that amount. to grow in this manner,” he said, “we The committee took no immediate In the past decade, Ricketts said, will lose our competitive advantage in action on LR22CA. n Nebraskans’ income has increased approximately 48 percent while infla- tion has increased by 18 percent and Committee vice chairpersons selected property taxes by around 52 percent. Agriculture .........................................................Sen. Tom Brandt “You can’t outstrip the ability of Appropriations ................................................ Sen. Anna Wishart Nebraska families to pay these taxes Banking, Commerce & Insurance ...............Sen. Brett Lindstrom by allowing property taxes to go up faster than inflation and faster than Business & Labor ...............................................Sen. Carol Blood their