The Nebraska Legislature's Revenue Committee is continuing “critical” efforts to provide tax relief, despite a pause in the legislative session because of the COVID-19 pandemic.
The committee continues to stay in contact via email and phone calls in order to provide much-needed tax relief to Nebraskans, committee Chair Lou Ann Linehan told Tax Notes. She said it is important that the group continue to work to get tax relief bills passed when the legislative session resumes.
“An economic crisis and people having trouble making their payments, in my opinion, makes it even more critical that we look at tax relief,” Linehan said. She said it's unclear how much can get done this year, but said the committee is trying to make significant progress on particular bills.
Stating that Nebraska has high income, property, business, and corporate taxes, Linehan said she is fearful of losing people to other states if nothing is done to provide tax relief.
There is a lot of economic uncertainty right now as a result of the pandemic, Linehan said, adding that while the stimulus provisions under the federal Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) are substantial, she's still unsure if they would be enough. She said the Nebraska Revenue Forecasting Board is set to meet in April to discuss the pandemic's revenue impact, noting that the group is composed of bankers and business people from all over the state who “have their hand on the pulse of the economy.”
According to Linehan, L.B. 1106 and L.B. 720 are two of the most important bills the committee is working to get passed.
L.B. 1106 would increase state funding for public schools by $520 million, designed to reduce a school district’s reliance on property taxes. The bill would also look to state income and sales tax revenue for funding instead of local property taxes.
An amendment to L.B. 1106 filed by Linehan would set the basic allowable school fiscal year budget growth rate at 2 percent and make transition aid available to qualifying schools for three years to facilitate a shift away from property tax reliance, according to a March 25 release.
Meanwhile, under L.B. 720, qualified businesses would be eligible for some incentives based on their capital investment level and number of employees. The bill would also simplify the tax credit qualification process.
“The new business incentive package that is on the floor now is a much better package than what we currently have,” Linehan said. “I would much rather see us pass a new incentive package than stick with the one that we all know has flaws.”
Linehan said she expects the session will resume sometime in June, but it will depend on the state of the pandemic.