School retirement, tax incentive reductions pass, narrow Nebraska deficit by $136 million
LINCOLN — Lawmakers gave wide final approval Wednesday to two measures designed to shrink the state's looming budget deficit by $136 million.
The two bills are Legislative Bill 650, from State Sen. Brad von Gillern of the Elkhorn area, related to trimming business incentives, and LB 645, from State Sen. Beau Ballard of Lincoln, related to scaling back school retirement contributions based on how well funded the pension plan is.
LB 650 passed 40-7. LB 645 passed 45-2.
LB 650 from von Gillern, who chairs the Legislature's Revenue Committee, would reduce or defund various tax incentives with savings this biennium, including:
Buyer-based exemption for construction contractors to purchase materials tax-free if appointed to do so by a client ($12.9 million).
Credit for retailers collecting sales taxes (reduced, $11.7 million savings).
Renewable Chemical Production Tax Credit Act for local businesses producing renewable chemicals (defunded after 2025, $8.5 million savings).
Nebraska Relocation Incentive Act offering tax incentives for relocation expenses (reduced, $8 million savings).
Nebraska Advantage Rural Development Act for individuals or companies that increase economic activities intended to benefit rural Nebraska (reduced, $6.8 million savings).
Nebraska Biodiesel Tax Credit Act for retail dealers who sell and dispense biodiesel at a taxpayer's retail gas station (reduced, $1 million savings).
Creating High Impact Economic Futures (CHIEF) Act for charitable contributions to community assistance or services helping to alleviate areas of chronic economic distress (defunded after 2025, $900,000 savings).
Nebraska Shortline Rail Modernization Act to offset railroad infrastructure maintenance and capital improvements for Class III railroads (reduced, $500,000 savings).
Food donation income tax credit for grocery stores, restaurants or agricultural producers that donate food to a food bank, food pantry or food rescue (defunded after 2025, $500,000 savings).
Cast and Crew Nebraska Act for qualifying film companies, productions and actors (defunded after 2025, $500,000 savings).
Reverse Osmosis System Tax Credit Act for the one-time installation of a reverse osmosis system at a taxpayer's primary residence (reduced, $250,000 savings).
Urban Redevelopment Act designed to grow small businesses and generate investment in Nebraska's urban cores (defunded after 2025, $101,000 savings).
LB 645 from Ballard, who chairs the Legislature's Nebraska Retirement Systems Committee, would reduce annual contributions to the state's school retirement pension plan — for all employees outside Omaha Public Schools, who have a separate retirement plan — depending on the actuarial funding level of the pension plan. The school plan is currently 99.91% funded.
The state currently gives 2% of statewide payroll for employees covered under the plan. School employees contribute 9.78% of their monthly payroll, while school districts match that at 9.88% of the eligible employees in their district.
Under the amended LB 645, contribution rates would change each July 1 for all three groups depending on whether the plan is:
Less than 96% funded (employees 9.75%, employers 9.85%, state 2%).
Between 96% and 98% funded (employees 8.75%, employers 8.84%, state 0.7%).
Between 98% and 100% funded (employees 8%, employers 8.08%, state 0.7%).
100% funded or more (employees 7.25%, employers 7.32%, state 0%).
Multiple senators said the tiered system could offer a 'cushion' in hard economic times.
Teachers and other school employees could see an immediate take-home pay increase, and school districts could have a property tax reduction. However, if the plan's funding level falls, closing the gap would fall back to the state, employees and school districts.
Ballard, at the urging of State Sen. Danielle Conrad of Lincoln, earlier this week put in language to LB 645 protecting the state's continued contributions of 2% of payroll for Omaha Public Schools employees to the separate district retirement plan each year. That amendment also said it isn't the Legislature's intent to pick up 'any financial responsibility or liability' for the OPS pension, which the state now manages.
With the passage of LB 650 and LB 645, and with Gov. Jim Pillen's expected support — he included both measures in his January budget proposal — the state's projected budget deficit would fall by $136 million. The state also would save $187.24 million in the following two-year budget cycle, based on current projections.
Lawmakers still would need to find $259.4 million over the next two weeks to balance the budget and meet a statutorily required reserve limit, according to estimates from the Legislative Fiscal Office.
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
Texas Democrats say they will return to state once session ends, California unveils retaliatory map
Texas House Democrats who left the state in protest of proposed congressional redistricting said Thursday they will return to the state after the Legislature adjourns Friday and California's state lawmakers introduce a retaliatory redistricting map in their state assembly. In a statement, members of the minority party said their lawyers had advised them to return 'to build a strong public legislative record for the upcoming legal battle' against the proposed reconfiguration of Texas' congressional districts. The new map, stalled since dozens of Democrats left the state Aug. 3, is designed to net the GOP five additional seats in the U.S. House. President Donald Trump pressured state leaders to undertake the effort mid-decade — a rarity — as the GOP tries to hold onto its thin majority in Congress. Gov. Greg Abbott, who has asked the state's Supreme Court to remove House Democratic Caucus leader Gene Wu from office, said earlier this week he would continue calling special legislative sessions — starting Friday after both chambers of the Legislature adjourn. House Speaker Dustin Burrows said he would gavel out for the session if the lower chamber continued to lack a quorum, or the minimum number of present members required to conduct business. The House, which needs 100 of its 150 members present to establish a quorum, has not reached that threshold since most of the chamber's 62 Democrats left the state for Chicago, Massachusetts and New York in an effort to stop the proposed redistricting. Democratic lawmakers say the new map is an attack on the representation of minority voters in the districts being redrawn, while Republicans have defended their right to redraw district lines for partisan gain whenever they want. 'Texas House Democrats broke quorum and successfully mobilized the nation against Trump's assault on minority voting rights," Wu, D-Houston, said in a statement. 'Facing threats of arrest, lawfare, financial penalties, harassment, and bomb threats, we have stood firm in our fight against a proposed Jim Crow congressional district map.' California Gov. Gavin Newsom on Thursday called a special election for a ballot measure to ask voters to approve a new congressional map to counter Texas' effort. Earlier this week, Politico reported that California Democratic leaders said they had sufficient votes to pass the amendment. 'Trump's election rigging comes to an end now,' Newsom said in a social media post. 'California won't stand by and watch Trump burn it all down — we are calling a special election to redraw our Congressional maps and defend fair representation. This is a five alarm fire for Democracy.' Disclosure: Politico has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here. More all-star speakers confirmed for The Texas Tribune Festival, Nov. 13–15! This year's lineup just got even more exciting with the addition of State Rep. Caroline Fairly, R-Amarillo; former United States Attorney General Eric Holder; Abby Phillip, anchor of 'CNN NewsNight'; Aaron Reitz, 2026 Republican candidate for Texas Attorney General; and State Rep. James Talarico, D-Austin. Get your tickets today! TribFest 2025 is presented by JPMorganChase.
Los Angeles Times
3 hours ago
- Los Angeles Times
Texas Dems return to Capitol for Republicans' U.S. House map overhaul as California Democrats counter
AUSTIN, Texas — Texas Democrats said Monday that they were ending a two-week walkout that stalled Republican efforts to redraw congressional districts as part of a national partisan brawl over President Donald Trump's desire to reshape U.S. House maps to his advantage. Their return will allow the Republican-run Legislature to proceed as California Democrats advance a counter-effort to redraw their congressional boundaries in retaliation — a tit-for-tat that puts the nation's two most populous states at the center of an expanding fight over control of Congress ahead of the 2026 midterm elections. Dozens of Texas House Democrats left the state more than two weeks ago to deny their Republican-majority colleagues the attendance necessary to vote on redrawn maps intended to send five more Texas Republicans to Washington. They declared victory after Republicans adjourned that first special session, and Democrats around rallied in opposition to the Trump-led gerrymandering effort. They pointed specifically to California's release of proposed maps intended to increase Democrats' U.S. House advantage by five seats, effectively neutralizing any Republican gains in Texas. 'We killed the corrupt special session, withstood unprecedented surveillance and intimidation, and rallied Democrats nationwide to join this existential fight for fair representation — reshaping the entire 2026 landscape,' said Texas House of Representatives Minority Leader Gene Wu in a statement. Trump has pressured other Republican-run states to consider redistricting, while Democratic governors in multiple statehouses have indicated they would follow California's lead in response. Democratic California Gov. Gavin Newsom has said that his state will hold a Nov. 4 special referendum on the redrawn districts. The president wants to shore up Republicans' narrow House majority and avoid a repeat of the 2018 midterms during his first presidency, when Democrats regained House control and used their majority to stymie his agenda and twice impeach him. On a national level, the partisan makeup of existing district lines puts Democrats within three seats of a majority. Of the 435 total House seats, only several dozen districts are competitive. So even slight changes in a few states could affect which party wins control. Texas Gov. Greg Abbott jumped to the president's aid, adding redistricting to the agenda of an initial special session agenda that included a number of issues, but most notably a package of bills responding to devastating floods that killed more than 130 people last month. Abbott has blamed Democrats' absence for delaying action on those measures. Democrats have answered that Abbott's capitulation to Trump is responsible for the delay because he insisted on effectively linking the hyper-partisan matter to the nonpartisan flood relief. Redistricting typically occurs once at the beginning of each decade to coincide with the census. Many states, including Texas, give legislators the power to draw maps. California is among those that empower independent commissions with the task. The Texas House is scheduled to convene Monday at noon CDT. Barrow and Figueroa write for the Associated Press. Barrow reported from Atlanta.
Los Angeles Times
6 hours ago
- Los Angeles Times
Newsom fights fire with fire against Republicans and Trump
As Texas Republicans seek to redraw their congressional maps in favor of Republicans in the U.S. House of Representatives, Gov. Gavin Newsom has a power play of his own: redraw California's congressional districts to favor Democrats. With a new special election campaign, Newsom is proposing to temporarily scrap California's independently-drawn congressional lines in favor of districts that support Democrats. Could this political gerrymandering be the thing that saves democracy from Trump's increasingly authoritarian impulses? It's a boundary-pushing gamble that will undoubtedly supercharge Newsom's political star in the short-term, my colleague Julia Wick writes. But a ballot-box flop would be brutal for both the California governor and the Democrats. The 'Election Rigging Response Act,' as Newsom has named his ballot measure, would temporarily scrap the congressional districts enacted by the state's voter-approved independent redistricting commission. Under the proposal, Democrats could pick up five seats currently held by Republicans while bolstering vulnerable Democratic incumbent Reps. Adam Gray, Josh Harder, George Whitesides, Derek Tran and Dave Min, which would save the party millions of dollars in costly reelection fights. But first the Democratic-led state Legislature must vote to place the measure on the Nov. 4 ballot and then it must be approved by voters. If passed, the initiative would have a 'trigger,' meaning the redrawn map would not take effect unless Texas or another GOP-led state moved forward with its own gerrymandering effort. For Democrats like Rep. Laura Friedman (D-Glendale), who appeared alongside Newsom to kick off the special election campaign, there is 'some heartbreak' to temporarily shelving their commitment to independent redistricting. California voters have twice rallied for independent redistricting at the ballot box in the last two decades and many may struggle to abandon those beliefs. A POLITICO-Citrin Center-Possibility Lab poll found that voters prefer keeping an independent panel in place to draw district lines by a nearly two-to-one margin, and that independent redistricting is broadly popular in the state. Still, Friedman told the Times she was hearing overwhelmingly positive reactions to the proposal from all kinds of Democratic groups on the ground. 'The response that I get is, 'Finally, we're fighting. We have a way to fight back that's tangible.'' Newsom isn't using political gerrymandering as his only method of combating Trump and the Republicans. His digital team has resorted to trolling Trump on X, mimicking the president's own social media vernacular. Think petty insults and hyperbole with a heavy reliance on the 'caps lock' key. 'DONALD IS FINISHED — HE IS NO LONGER 'HOT.' FIRST THE HANDS (SO TINY) AND NOW ME — GAVIN C. NEWSOM — HAVE TAKEN AWAY HIS 'STEP,' ' one of the posts read last week. Newsom's actions are notably different from how he spent the first months of the new administration. In an attempt to reshape the California-vs.-Trump narrative, the governor hosted MAGA leaders on his podcast and contradicted the Democratic orthodoxy on the participation of transgender athletes in women's sports. But after the president sent California National Guard troops into Los Angeles amid immigration sweeps and ensuing protests in June, Newsom's MAGA conciliation ended. Now he's making a big gamble with his new special election campaign, the kind of big play that could redefine how voters across the country see him. Read the full story here. Today's great photo is from Times intern Annie Goodykoontz at a vigil honoring a man who died while fleeing an immigration raid at a SoCal Home Depot. Kevinisha Walker, multiplatform editorAndrew Campa, Sunday writerKarim Doumar, head of newslettersJim Rainey, staff writerDiamy Wang, homepage internIzzy Nunes, audience intern How can we make this newsletter more useful? Send comments to essentialcalifornia@ Check our top stories, topics and the latest articles on
