Latest news with #LegislativeBill650
Yahoo
30-04-2025
- Business
- Yahoo
School retirement, tax incentive reductions pass, narrow Nebraska deficit by $136 million
State Sen. Brad von Gillern of Elkhorn, center, flanked by State Sens. Beau Ballard of Lincoln and Mike McDonnell of Omaha. Aug. 20, 2024. (Zach Wendling/Nebraska Examiner) 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
Yahoo
25-04-2025
- Business
- Yahoo
Bill targeting Nebraska business incentives advances with some shifts, after an intense exchange
State Sen. Brad von Gillern of the Elkhorn area is chair of the Legislature's Revenue Committee, which is targeting business incentives and proposing other program cuts to help address the state's projected budget deficit. July 29, 2024. (Zach Wendling/Nebraska Examiner) LINCOLN — A revised bill aimed at plugging Nebraska's budget gap by about $51 million, largely by clawing back several business incentives, sparked intense exchanges and nearly three hours of debate Thursday before it advanced another lawmaking step. Legislative Bill 650 is one way the Legislature's Revenue Committee proposes to help address the state's projected biennial budget shortfall, said committee chair State Sen. Brad von Gillern of the Elkhorn area, who introduced the bill. He told lawmakers that the committee used a 'last-in-first-out' approach in targeting initiatives previously approved by the Legislature and Gov. Jim Pillen. He said the package scales back or repeals incentives and programs the committee believed would have the least negative impact on a typical taxpayer. 'We opted to target business incentives and steer around consumer items as much as possible,' von Gillern said. 'In other words, these rollbacks are unlikely to hit the pocketbooks of most everyday Nebraskans.' State Sen. Bob Hallstrom of Syracuse challenged that assertion, however, in successfully seeking an amendment to save a newly passed law that eliminated a tax on providers that lease space on cell phone towers. Hallstrom argued that such a tax, which under LB 650 would have equated to about $4 million for the state over two years, likely would be passed on as a cost to cell phone users. 'It will send a chilling signal to providers considering where to invest next, and it will undercut our shared goal across party lines of expanding broadband access to every corner of Nebraska,' said Hallstrom. His amendment passed on a 30-10 vote. Two other successful amendments by von Gillern on Thursday in effect added more anticipated savings by further paring back an employer relocation incentive program and a rural development program, putting the latest total impact of LB 650 at about $51 million, he said. That's down from the $71 million von Gillern attached to the package earlier this month. He said that earlier projection was partly based on faulty timelines, as certain rollbacks can't begin in the middle of a fiscal year. The $51 million is also down from the $140 million worth of clawbacks and program revisions that Pillen sought in his original budget proposal, von Gillern noted. He said the package reflects a 'good compromise' made as the committee sought to respond to stakeholder groups yet address a budget shortfall. As of Thursday, the state's projected deficit over two years stands at $457 million, as the Legislature's Appropriation Committee works to whittle that to zero. Among programs scaled back or repealed by LB 650, and related estimated savings over two fiscal years, according to the Department of Revenue and an update by von Gillern: A credit to retailers for collecting sales tax ($11.7 million). Renewable Chemical Production Tax Credit Act ($8.5 million) Relocation Incentive Act ($8 million) Nebraska Advantage Rural Development Act ($7.3 million) Nebraska Biodiesel Tax Credit Act ($1 million) Creating High Impact Economic Futures, or the CHIEF Act ($900,000) Cast and Crew Nebraska Act ($500,000) Income tax credit for food donations ($500,000) Nebraska Shoreline Rail Modernization Act ($500,000) Reverse Osmosis System Tax Credit Act ($250,000) Urban Redevelopment Act ($101,000) Also included is a rollback of a buyer-based exemption ($12.9 million), which was championed two years ago by von Gillern. It allowed an organization's tax-exempt status to be used in certain circumstances by a purchasing agent for that group. LB 650 passed to its final round of debate with a 34-5 vote. State Sen. Danielle Conrad of Lincoln, who was among the five 'no' votes, reiterated criticism that the state is in a position of having to 'beg, borrow and steal' because of a 'self-created' budget deficit fueled by the Pillen administration-led 'inequitable, unsustainable tax cuts for the largest corporations and the wealthiest individuals.' But the most scorching moments of the debate came after State Sen. Bob Andersen of north-central Sarpy County called State Sen. Terrell McKinney of North Omaha to the microphone. He noted McKinney's repeated request to save millions of state dollars by canceling the planned construction of a new prison. Andersen suggested that some of the budget deficit could be resolved instead by redirecting the millions of dollars appropriated for a North Omaha area business park. McKinney told Andersen that it seemed as though he had 'a problem that North and South Omaha received dollars.' Andersen responded: 'Those are your words. … My perspective is, there's money that was allocated for COVID relief that is being used for economic development, and that's misappropriation of funds. That money should be brought back.' Andersen left the chamber as McKinney continued and requested that Andersen return to hear him out. He did not immediately return. 'Do you want to see communities like North and South Omaha impoverished for eternity? That's what it sounds like to me,' McKinney said. 'And you probably would be happy to see little Black kids poor for the rest of their lives; little Latino kids poor for the rest of their lives … making sure businesses that are owned by Black and Latino business owners are not as successful.' Andersen did not respond to a reporter who asked if he had further comment. Conrad, responding to the exchange during debate, said that federal COVID-19 relief funds were intended to address communities hit hardest during the pandemic. She said communities with high poverty and communities of color were hit 'particularly hard' and that there was legislative intent to ensure those federal dollars had a direct connection to those communities. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
12-04-2025
- Business
- Yahoo
Pillen-backed bill would help reduce state budget shortfall by $71M, aiming at business incentives
State Sen. Brad von Gillern of Omaha. (Zach Wendling/Nebraska Examiner) LINCOLN — A proposal that legislative supporters say would take a $71 million bite out of Nebraska's projected $289 million biennium budget gap — largely through clawing back several business-related incentives — cleared a hurdle on Friday. The amended Legislative Bill 650 is an effort by the Nebraska Legislature's Revenue Committee and supported by Gov. Jim Pillen to help create a required balanced budget. A nearly three-hour discussion ended in a 36-2 vote by lawmakers to advance the package to its second stage. State Sen. Brad von Gillern of Omaha, committee chair, said the proposal would save $71 million in projected state spending over the next two budget years by scaling back or eliminating several programs approved in recent years by the Legislature and Pillen. Von Gillern said the committee used a 'last-in-first-out' approach, targeting newer initiatives and considering input from an earlier public hearing. He characterized the package, which hits both rural and urban economic development, as largely a loss for programs designed to grow jobs and the economy. He said such moves were necessary in an era tighter than previous years when federal and pandemic related funds were more plentiful. 'We are talking about minimal impact to consumers,' he said. 'It's primarily a negative impact on businesses.' The bill is but one piece of a budget-making process set to continue over the remaining days of a 90-day session that wraps up in early June. State Sen. George Dungan of Lincoln, a member of the Revenue Committee, anticipates more contentious debate on other bills, such as expansion of sales and use taxes that he said could more specifically affect 'everyday working people.' Of LB 650, he said: 'All said and done, I do think it represents a good step forward with some proverbial low-hanging fruit in order to try to make up some of that budget deficit.' The package calls for scaling back incentives including: an income tax credit for food donations; credits to retailers for collecting sales tax; a tax credit for reverse osmosis water-related systems; employer tax credits for relocating new workers; and income tax credits for short-line railroad maintenance expenditures. It calls for cost-cutting changes to or repeal of the Urban Redevelopment Act, the Nebraska Advantage Rural Development Act, the Renewable Chemical Production Income Credit, Nebraska Biodiesel Tax Credit, and the Creating High Impact Economic Futures (CHIEF Act). Von Gillern said he didn't yet have a financial breakdown of anticipated savings attributable to each program. In addition, a handful of other bills would fold into LB 650, most of which von Gillern said are attempts to clarify or improve earlier laws. One of the five, LB 547 introduced by State Sen. Victor Rountree of Bellevue, at a projected cost of $288,000, would exempt disabled veterans from the state's motor vehicle tax. An exchange with State Sen. Margo Juarez of Omaha — who wanted to know how certain components would hit the pocketbook of an average consumer — sparked more explanation from von Gillern. He said the focus was on business-related and other incentives — saying less of them had been used than anticipated. Asked, for example, about the clawback of the biodiesel tax credit, von Gillern said it largely affects truck and agricultural users. Of the scaled back credits for retailers for collecting state sales tax, he said that would lead to as much as $2,000 a year additional loss for a retailer and was not aimed at consumers. State Sen. Terrell McKinney of Omaha cast one of the two 'no' votes on the amended package. He took particular offense to repealing the Urban Redevelopment Act, a tax credit intended to help grow small businesses and investment in urban cores, and paring back the CHIEF Act, a tax credit designed to encourage individuals and businesses to make charitable contributions that ease chronic economic distress. McKinney wanted to know more specifics on the projected savings, noting those two programs were just recently enacted. He said the information the committee chair distributed to lawmakers was not complete. 'Please explain to me … what is the increase in revenue that the state is getting? What is the savings?' He urged lawmakers instead to consider saving dollars by halting construction of a new prison, with costs expected to surpass $350 million, which he said would be overcrowded on Day One. State Sen. Danielle Conrad of Lincoln, who cast the other no vote, pointed out reduced tax credits for food bank donations and for the installation of a reverse osmosis water filtration system. 'So we're clawing back tax credits to help feed the hungry and the poor,' she said. 'And adjusting or changing the little bit of help we can provide to Nebraskans who have undrinkable water in their homes.' Conrad said the state is in the position of having to 'scramble' for dollars due to the 'self-created, reckless and irresponsible' actions of Pillen and the Legislature to promote income and corporate tax cuts that Conrad said benefitted the wealthiest Nebraskans and corporations. Von Gillern said the last-in-first-out approach aimed for an unbiased process. Committee discussions led to restoration of a few programs originally to be cut, such as the sales tax exemption for agricultural twine and a tax credit for pregnancy assistance organizations. State Sen Beau Ballard of Lincoln said the employee relocation tax credit he pushed over the finish line last year — now to be scaled back — addressed a state priority: luring new talent. Ballard said he was looking forward to working in the future with the Revenue Committee on a restoration. State Sen. Mike Moser of Columbus said he was encouraged by the committee's work, and noted that much is ahead in the budget-making process. 'This is just the beginning of the discussion,' he said. 'We've got a number of things we're going to have to do to make this all add up.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
