There’s no argument to be had:
Our property taxes are bad.
But what to do next
Has everyone vexed.
Each answer makes somebody mad.—Mike Holmes, Retired Statehouse Reporter.
Nebraska business advocates saw some wishes granted and others skipped by the 2024 Nebraska Legislature. Out of 17 proposals supported by local and state Chambers of Commerce, six won approval from the state’s 49 senators.
Business advocates say the state’s political leaders avoided public policy pitfalls—rejecting two proposals that the business groups opposed—and took positive steps in child care, attracting new workers and creating future sites for innovative new businesses.
The other 11 ideas?
Many will be back again next year as part of the long-range goal of making Nebraska an economic beacon for businesses and those who start and run them.
“Clearly, we have to bring people to the state and keep people in the state,” said Bryan Slone, president of the Nebraska Chamber of Commerce and Industry. “We’re trying to attract and support great companies and great jobs and technology and great people. That’s the key to our future.”
The Legislature, which met for 60 of the days between Jan. 3 and April 18, did its job, said Jennifer Creager, lobbyist for the Greater Omaha Chamber of Commerce. “Business is about getting things done and compromising, sending an important message to the state and the business community that they can rely on their elected officials to solve the problems at the end of the day.”
She’s not discouraged that many proposals failed. Taxation and other complex issues took up much of the time in this year’s session, leaving many proposals until the last minute.
“It’s a mad rush to the end,” Creager said. “On the one hand, that’s not the best way to make policy. But on the other hand, that’s just a reflection that things won’t move politically until there is that time pressure and the need to accomplish something. I think the senators take their responsibilities very seriously.”
The biggest proposal that didn’t pass: Gov. Jim Pillen’s effort to reduce local property taxes by limiting local government spending, raising the state sales tax rate and eliminating some sales tax exemptions.
The governor told the senators that property taxes are out of control and hurt farmers, ranchers, homeowners, and businesses—“every Nebraskan in every part of our state.”
Chambers of Commerces in Lincoln, Kearney, Grand Island, and Washington County joined the Omaha and State Chambers in opposing the plan, along with some other business groups. Senators trimmed back the proposal during debate, but in the end it failed when the session expired without a vote, opening the way for a special session of the Legislature to deal with taxes.
“Everybody in this state would like to reduce property taxes,” Slone said. “The only question is, are we going to do it by creating economic growth, or are we going to have other taxpayers pay for it?
“You don’t create a perfect tax system in one year. We need to make our tax system very competitive with other states for people to want to work here, to bring in great companies and to continue to grow the great companies that we have in the state and create opportunities. We’ve all got to be focused on that.”
The Chambers especially disagreed with a plan to start taxing advertising on large internet platforms, which Slone said would create a cost disadvantage for Nebraska businesses. A similar law in Maryland is in limbo, blocked by lawsuits alleging that it’s discriminatory to tax some businesses but not others.
Aside from the tax issues, contained in Pillen’s Legislative Bill 388, business groups said these new laws, which started as “LBs,” can benefit the state’s businesses and the people who work here.
Child care
LB 856 makes child care workers eligible for a federal program to pay for child care for their own children. The Legislature passed the measure to enact the program but deleted $10 million to fund it.
Creager said the program is aimed at attracting more child care workers by covering their own child care costs while they care for others’ children. The shortage of child care workers affects all working parents.
“I had two kids in child care, so I get it,” she said. “If the care center calls in the morning and says they can only take 10 kids instead of 14 and could four of you stay home, that’s a very difficult thing to deal with. You need a stable child care environment.”
Losing the $10 million will lessen the law’s impact, Slone said, but at least the program can start. “We’ll definitely want to continue with the funding. We’ll be talking child care for the next five years.”
The senators also enacted LB 874 to simplify child care licensing.
Work force
LB 1023, the Relocation Incentive Act, minimizes “double taxation” of people, especially remote workers, who earn income in more than one state. Nebraska is one of few states that still has such double taxes, along with Connecticut, Delaware, New York, and Pennsylvania.
The State Chamber said the idea is to help businesses compete for those workers, given that Nebraska usually has between 50,000 and 80,000 job openings. The law has other provisions, such as deductions for expenses for people who move to the state.
The law also will speed businesses tax deductions for investments in equipment, research, and development.
LB 937 provides a series of tax credits, including for those who care for elderly or disabled family members and those who serve, support, and hire people with developmental disabilities, and for making movies in Nebraska.
Industrial sites
LB 644 originally proposed spending $160 million to develop industrial “mega-sites”—500 acres or larger. As passed, the law sets aside $500,000 to study site locations, demand, and funding for such sites, with the idea of bringing a spending proposal in 2025. The study will make sure the sites are properly carried out, Slone said.
LB 164 moves ahead a plan to develop an inland port authority—an industrial development park controlled by an independent government board—in a north Omaha area close to Eppley Airfield. The port authority can sell bonds, acquire property, and market the area for economic development.
“The inland port authority is an opportunity to develop a large site in an area of the city where that’s been a challenge in the past,” Creager said. “Developing a site is always a precursor to employment opportunity.”
The inland port proposal has drawn criticism from people living in the area because the authority can buy privately owned land. In response, the senators added a requirement for public hearings and a citizen advisory committee to take public opinion into account.
Aside from enacting those six laws, the Legislature handled other business-related issues. The senators turned down a Pillen proposal for a series of changes in the state’s incentives for businesses that invest in Nebraska and create new jobs.
Creager said the current complex system of incentives was revised in 2020 after an extensive review that involved many business and government groups. That revision was supposed to have a 10-year “shelf life.”
She said it’s reasonable for a new governor—Pillen took office in 2023—to have his own ideas.
“We may see him wanting to continue working in this space next year or for several years. It would help to involve some of those economic development professionals and experts if we do look at the program as a whole next session. We’d like to be part of that conversation.”
On another issue, as part of its tax plan the governor’s office had proposed using $70 million from the state’s unemployment trust fund for property tax relief. Employers had paid in the money voluntarily to backstop federal unemployment benefits in case of an economic downturn.
The Omaha, Lincoln, and State Chambers opposed the transfer, saying the state shouldn’t use that money for non-unemployment purposes. In a compromise, the Legislature sent $30 million toward property tax relief and $40 million to a new workforce development cash fund at the State Department of Labor. Employers were given a five-year break from paying into the fund.
The Legislature didn’t directly address another of the Chamber priorities: the state’s housing shortage, which discourages some people from coming to Nebraska or staying in the state. One proposal, LB 1166, would have required zoning rules so people could add “auxiliary” houses to their existing property. The measure died in the Urban Affairs Committee.
Housing has been a long-standing problem in rural areas where there are fewer builders and higher costs. Creager said the housing shortage is becoming more critical in Omaha and Lincoln, too.
“It’s a perpetual issue, for sure,” she said.
Overall, Creager and Sloan said, business interests’ long-term “bread and butter” goals remain.
Among them:
—Attracting and retaining people between 18 and 34.
—Encouraging entrepreneurs, innovation, research and development.
—Balancing growth among important business and industry sectors.
—Establishing a competitive tax system.
—Protecting pro-business laws and policies.
Tackling those issues means advocating for business with the state’s policymakers, Creager said.
“Some of it is an internal assessment of how we want to go forward next year or the next five years or the next 10 years,” she said. “There’s also an assessment of the external climate coming from other senators, what’s coming from other organizations, what’s coming from the administration, and then determining how to partner with them or respond to the bills and policies in a way that best represents our membership.”
In a statement on public policy, the State Chamber says Nebraska must “transcend politics and geography to accelerate our state…We must continue to keep our foot on the gas.”
For more information, visit nebraskalegislature.gov.
This article originally appeared in the June/July 2024 issue of B2B Magazine. To receive the magazine, click here to subscribe.
