Package of budget bills wins final approval
State Director Bob Hallstrom reports from Lincoln on the small-business agenda for the legislative week ending July 31
Legislative activity slowed to a crawl this week as lawmakers engaged in extensive debate on virtually every bill. While efforts to reach consensus on property tax relief and economic development incentives legislation continue, time is running short, with only seven days left in the legislative session.
Budget Bills Approved
Lawmakers gave final approval on Friday to the package of state budget bills. Earlier this week during Select File consideration of Legislative Bill 1108, a series of amendments were proposed to provide funding for individuals and families adversely impacted by the coronavirus. Other amendments would have reduced state spending by nearly $15 million, including the elimination of proposed funding for rural workforce housing. When the smoke had cleared, all amendments were rejected and the bill advanced as proposed by the Appropriations Committee.
In its final form, the budget provides for average annual spending growth of 3 percent and an estimated cash reserve of $382 million in the Cash Reserve Fund.
Decoupling Measure Heard
Members of the Revenue Committee received testimony during a public hearing on Monday on AM 3093 to Legislative Bill 1074 introduced by Sen. Tom Briese (Albion), The proposed amendment would decouple the Nebraska Tax Code with respect to several tax benefits adopted under the Federal CARES Act.
Specifically, the proposed “decoupling” would impact state income taxes by:
- Removing the flexibility for small and pass–through business entities (e.g., LLC’s and Sub–S Corporations), which have incurred business losses in recent years to use those losses currently and create liquidity during the crisis
- Requiring retirees taking minimum distributions from their retirement plans to pay tax on distributions that are otherwise exempt under federal law
- Removing the increased charitable deduction limits for individuals and corporations, which were put in place by Congress to provide incentives for increased charitable giving to charitable organizations during the pandemic
- Removing the increased allowance of business net operating losses.
The tax cuts adopted under the CARES Act were designed to provide cash flow and liquidity to individuals and businesses adversely impacted by the pandemic. This boost to the economy will provide a lifeline to individuals and businesses struggling to survive the economic crisis created by COVID–19.
Decoupling from the tax benefits associated with the CARES Act and imposing additional taxes on individuals and businesses will undermine the recovery of our economy by adversely impacting the ability of Nebraska to recover from the pandemic. With the economic challenges facing most Nebraska businesses, now is not the time to increase taxes to support more government spending.
NFIB joined other business organizations in expressing its opposition to the proposed amendment.
Previous Reports and News Releases
- February 21 Report—Bill on State’s Wage Payment and Collection Act Advances After NFIB-Backed Amendment is Adopted