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Business tax incentives showdown looms as Legislature winds down

May 24, 2019

One more showdown.

With the 2019 Legislature’s days dwindling down to a precious few, senators appeared on course toward one final major confrontation with an element of payback hanging in the air.

A much-amended proposal to enact a comprehensive new business tax incentives program is on the agenda on Friday, following close on the heels of Wednesday’s defeat of the last major property tax relief proposal left standing after 80 legislative days in session.

Some rural senators had made it clear that the fate of one was tied to the other before Albion Sen. Tom Briese’s effort to provide $112 million in additional property tax relief fell 10 votes short of the 33 required to end a filibuster and immediately vanished from the agenda.

On Friday, the tax incentives package (LB720) will need 33 votes of its own to avoid a similar fate.

Sen. Mark Kolterman of Seward, sponsor of the proposal, said Thursday he believes it can clear that barrier, but he’s also prepared yet another amendment to the bill to secure support after a series of changes that were designed to meet legislative objections and concerns.

One of the remaining concerns expressed during floor debate was a need to provide a cap on the total tax incentives that are granted to businesses that locate or expand in Nebraska.

Briese made his intentions clear immediately after his proposal (LB183) disappeared on Wednesday night when he said he’d “find it very problematic to support corporate giveaways after turning our backs on working Nebraskans,” namely farmers and homeowners.

Sen. Curt Friesen of Henderson echoed that sentiment on Thursday.

“In all my years here, we’ve been trying to find out how do we provide property tax relief,” he said. “That’s the biggest challenge.

“The governor says we can’t raise taxes,” Friesen said, and that shuts off the new revenue needed to fund property tax relief.

“So, the only avenue is growth,” he said. “And if we give that money away in tax incentives, there is no growth.”

Kolterman said he believes he can hold the necessary 33 votes together.

“We’re gonna make it, but it’s going to be very close,” he said. “I think we get it done.”

Kolterman said supporters of the proposal “really have listened to both sides of the aisle” in making a series of adjustments to the bill.

And, he noted, he was there with rural senators voting in support of Briese’s bill and an earlier Revenue Committee package.

“You work with each other,” he said. “They can’t blame me. I voted with them all the way.”

Kolterman said he “purposely held back (action on his tax incentive bill) to give agriculture an opportunity” to achieve property tax relief first through the tax reform proposal authored by the Revenue Committee.

Before Briese offered his proposal to fund additional property tax relief with revenue raised by eliminating two dozen sales tax exemptions, a comprehensive committee proposal to fund substantial property tax reduction with $372 million in new revenue was trapped at the first stage of floor consideration by a filibuster and disappeared from the agenda.

Briese’s own plan ultimately fell 10 votes short of breaking through a filibuster at the second round of floor debate.

The business tax incentive bill advanced from first-stage consideration on a 29-5 vote with 15 senators declining to vote on the measure. Not voting were nine urban senators and six rural lawmakers.

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