Income Tax Relief Advances, Property Tax Relief Debate Begins

Full day debate kicked off this week at the state Capitol as well as the first of many late-night sessions taking place. By a vote of 41-0, the Legislature advanced LB754 (Linehan) to Select File which is the income tax reduction package brought at the request of the governor. This was a major step as it is the first portion of the governor’s tax relief plan. 

The income tax package includes several provisions, but two points would have a positive impact on rural Nebraskans. Firstly, the income tax rate would be reduced from 5.84 percent down to 3.99 percent. This affects farmers and ranchers as we pay income tax like everyone, but it also keeps Nebraska competitive with neighboring states. The package also provides tax credits to assist childcare efforts throughout the entire state. Parents of children in childcare, childcare providers, childcare workers, and businesses who provide childcare benefits, all receive tax credits in this bill. With the severe shortage of options in rural Nebraska, this portion of the bill helps incent investment in daycare services.

Following the advancement of the income tax package, the Legislature turned its attention to two more bills important to Farm Bureau. The first is LB683, a broadband package from the Transportation and Telecommunications Committee, that creates a new Nebraska Broadband Office, which NEFB supports. We are encouraged by the increased importance the governor has placed on getting broadband to every home and business in Nebraska. In years past, there were some areas where the state failed to act on broadband that could have been handled better if we had a full-time coordinator with staff dedicated to broadband. That bill is expected to be voted on tomorrow. Senators advanced LB683 to Select File with a vote of 43-2.

After broadband, debate began on LB243 (Briese). This is the property tax package that was passed out of the revenue committee last week and a policy priority for Nebraska Farm Bureau. It is the second part of the governor’s tax relief plan. Below is a summary of the five bills put together for this package. 

  • LB589 (Sen. Briese) – Places a cap on school district revenue growth. Allows for schools with an average of 3% or more student growth over three years to use 70% of that growth toward their allowance over the cap. A school district may exceed its property tax authority, with a 75% majority vote of the school board. Additionally, a district may exceed their property tax request authority by any amount with a 60% vote of the people. The cap would not apply to property tax revenues required to pay bonded indebtedness. This requires all special education funding to be inside the school funding formula and subject to the cap.
  • LB242 (Sen. Briese) – Changes Nebraska Property Tax Incentive Act (aka LB1107 credits) by eliminating the 5% cap on the allowable growth percentage for the total assessed value growth of all real property in the state from the prior year.
  • LB243 (Prioritized by Sen. Briese), changes the minimum amount of relief granted under the Property Tax Credit Act, currently funded at $315 million. Raises the statutory minimum to the following:
    • $388 million in 2024,
    • $428 million in 2025,
    • $468 million in 2026,
    • $488 million in 2027,
    • $515 million in 2028, and
    • $560 million in 2029.
  • In years thereafter, the fund will grow by the allowable growth rate.
  • LB783 (Sen. Murman) – Eliminates the property tax general fund levy authority of community colleges.
  • LB309 (Sen. Bostar) – Changes interest rate from 9% to 14% when tax refunds or claims are owed by taxing entities to taxpayers.
  • • LB28 (Sen. Erdman) – Requires valuation of property with an appeal to the TERC that has not been decided when the first half of taxes become delinquent to revert to the value of the property during the year prior to the appealed year.

We expect a full eight hours of debate on this as there is a lot to go through. Rest assured we will be there helping senators along the way.

Congress Votes to Repeal New WOTUS Rule, Veto Expected

This week, the Senate passed a resolution to overturn President Biden’s latest version of the “Waters of the United States” (WOTUS) rule. The resolution, which passed under the Congressional Review Act which allows Congress to overturn federal agency actions using only a majority vote, passed 53-43. Four Democrats and one Independent joined Senate Republicans in supporting the resolutions including Joe Manchin (D-WV), Catherine Cortez Masto (D-NV), Jacky Rosen (D-NV), John Tester (D-MT), and Kyrsten Sinema (D-AZ). The House passed their version of the legislation earlier this month with a 227-198 vote. All five members of Nebraska’s Congressional Delegation supported the measure when it came up for a vote. Unfortunately, President Biden, who must sign the legislation before the rule is overturned, has already pledged a veto. While the resolution passed both the House and Senate with bipartisan support, neither garnered the two-thirds needed (290 in the House and 67 in the Senate) to override the veto. The votes on the Congressional Review Act resolution, come as the U.S. Supreme Court is set to rule on Sackett v. EPA which could have a substantial impact on how far the Biden EPA can go with its new WOTUS regulation.

To view the comments from Nebraska’s Congressional Delegation on the WOTUS rule, please click the following links:

Sen. Deb Fischer:

Sen. Pete Ricketts:

Congressman Mike Flood (NE-1):

Congressman Don Bacon (NE-2):

Congressman Adrian Smith (NE-3):

House Passes H.R. 1

The House passed H.R. 1, the Lower Energy Costs Act. The legislation attempts to rectify high energy costs by increasing the production of American energy and reducing regulatory burdens through comprehensive permitting reform. The American Farm Bureau Federation (AFBF) offered their support for the legislation as Farm Bureau policy supports removing any and all barriers to domestic energy production including more drilling and extraction of our energy resources. The utilization of domestic fuels, including biofuels, has reduced our country’s dependence on foreign crude oil, increased farm incomes and provided good-paying jobs in rural America. To view AFBF’s letter of support for the bill, please click here. (link to letter)

New H2-A Wage Rate Calculations Will Hurt Farmers

The new methodology for calculating the Adverse Effect Wage Rate, which takes effect this week, will take a toll on farms that rely on H-2A workers, particularly small farms. American Farm Bureau Federation economists analyzed the new AEWR in their latest Market Intel report. Among concerns with the new methodology is how worker responsibilities are determined. For example, a worker who spends most of the day in the field, but also drives fellow workers to the farm will be required to be paid as a chauffeur. In the state of New York, that represents a 30% increased wage rate. According to the Market Intel, “applying the above changes to the sample farms would have a significant impact on the wage outlays of each farm, but particularly the small farm. Across a national average, on the small farm the new methodology would have increased wage outlays by 15.1%, 13.6%, 12.8%, 12.7% and 12% in 2018, 2019, 2020 and 2021, respectively, and an estimated 12.6% in 2023.” The new rule will also make the H-2A program even more difficult to administer by introducing two dates for wage increases throughout the year instead of the current single date. “We are disappointed in DOL’s final rule on the AEWR methodology,” said AFBF President Zippy Duvall. “This administration says it wants to help family farms, but its agency largely ignored industry input in favor of a new calculus that will hurt small farms the most. Labor already accounts for almost 40% of total production costs on some farms, and the final rule will certainly continue to raise costs for farm families. Congressional action is the only way to deliver needed certainty and fairness to the farm economy.” Lawmakers recognize the negative impact the new AEWR methodology will have on America’s farms. Nearly 600 farm organizations and agribusinesses, including AFBF and the Nebraska Farm Bureau Federation, have urged Congress to support a resolution of disapproval under the Congressional Review Act. It is expected to be introduced in the coming weeks. In the Senate, the bipartisan Farm Operations Support Act (S.874) would temporarily reset the AEWR at 2022 levels. To view AFBF’s full report on the new regulations, please click here.  To see the aforementioned letter, please click here.

Survey Shows Strong Public Support for Farm Bill Passage

Almost three-quarters of Americans say that not reauthorizing the farm bill in 2023 would have a significant impact on the country, according to a new poll from the American Farm Bureau Federation.

The survey explores the public’s awareness of the farm bill, its impact, and priorities for funding in the legislation. The poll, conducted by Morning Consult, showed more than half of respondents said they would be more likely to support their member of Congress if they voted to reauthorize the farm bill.

Nearly 70 percent of respondents also identified two areas of the farm bill as top priorities for government funding: risk management programs that serve as a safety net for farmers and nutrition programs that serve as a safety net for families facing hunger.

“Thanks to the farm bill, farmers and ranchers can hold on through the tough times to keep the nation’s food supply secure,” said AFBF President Zippy Duvall. “Farmers and ranchers must take the lead to share with our neighbors and lawmakers about the impact the farm bill has on every family in America. Almost nine in ten adults trust farmers, which will be important as we work to inform the 260 lawmakers who weren’t in Congress when the last farm bill was written.”

After witnessing the food system impacts of Russia’s war with Ukraine, an overwhelming majority of Americans also believe the U.S. should consider a safe and abundant food supply a matter of national security. This suggests the farm bill should be considered a part of the country’s national security strategy.

Key findings of the survey include:

  • 73% of adults say not passing a farm bill would have a significant impact on the country;
  • A majority of adults agree that nutrition programs (68%) and risk management (67%) should be top priorities for government funding in the farm bill;
  • 86% of adults say they are concerned about food inflation;
  • 84% of adults say the U.S. should consider a safe and abundant food supply a matter of national security; and
  • 89% of adults trust farmers.

Read the full results of the survey here.

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