Tax Relief Proposal Clears First Round of Debate
With only days left in the session, our efforts on tax relief took a big step forward! In days prior, a plan had been formed by several key senators to take another run at a “grand bargain” tax relief bill through LB 873 as amended by AM 2649. On March 30, that package was advanced to Select File.
This bill and amendment create a floor under the refundable income tax credits created by LB 1107 two years ago, provide similar credits for property taxes paid to community colleges, decreases income taxes, and eliminate taxes on social security income.
Passing LB 873 as amended by AM 2649 will ensure that no less than $560 million will be allocated by the state for property tax relief into the future, and that number grows with increases in property valuations moving forward. Conservatively, coupling those credits and the new credits created by LB 873 towards community college property taxes, Nebraska’s property taxpayers are looking at $886 million in property tax savings. That is in addition to the significant savings we will see from the income tax reductions in LB 873.
When fully implemented, key elements of LB 873 include:
- An estimated $886 million for property tax relief.
- $681 million for property taxes paid to K-12 schools by putting a floor under the current refundable income tax credits created in 2020, and
- $205 million more in relief for property taxes paid to community colleges.
- Property tax savings in both areas will increase based on property valuation growth up to 5 percent annually to mirror average inflation.
- Tax savings for property taxes paid to community colleges will be phased in over five years and are estimated to grow from 20 percent to 60 percent of the property taxes paid.
- Reduction of income taxes over the next five years, by:
- Lowering the individual income tax rate from 6.84 percent to 5.84 percent, and
- Lowering the corporate income tax rate from 7.1 percent to 5.84 percent.
- Elimination of income taxes on social security income.
This reduction of property and income taxes is long overdue and must continue if Nebraska seeks to stay competitive in the fight to attract businesses and employees to our state. There are two rounds left to be voted on, so you still need to contact your senator and tell them to vote in favor of LB 873 as written.
NEFB Welcomes Supreme Court Decision to Hear Case Against California’s Prop 12
The U.S. Supreme Court has agreed to hear a case brought by the National Pork Producers Council and the American Farm Bureau Federation against California’s Proposition 12, which bans the sale of pork from hogs born to sows that weren’t raised according to the state’s “arbitrary” production standards.
“We are extremely pleased that the Supreme Court will consider the constitutionality of California’s Proposition 12. California’s desire to impose regulations targeting farming practices outside its borders is a direct attack on our nation’s livestock producers who dedicate their lives to ensuring the humane treatment of the animals they raise,” said Mark McHargue, president of Nebraska Farm Bureau.
In November 2018, California voters approved Proposition 12, a ballot measure that prohibits the sale of pork and eggs that is not produced according to the state’s production standards. Beginning Jan. 1, 2022, Proposition 12 was set to impose unscientific animal housing standards that reach outside of California’s borders to farms across the United States. However, the Sacramento County Superior Court ruled to delay enforcement of Proposition 12 for retailers in January. That delay was set to last for 180 days.
“This law is misguided and should not dictate farming practices for an entire nation. It’s important for agriculture to share with the court how Proposition 12 will restrict farmers’ efforts to provide a safe environment for their animals and how this law damages family farms and raises the price of pork and eggs across the country,” McHargue said.
The U.S. Supreme Court could hear oral arguments in the fall and could render a decision by the end of the year.
Sen. Fischer Introduces Cattle Market Reform Legislation
This week, Nebraska Farm Bureau President Mark McHargue thanked Senator Deb Fischer for introducing her cattle market reform legislation. “Nebraska Farm Bureau (NEFB) and the farm and ranch families we represent continue to thank Nebraska Senator Deb Fischer for her leadership in helping to provide needed reforms to Nebraska’s cattle industry. The complexities and controversies surrounding the way cattle are marketed within the United States cannot be understated. However, as with every issue she champions, Sen. Fischer remains steadfast in her commitment to do what’s right for farmers, ranchers, and all Nebraskans. NEFB remains committed to working with Senator Fischer to provide additional cattle market transparency and price discovery,” NEFB President Mark McHargue said.