Nebraska Legislative Bulletin

January 16, 2008

Legislators Begin Choosing Priority Bills 

Nebraskans will soon be able to see what their state senators really want to get done this legislative session. Lawmakers on January 17 started choosing their priority bills. That designation gives proposed legislation a better chance of being debated by the full Legislature.

With 850 proposals from last session and 55 new bills ready to be introduced, Speaker of the Legislature, Sen. Mike Flood, is urging Legislators to sort through their priorities as quickly as possible. This is a short session, 60 days, and Sen. Flood is instructing Legislators they may each have one priority bill. In a departure from the past, priority bills will not be heard on a first-come basis. His criteria will be whether the bill is ready, the sponsor has worked with opponents and if the bill is crucial to the operations of state government.

New bills will be introduced for the first 10 legislative days, or until Jan. 23. The Legislature will begin general file and select file consideration of bills carried over from 2007 on January 14. Committee hearings on bills introduced this year are scheduled to begin January 22 and run through March 4. The session will last 60 legislative days and is tentatively scheduled to end April 17.

LB888 & LB887 Corporate Income Taxes 

Two bills from Sen. Carroll Burling of Kenesaw would lower the state's corporate income taxes. LB888 would raise the income cutoff between the lower and higher tax brackets for corporations from $50,000 to $200,000. LB887 would raise the income cutoff from $50,000 to $100,000, while reducing the tax rate for the higher bracket. Changing the cutoff alone would give proportionally larger tax cuts for small businesses. Changing both the cutoff and the tax rate for the higher bracket would spread the tax cuts to larger businesses.

(Source: Omaha World-Herald)

LB784 Violation of Immigration Laws Prohibits Tax Breaks 

Nebraska employers who violate immigration laws wouldn’t be able to take advantage of a state business incentive package, under a bill in the Legislature. Employers who knowingly hire illegal immigrants couldn’t receive benefits under the Nebraska Advantage Act for five years. Senator Gwen Howard of Omaha introduced the measure (LB784). If employers with violations applied for the tax breaks anyway and were approved, they could be forced to repay the money they saved.

(Source: AP & Omaha World-Herald reports)

Sales Tax Holiday Proposed

Rich Pahls of Omaha wants a three-day moratorium on the state sales tax during the first week of every August, a popular time for parents to buy school supplies. Similar legislative proposals have fallen flat before. But under Pahls's bill, stores would not have to participate in the holiday. And even if they did, they could choose which items to exempt from the sales tax.

Finally, while customers would not have to pay the tax on the items, businesses would still have to pay the tax to the state. That would address concern that a sales tax holiday could hurt state revenue. Sen. Bill Avery of Lincoln also wants a sales tax holiday. Avery’s bill would put different limitations on the holiday, including only applying to school-related purchases. Businesses, however, would not have to pay the state for taxes that weren’t charged to customers. About 15 states have sales tax holidays, including Missouri and Iowa.

(Source: AP)

Case for Recession is Wrong

For years as the economy has boomed, the permabears have said recession is just around the corner. They have been wrong. Now there's a little bit of evidence of an economic slowdown, and those same bears are declaring victory ­ they're saying the recession is right here, right now.

We shouldn't be too surprised at a bit of a slowdown here. After all, despite the housing downturn, 2007 was a high-growth year by and large. It wouldn't be out of pattern to have to give back a little for a couple quarters just in the normal cycle of things.

Moreover, with six months of relentlessly negative sentiment about housing, subprime lending and the credit crisis, it wouldn't be too surprising to see consumers and businesses acting a bit cautious for a short while.

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