As the 2020 session begins, it’s important to remain clear-sighted about the most pressing priorities of Nebraskans. As special interests clamor for attention during this short legislative session, senators must keep laser-focused on the priorities that will grow our state as we enter a new decade. These priorities are property tax relief, flood aid, veterans’ tax relief, and workforce and business expansion.
First and foremost, Nebraskans need property tax relief. Everywhere I go around the state, farmers, ranchers and homeowners tell me story after story about how property taxes are overburdening their businesses and families. They’re fed up with heavy taxation and fired up to make sure senators deliver relief this year.
In 2019, senators and I delivered significant tax relief by increasing the property tax credit relief fund by over 20%. That fund has now nearly doubled during my time as governor, from $140 million to $275 million. That’s a step in the right direction, but Nebraskans urgently need additional relief.
With revenues having recently exceeded forecasts, legislators have a golden opportunity to deliver more tax relief in 2020. The only sustainable way to achieve long-term tax relief is by controlling spending. During my administration, we have controlled state government spending increases, on average, to about 2.4% annually. To achieve meaningful property tax relief, the local political subdivisions that levy property taxes—like public schools, community colleges and cities—must also do their part in showing fiscal restraint. I’ll share more about my plans for property tax relief this year in my State of the State address this week.
Second, we need to deliver flood aid for Nebraskans as we continue to rebuild following the 2019 floods. The combined recovery efforts of volunteers, local governments and state agencies have been extraordinary. Homes have been rebuilt, businesses have reopened and bridges have been reconstructed faster than expected. We’re on track to rebound even stronger than before the floods. Federal disaster assistance, federal highway funds and insurance are covering a large%age of the costs of recovery. The state, however, also has to do its share to fully repair our infrastructure.
Third, Nebraska needs to do more to retain our retired veterans. We are the only state in our region with a declining veterans population. This week, senators unanimously advanced LB 153, a proposal introduced at my request last year. This bill would exempt 50% of military retirement benefit income from state income taxation. LB 153 is a step to keep us competitive with other Midwestern states, most of which do not tax military retirement benefits at all. By helping to retain and recruit military retirees, LB 153 also strengthens our workforce. Since many military personnel can retire after 20 years of service, they often finish their military career in their 40s or 50s. At this age, they are still looking for ways to actively invest their wealth of skills and experience in a new job. Given our state’s need for talented workers, we cannot afford to have military retirees exit our state for a more favorable tax situation elsewhere.
Fourth, Nebraska needs to do more to expand job opportunities by attracting talented professionals and thriving businesses. The Legislature can help address our state’s workforce shortages by moving forward with two initiatives that are already on the table.
From Main Street businesses to Fortune 500 firms, we need to do more to prepare the next generation to take the great jobs we have here in our state, so they can make Nebraska their home. Last year, I proposed Nebraska Talent Scholarships as a way to encourage young Nebraskans to pursue careers in high-demand, great-paying professions. These annual scholarships would go to students at community colleges, state colleges and the University of Nebraska studying to enter fields that currently have a workforce shortage. The scholarships are a common-sense way to connect the rising generation of Nebraskans with rewarding jobs that our state’s employers are looking to fill.
And finally, business incentives, which are set to expire at the end of 2020, must also be addressed. Unlike other state incentive programs, Nebraska’s tax incentives are performance-based. Tax benefits aren’t given in the hopes of future investment. They’re only earned by businesses that have already made a significant and verifiable investment in our state. This feature ensures that incentives reward actual job creation in Nebraska. All 50 states have incentive programs, even states with no income tax like Florida and Texas. Senators should take action to refine and extend incentives, so Nebraska can remain competitive nationally.
Property tax relief, flood recovery, veterans tax relief and economic competitiveness are key priorities that deserve to be first in line as senators begin work this session. On Wednesday, I will outline these priorities and more during my annual State of the State Address. I invite you to view the speech, and stay updated on legislative developments, by visiting governor.nebraska.gov.