Nothing really grand about ‘Grand Compromise’
A three-subject bill (LB 1107) passed at the last minute by the 2020 Legislature has been called the Grand Compromise.
But, now that the ink has dried, it’s really hard to find anything “grand” about it.
The 150-page measure, introduced by Speaker of the Legislature Sen. Jim Scheer of Norfolk, contains: a new tax credit based on the amount of property taxes paid to a taxpayer’s school district; a new business tax incentive program; and a requirement to provide matching funds for a potential project at the University of Nebraska Medical Center.
The heavily amended version of the bill was presented to lawmakers 24 hours before they were to take a first-round vote. It was polished with all the “trust us” that the governor and the speaker could muster.
One has to think there was some skepticism because it took cloture motions (ceasing debate) to advance it from each round.
Still, lawmakers have talked every year for as long as I can remember about decreasing the property tax burden while providing adequate and equitable funding for the public schools.
What they avoided this year, as they always have, was meaningful reform of Nebraska’s tax system.
The bill, as passed, limits the total amount of property tax credits to $125 million this year. For the following three years, that amount could increase based on growth in the state’s net tax receipts and the level of its cash reserve.
The credit cap will increase to $375 million in 2024. For each year after that, the total amount of credits will be $375 million plus an allowable growth percentage equal to the growth in real property value, not to exceed 5% in any one year.
A new business tax incentive program, the ImagiNE Nebraska Act, was included in the measure to replace the Nebraska Advantage Act, which ends this year. Qualifying businesses will receive incentives based on their level of capital investment and the number of employees they hire at a minimum-qualifying wage.
An all-hazards disaster response facility at the University of Nebraska Medical Center in Omaha will receive $300 million in matching funds from the state if the project is selected for participation in a federal program and $1.3 billion in federal funds and private donations have been received. No funds will be transferred before fiscal
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