LINCOLN – Governor Pete Ricketts called the 2021 state legislature session historic for tax breaks, tax breaks for retired veterans, truth in tax laws, broadband internet and other areas.
The governor says the state’s efforts to control spending will give Nebraskans $ 1.8 billion in tax breaks over the next two years.
Taxes on retirement income for military veterans have been abolished and tax cuts on social security income are being phased in.
The property values of Ag will be reduced from 75 percent of the market value to half of the market value.
Last week the legislature completed one of its most productive sessions in history. With nearly 700 bills pending for consideration, Senators and I have worked together successfully to control spending growth, provide tax breaks, invest in broadband infrastructure, and expand educational opportunities, among several other key priorities. Here are some of the highlights of a historic legislature that helped propel our state the Nebraska way.
Spend Control: The next two-year budget the Senators and I agreed to cap spending growth at 2.4%. The four biennial budgets I’ve worked on with the legislature have an average annual growth rate of less than 2.5%. Thanks to efforts to control government spending, we’ve provided Nebraskans with over $ 1.8 billion in tax breaks over the next two years. This is the largest tax break the legislature has given in at least a quarter of a century – and probably the largest sum in the history of the state of Nebraska. This corresponds to an average of 18.5% of the state budget, which will be used for tax breaks over the next two years.
Wealth tax relief: The wealth tax relief made up most of the relief at this meeting. Together, lawmakers and I have provided an estimated $ 1.7 billion in property tax relief over the next two years. This includes over $ 433 million per year through the new refundable income tax credit that went into effect in 2020. This is more than triple the $ 125 million in tax credits granted this year, the first year of the program. We also increased the fund for the relief of property tax and the financing for the exemption of homesteads.
And more tax breaks: In addition to the property tax break, the Senators and I have agreed on five other important measures. We eliminated taxes on military retirement income and introduced a tax exemption for 50% of Social Security income that will be rolled out gradually over time. The Senators also passed laws to lower the business tax rate in order to equalize tax rates for different types of job-creating workers. A new “Truth in Taxation” law now requires local governments to notify taxpayers if their property tax claims are expected to increase by more than 2%. Finally, property valuations will be reduced from 75% of market value to 50% of market value for purposes of real estate tax on bond issues. This will reduce the tax burden on farmers and ranchers.
Broadband infrastructure: The legislature has approved the Broadband Bridge Act, which was introduced at my request. This will invest US $ 20 million annually in grants to expand access to high-speed broadband for 30,000 households in Nebraska over the next two years. This improved connectivity will help more Nebraskans have the flexibility to work remotely, do their homework, and access telemedicine and e-commerce.
Expanded Educational Opportunities: During this session, Senators and I expanded educational opportunities for the next generation of Nebraskans. We have agreed to invest over $ 1 billion annually in state aid for K-12 schools. On my recommendation, lawmakers cut red tape to make it quicker and easier for licensed military spouses to get a teaching permit after moving to Nebraska. This budget creates new scholarships for private colleges and continues to fund scholarships for community colleges, state colleges, and the University of Nebraska to help students with high-paying jobs advance careers. The budget also tripled the size of the textbook loan program, allocating $ 3 million annually to support textbooks for private schools.
Other Key Achievements: Major legislative moves also took place on pro-life tax credits, protection of the Second Amendment, healthcare licensing, and take-away alcohol. A new tax credit for families who have a stillborn baby will help offset medical bills, funeral expenses, and costs of preparing for the baby’s arrival. Senators and I protected your Amendment 2 rights by clarifying the Firearms Transport Act and providing gun owners with better notifications and information on license renewals. At my request, the legislature has made it easier for hospitals and health care facilities to meet their staffing needs by ensuring accelerated reciprocity for many approved health professions. Finally, lawmakers put my popular take-away alcohol enforcement ordinance into law to ensure that take-away cocktails, beer, and wine will persist beyond the pandemic.
While the legislature has made significant progress on key priorities, there is still more work to be done on a number of key issues. The legislature still has to set limits to the growth of municipal property taxes. Local government property taxes in Nebraska have increased 4.3% annually over the past decade. That might not sound like a lot, but when you put it together over 10 years it’s a nearly 52% increase. In comparison, income has increased 48% over the past decade and inflation has only increased 18.7%. If the senators take no action, this pattern will continue.
In addition, the legislature will have to meet again later this year to complete the process of redistributing cards for congressional, legislative and other districts. The state of Nebraska has been waiting for the census data from the Biden-Harris administration for us to complete this work.
When we move into the summer, I will travel across the state to visit town halls and other community events face-to-face with you. I will be at Clay Center, Norfolk, Wahoo and Broken Bow for Town Halls for the next week, additional dates and times to be announced. If you have any questions about anything, please feel free to contact my office at email@example.com or 402-471-2244. We are happy to hear from them!