Contact: Adam Weinberg
Mobile: (402) 500-0209
Legislative Testimony for Feb. 7
Retirement Taxes, Property Tax Credits & Joint Agency Authority
LINCOLN, NE – The Platte Institute will testify on four legislative proposals before the Revenue Committee and the Government, Military and Veterans Affairs Committee today. Legislative Bills 153, 263 and Legislative Resolution 3CA (a constitutional amendment proposal) will be heard in the Revenue Committee in State Capitol room 1524 at 1:30 p.m. LB153 and LB263 are currently first and second on the agenda. LR3CA is currently fourth.
The Government Committee will hear Legislative Bill 412 in State Capitol room 1507 at 1:30 p.m. The bill is currently first on the agenda.
LB156 and LB263 are both proposals to expand Nebraska's state income tax exemption for military retirement pay. Platte Institute Policy Director Sarah Curry will testify in a neutral capacity on these bills.
Curry will highlight how military retirees, who usually retire from service at a working age, have to take the entire state tax and economic climate into account when making relocation choices, since they will still pay the full extent of income taxes on wage, business, or investment income, state and local sales taxes, and local property taxes.
"Maryland, home to the U.S. Naval Academy, exempted all military pensions from the state’s income tax despite a budget deficit in 2015. Connecticut, also facing a budget shortfall in 2015, increased taxes on businesses in order to exempt its income tax on military retirement," said Curry.
"Data collected from the U.S. Department of Veterans Affairs found that both Maryland and Connecticut lost some of their veteran population between 2015 when the exemptions were enacted and 2017," said Curry.
Update: Nicole Fox delivered testimony in opposition to LR3CA.
Curry will also testify in opposition to LR3CA, a constitutional amendment, which if approved by the Legislature and voters, would require the state to provide a refundable income tax credit for 35 percent of the property taxes paid in the state. Refundable income tax credits result in a payment back to taxpayers of any difference remaining once they are credited for their full income tax liability.
"Unfortunately, we can’t just pay people 35 percent of what they pay in property taxes without either making major cuts to the budget or enacting very large state tax increases," said Curry.
Curry will also discuss polling conducted by the Platte Institute in January that shows a majority of voters support additional limitations on local property taxing authority.
"There is nothing in this amendment that caps future costs. Any taxing political subdivision would be foolish not to levy the maximum property tax levy if they can get away with it, because 35 percent would be paid back to their voters by the state, no matter how high valuations go," said Curry.
LB412, introduced by Sen. Suzanne Geist, is a proposal to require voter approval in a primary or general election for the establishment of Joint Public Agencies (JPA) by political subdivisions with taxing or boding authority. JPAs are partnerships between local political subdivisions that allow the subdivisions to use each other's taxing or bonding authority to pay for various infrastructure or municipal projects.
"When two political subdivisions join to form a joint public agency, and only one has taxing or bonding authority, the political subdivision without such authority is able to use the taxing or bonding authority of the other," said Fox.
"At a time when many Nebraskans desire tax relief, LB412 gives voters a voice when it comes to local taxing authority," said Fox.
Curry and Fox’s testimonies are posted online at PlatteInstitute.org/Testimony.
To schedule an interview on these topics, please contact Adam Weinberg at (402) 500-0209 or firstname.lastname@example.org.
The Platte Institute advances policies that remove barriers to growth and opportunity in Nebraska. More media resources are available at PlatteInstitute.org/Media.