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Taxes still top focus as Nebraska lawmakers resume session

July 19, 2020 GMT
The State Capitol stands in Lincoln, Neb., Friday, July 1, 2020. Nebraska lawmakers will resume their session on July 20, 2020, after a four-month pause triggered by the coronavirus pandemic. They still have major issues to address, including a property tax package and an upgrade of Nebraska's biggest tax incentive program, but all of that may be overshadowed by the pandemic's impact on tax revenue. (AP Photo/Nati Harnik)
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The State Capitol stands in Lincoln, Neb., Friday, July 1, 2020. Nebraska lawmakers will resume their session on July 20, 2020, after a four-month pause triggered by the coronavirus pandemic. They still have major issues to address, including a property tax package and an upgrade of Nebraska's biggest tax incentive program, but all of that may be overshadowed by the pandemic's impact on tax revenue. (AP Photo/Nati Harnik)
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The State Capitol stands in Lincoln, Neb., Friday, July 1, 2020. Nebraska lawmakers will resume their session on July 20, 2020, after a four-month pause triggered by the coronavirus pandemic. They still have major issues to address, including a property tax package and an upgrade of Nebraska's biggest tax incentive program, but all of that may be overshadowed by the pandemic's impact on tax revenue. (AP Photo/Nati Harnik)

OMAHA, Neb. (AP) — Nebraska lawmakers will return to their legislative session Monday for the first time in almost four months with most of the same challenges they faced back in March, plus new questions about how the coronavirus will squeeze the state budget.

Most lawmakers still want to lower property taxes and pass a new tax incentive program for businesses, although they acknowledge that one won’t pass without the other because neither measure has enough backing to advance by itself. Rural lawmakers are pushing for the property tax measure to ease pressure on farmers and ranchers, while the business incentives are mostly of interest to Omaha and Lincoln senators.

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“If we can get enough people to coalesce around a specific proposal, we’ll be fortunate,” said Speaker of the Legislature Jim Scheer. “If not, we’ll walk away empty-handed.”

Property taxes and the incentives bill are arguably the most high-profile issues senators will confront, along with the potential impact of the coronavirus on the state. Lawmakers are also expected to consider legislation to further clamp down on abortion rights and impose anti-bias training requirements for police. The training bill was on their radar before several high-profile police killings of Black citizens, but it’s likely to gain new significance in the wake of Black Lives Matter protests.

Lawmakers were forced to suspend their session on March 25 after passing an emergency coronavirus funding bill. It was the 43rd day of their 60-day session, and lawmakers are now bracing for long days and late nights until their new scheduled adjournment on Aug. 13.

“We only have 17 days left and we still have some heavy lifting to do,” said Sen. Mark Kolterman, of Seward.

The property tax measure would pump millions of state dollars into local school districts while putting new restrictions on how those districts can generate through local property taxes. The business incentives bill would replace the state’s current tax program for businesses, which is set to expire at the end of this year.

Sen. Lou Ann Linehan, chairwoman of the tax-focused Revenue Committee, said she’s concerned that lawmakers will end up gridlocked and little else will get done if they don’t address property taxes in this year’s session.

“Property taxes affect the vast majority of Nebraskans, and it’s a crisis in our rural communities,” she said.

The coronavirus triggered widespread layoffs and a surge in unemployment in Nebraska as in other parts of the country, but so far it appears the state’s tax collections aren’t as dire as initially feared.

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Lawmakers will get a better idea of how much money they’ll have available on Thursday, when the Nebraska Economic Forecasting Advisory Board meets to set new tax revenue projections.

“I’m cautiously optimistic from a revenue standpoint that we’ll be in a workable situation,” said Sen. John Stinner, chairman of the budget-writing Appropriations Committee.

But one tax-policy think tank warned that the situation could change quickly.

“Given the tremendous uncertainty about the pandemic’s impact on our state and its economy, legislators should be cautious about passing new measures that increase the state’s spending obligations,” unless it’s related to the pandemic, said Renee Fry, executive director of the OpenSky Policy Institute.

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