Session Concludes: Surprises, Farewells, and Challenges to Come

Well, it finally happened: Day 60, the final day of the 108th Legislature, came and went. In keeping with the tone of this year, it was not without some late-stage surprises. I had thought I’d review some of the many great bills that did pass this session, but there ended up being so much that seemed worthwhile to share with you about Day 60 and its implications; and I know the folks at CSN do a great job of tracking legislation of interest and sharing those updates with you.

So let’s get into it. Over the course of a longer-than-usual Sine Die day, senators:

  • Killed LB 388, the Governor and Revenue Committee’s amended property tax relief package, in a stunning upset when Revenue Chair Senator Linehan late in debate asked Speaker Arch to “pass over” the bill, meaning a cloture vote would not be taken. Given the timing of this development — it being the last day of session and no time remaining to reschedule it or work on adjustments or compromise to gain votes — this was understood as a deliberate move by Linehan reading the writing on the wall that the bill did not have 33 cloture votes.

This came after a flurry of opposition activity from affected industries and lobby groups over the weekend and past several recess days, who waged a fairly intense last-minute push with advertising, calls to action and heavy amounts of contacts to senators’ offices pleading with them to oppose the bill. During debate, we again saw an interesting proponent-opponent split that didn’t fall along the traditional conservative-vs.-liberal divide: Senator Erdman spoke about how he regretted being the 33rd vote to send the bill this far, and Senator Slama led the filibuster that ultimately took the package down.

As to why Linehan took the quiet way out, asking to pass over the bill before letting it get to a vote: I can’t say for certain but I’ve heard speculation that after it became clear that the bill was a nonstarter from so many angles and lacked the votes to pass, she may have moved to shield some vulnerable colleagues from taking a politically “bad vote” on an ill-conceived bill. Senators like Bosn and Ballard, for example, were both appointed to their seats, will have to win their first elections this fall, and represent politically tricky districts that are partially in the city of Lincoln and partially in more suburban-rural parts of Lancaster County. They’re not the only two that could be on the chopping block or targets of political opposition mailers, but they’re prime examples that could be wary of making what could be seen as taking a “lose-lose” vote: with a little political spin, put one way, a no vote is a vote against property tax relief, while on the flip side a yes vote would have been a vote to raise taxes.

  • Killed LB 1363, containing provisions that would have eventually eliminated the inheritance tax, also a surprise to many.
  • Passed LB 1402 to send state funds to private schools in a nail-biter of a vote. Interestingly, though the bill passed, it fell one vote shy of passing with the emergency clause that would have put it into effect immediately. Since it will now go into effect in a few months, this allows time for a possible legal challenge or fresh petition drive to be mounted should opponents have the will and means to do so. The bill passed cloture with 33 votes but got only 32 to pass — and 33 would have been needed for it to pass with the emergency clause. Sen. Dorn, who had been seen as a swing vote on the issue, was the 33rd that fell off on the second vote to kill the “e-clause”.
  • Gave closing speeches: 15 departing members gave their farewell remarks; Speaker Arch addressed the body, mostly highlighting their successes and applauding their efforts to work together in this short session that was on the whole more collegial and productive than last year; and Governor Pillen delivered his closing address to lawmakers. Pillen expressed frustration with the legislature’s failure to pass his property tax relief package and pledged to call a special session — going so far as to say he’d call “as many as it takes” to deliver substantial property tax relief. He further threatened to call a special session to change Nebraska’s electoral voting system to Winner-Take-All if he gets a signal from legislative leaders that the proposal would gather enough votes to succeed. He did not provide a specific date range during which lawmakers might expect to return, but closed by telling them to enjoy the interim as “halftime” because he would see them again soon.

My take and that of most insiders I’ve consulted with is that a property tax special session is a near certainty for some time in the July-August range. That’s apparently what the Governor’s Policy Research Office has told some senators. It’s easy to promise these things now; but whether the Governor’s people will manage to assemble an effective team who will do the work to come up with a solid property tax proposal that can actually earn 33 votes by mid-late summer remains to be seen. IF Pillen can get all senators back from their much-desired vacations and retreats to their respective home districts midsummer, absent a substantial change of approach, it seems he’ll continue to face an uphill challenge in achieving his goal of 40% property tax relief. With the budget adjustments and appropriations bills passed by the body this session, along with last year’s major income tax cuts, estimates show that this year’s surplus disappears and falls into the red within a few fiscal years. So, a serious look would need to be taken at alternative means of revenue generation in order to provide further tax relief of this magnitude, and Nebraskans and heavy-hitting lobby groups have spoken loud and clear that raising the sales tax or other types of tax shifts are not popular.

Further, special sessions are expensive, costing what I’ve heard can be upwards of tens of thousands per day for staffing and operating costs that are beyond what’s built in for a typical session year’s budget. Pillen would be wise to not jump the gun if he doesn’t have a solid proposal to put forth, otherwise this could come back to bite him with voters and taxpayers later on.

As far as Winner-Take-All, it’s widely known that the 33 votes it would need to pass don’t currently exist, barring some major change. This is further complicated by Sen. Brewer’s announcement that he’s off to Ukraine again later this summer for an unknown length of time.

  • Also on Day 60, Sen. Wayne’s long-fought LB 20, which removes the two-year waiting period for Nebraskans who have completed their sentence for a felony conviction to have their voting rights restored, became law without the Governor’s signature. This is a rare, lesser-known option for a bill to become law provided for in our state Constitution. Governor Pillen, however, submitted a letter to the legislature informing them that the Attorney General and Secretary of State have identified what they believe to be constitutional problems with the bill, and he encouraged them to act swiftly and challenge the bill in court, presumably before it becomes law in a few months. At the time of this writing I have not seen or heard a statement from either official’s office, though it’s largely expected in legislative circles that Secretary Evnen will initiate a lawsuit challenging the bill’s constitutionality.

Until next year…or August?
Your Capitol Fly on the Wall