Much of last week’s floor debate was around a proposal to phase out the state Inheritance Tax (LB 1067), Sen. Clements’ priority bill. Nebraska is one of 6 states that has such a tax, the proceeds of which are used by counties to fund infrastructure, programs and services, and to cover emergency costs.
Proponents of LB 1067 call Nebraska’s inheritance tax an unfair “death tax,” saying it levies a second tax on money or property that’s already been subject to income or property taxation before being left to a family member, and that it’s time for Nebraska to join the majority of other states in doing away with it.
Opponents shared a variety of concerns, primarily rooted in the argument that eliminating this tax would wipe out a major source of funding that Nebraska counties currently rely on, adding up to about $120 million in revenue a year. Counties’ only other source of funding is to levy property taxes.
The Nebraska Association of County Officials estimates that if LB 1067 passes, the resulting dent in county funding would drive either an 11% increase in property taxes or a substantial cut to critical county services. Some senators questioned the fairness of replacing this tax — which is paid by less than one percent of Nebraskans, and which is funded nearly 40% by tax levied on out-of-state beneficiaries — with higher property taxes on a much greater share of Nebraskans. Interestingly, some of the most vocal supporters of this bill are the same that continue to beat the drum about lowering property taxes.
Many opponents said they are not opposed to doing away with the inheritance tax on principle, but could not support phasing it out if the bill does not include replacement funding to make counties whole. This debate has been a great example of the beauty of the nonpartisan Unicameral: it’s been a filibuster with a mix of urban and rural, majority and minority members banding together in opposition over the proposal’s lack of an adequate proposed solution for making up the gap in county funding the bill would cause. LB 1067 has not yet reached a vote on General File.
Veto Override Votes Could Test Legislature’s Independence
Shortly after Sen. Hunt’s priority bill LB 307 passed Final Reading last week with a solid show of bipartisan support, Gov. Pillen issued a statement pledging to veto the bill, so we now have the first of what could be a few or many veto override votes on the horizon later in the session.
The bill allows cities and counties to authorize Syringe Service Programs (SSPs) as part of public health efforts. SSPs provide for safe disposal of used needles, syringes and other injection equipment; distribute sterile syringes on an as-needed basis; and also provides an array of services like referrals to treatment, mental health resources, HIV testing, and education around safer injection practices and overdose prevention.
SSPs are proven to reduce the spread of bloodborne diseases like HIV and Hepatitis C, which have seen an uptick in Nebraska in recent years; increase the likelihood of users entering treatment and engaging in long-term recovery; and can help prevent overdose incidents by providing materials like Naloxone and fentanyl test strips.
Given Speaker Arch’s vocal support of the bill, this tees up what could be the first test in an interesting potential “independent legislature vs. executive branch” showdown I’ve alluded to in earlier posts. It’s one thing for members to reach across the aisle to vote for a bipartisan bill on initial passage; but for those with any sense of loyalty to the Governor, it can be seen as a much higher-stakes decision to defy him on a veto override vote.
While this is only the first one we’re sure of, it sounds likely that there will be more to come. If we start to see more veto declarations come down, the body could build a “team mentality” to stand together in defiance of the Governor and ride that wave across multiple veto override votes. As such, it’s good strategy for Arch and sponsors of vetoed bills to hold off on scheduling overrides until late in the game to do them all at once in order to capitalize on that collective rebellious spirit that could build.
Private School Voucher Referendum Withstands Challenge
Earlier this year, Sen. Linehan had submitted a request to Secretary of State Evnen to remove the referendum on her LB 753 from consideration on the ballot this fall on the basis that, she claimed, the referendum interferes with the legislature’s constitutional right to determine state tax policy.
Late last week, Evnen issued his decision denying Linehan’s request, citing existing case law that found “the power of the referendum must be liberally construed to promote the democratic process.”
This means the referendum will certainly appear on November’s ballot. With this news, Linehan’s LB 1402 we discussed last week stands to be her “Hail Mary” before Nebraska voters have the ultimate say on whether they support the use of public funds for private schools.
Expect extensive debate on the constitutionality of LB 1402, which sends public money directly to private school scholarship granting organizations in the form of grants, and heavy opposition on the basis that if passed, it would deny voters the opportunity to vote on the issue — which they’ve made clear they want to have a say in.
Other News Bites
- The legendary former Senator Ernie Chambers filed to run for his former seat just ahead of the deadline, setting up a surprising challenge between him and his successor, incumbent Sen. Terrell McKinney, who Chambers had previously endorsed. Chambers has told media that it’s nothing personal with regard to McKinney and that he’s not running to challenge McKinney’s performance or stance on any given issue; rather he has said he feels his skill set is needed in the body and he always had in the back of his mind that if he was able to, he would return and run again.
- Lincoln Public schools has announced it has suspended referring families to collections for school lunch debts, and will recall current accounts with the collection agency. This announcement follows recent publicity, public pressure, and a bill effort (LB 855, Conrad) after it was discovered the district was referring some student lunch accounts with outstanding debts to a collections agency.
- State Chief Medical Officer Dr. Tim Tesmer declined to appear at a briefing he was requested to attend by the Health and Human Services committee last week. The briefing was set up as a team effort among Chair Hansen and Sen. Machaela Cavanaugh and was intended to provide an update on the rules and regulations being developed under Tesmer’s guidance to implement LB 574, the bill restricting youth gender-affirming care passed last year. Tesmer’s legal counsel sent a letter saying his absence was due to the final regulations being currently under review by the Attorney General’s office and requiring subsequent approval by the Governor’s office. I’m told the committee will now seek to get answers to their questions from Tesmer’s office in writing.
Until Next Week,
Your Capitol Fly on the Wall
