Capitol Digest reporters photo xcapitoldigest capitoldigest

From left, World-Herald legislative reporters Martha Stoddard, Paul Hammel and Aaron Hegarty.

The World-Herald’s Statehouse reporters round up news highlights from the Legislature and state government into the Capitol Digest — a daily briefing for the political newshound with a busy schedule.

ImagiNE Act heads for final, contentious debate. Whether upset rural senators can block final approval of a proposed replacement for the state’s main business tax incentive program remained unclear on the eve of the Friday morning debate.

Rural senators vowed to kill the bill after their attempts to pass a significant property tax relief proposal fizzled on Wednesday. If successful, they would block the top priority of the state’s business community.

But State Sen. Mark Kolterman of Seward predicted Thursday that he’ll have the 33 votes needed to head off a filibuster and get the bill passed after working out one more amendment to his Legislative Bill 720.

That amendment would place a “soft cap” on state spending on tax breaks for business by allowing the Executive Board of the Legislature to review the cost of the incentives if they come in higher than a three-year projection. Some senators had been calling for some kind of cap on business incentives, citing the unpredictability of tax credits doled out under the Advantage Act and the difficultly in budgeting for it.

But rural senators were saying Thursday that they were close to amassing the 17 votes needed to block the bill. And one powerful lobbying group, the Nebraska State Education Association, sent out an “alert” Thursday to legislators asking them to oppose the ImagiNE Act because its price tag — $150 million a year — was too high and would rob funds from education.

One key senator, Lou Ann Linehan of Elkhorn, said it may not be known until Friday morning if LB 720 has the votes to pass.

Skill games. Lawmakers gave final approval to a bill that seeks to ensure that so-called skill games that have become commonplace in Nebraska bars and convenience stores are legal games of skill, rather than illegal video slot machines that spit out money based on chance.

But before the 44-0 vote to approve LB 538 was taken, senators engaged in a short debate over legalizing gambling and whether the skill games should be taxed to help provide property tax relief. Omaha Sen. Justin Wayne offered a last-minute amendment to impose a 6% tax on the gross revenue of the skill games, saying it is consistent with his views that casinos should be legalized in Nebraska and taxed to provide property tax relief.

Sen. Steve Lathrop of Omaha, the sponsor of LB 538, opposed the amendment, saying it was an attempt to kill the bill. He added that proposals to raise taxes ought to be funneled through the Legislature’s Revenue Committee, not brought up on the final round of debate.

Wayne ultimately withdrew his proposed amendment.

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Income tax changes. Legislation to cut the corporate income tax rate will have to wait for another year, the chairwoman of the Revenue Committee decided Thursday.

Sen. Lou Ann Linehan asked for LB 288 to be put on hold for this year, after it became clear the measure would have a difficult time advancing. She pledged to keep working on income tax issues in the coming months, with the hope of finding more agreement before the 2021 legislative session.

LB 288, as advanced from the Revenue Committee, would have made a couple of income tax cuts. It would have lowered the top corporate income tax rate to match the top rate for individual income taxes.

It also would have reversed a $22 million tax hike resulting from the 2017 federal tax changes. About 37,000 income tax filers were affected by a new $10,000 cap on the amount of property taxes that can be deducted on federal tax returns.

To pay for those cuts, the bill would have raised other revenue, creating a conflict with Gov. Pete Ricketts, who, Linehan said, would have vetoed it. It would have reduced some deductions for higher income earners and imposed income taxes on out-of-state companies that operate franchises in Nebraska. Sen. Sue Crawford of Bellevue raised a concern that the measure left out a proposed income tax cut for military retirees.

Linehan said Thursday that the governor pledged to work with her on the proposal next year.

Hearing aids. Nebraska children with hearing problems would have a better chance of getting needed hearing aids under a bill passed by state lawmakers Thursday.

LB 15, introduced by Sen. Carol Blood of Bellevue, would require health insurance plans to pay for hearing aids and related services for people age 18 and younger — up to $3,000 of coverage in a four-year period. The requirement would not apply to small group employer plans or to self-insured employers.

Jeremy Fitzpatrick, board chairman of the Nebraska Commission for the Deaf and Hard of Hearing, hailed passage of the measure. Hearing aids can cost up to $6,000 per pair and must be replaced every 3 to 5 years, which creates a burden on many Nebraska families.

“LB15 will make all of us better by improving access to hearing aids to children who need them so they can learn and grow,” Fitzpatrick said.

Census count. A bill winning first-round approval Thursday would designate a special committee to ensure that all state residents get counted in next year’s census.

LB 436, introduced by Sen. Matt Hansen of Lincoln, would authorize the Nebraska State Data Center to form a Complete Count Committee on the state’s behalf. Hansen said the legislation would give the committee more authority and more ability to raise private support. The committee would lead outreach efforts to encourage full participation in the census.

The federal census, done every decade, determines how many representatives Nebraska will have in Congress. It also is used to determine how much each state will receive from various federal programs. Sen. Tony Vargas of Omaha said Nebraska lost an estimated $20 million of federal funding because of the number of people missed in the 2010 Census.

Dust-up over consent calendar. “Consent calendar” is where noncontroversial bills are assigned for quick passage and little debate.

But the surprise removal of a consent calendar bill from the agenda on Thursday, orchestrated by four senators, brought a sobbing condemnation from one lawmaker. Omaha Sen. Machaela Cavanaugh called it disrespectful and hurtful that the four senators — Steve Erdman, Robert Clements, John Lowe and Dave Murman — had asked that a consent calendar bill that she sponsored be removed from the consent calendar without speaking to her.

She said part of the reason it was so hurtful was that she had dedicated the bill to her uncle, Douglas County Clerk Tom Cavanaugh, who died of cancer in 2015.

The request didn’t become known until minutes before the final vote on the proposal, LB 533, was to be taken. Legislative decorum typically requires senators to notify a colleague if they plan to amend their bill. That prompted Lincoln Sen. Patty Pansing Brooks to label the move cowardly and inconsiderate. LB 533 did generate some grousing from Clements during earlier debate because it replaces the words “husband and wife” with “spouse” on state marriage license applications, to comply with federal law. The U.S. Supreme Court, in 2015, legalized same-sex marriage nationwide.

The speaker of the Legislature, Norfolk Sen. Jim Scheer, stepped in later to say he would reschedule LB 533 for a vote on Friday. Many senators applauded.

Martha Stoddard keeps legislators honest from The World-Herald's Lincoln bureau, where she covers news from the State Capitol. Follow her on Twitter @StoddardOWH. Phone: 402-473-9583.

Reporter - Regional/state issues

Paul covers state government and affiliated issues. He specializes in tax and transportation issues, following the governor and the state prison system. Follow him on Twitter @PaulHammelOWH. Phone: 402-473-9584.

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