Nebraska State Capitol
IMG 2475 300x228 - Senators focused on tax relief during Nebraska’s 2021 legislative session
The Legislature wrapped up its session in May. (Photo by Camryn Preston).

Senators approved an increase in state spending on initiatives such as broadband, foster care reimbursement rates, pay for people who provide services under Medicaid and rail industrial parks during Nebraska’s 107th legislative session, which adjourned on May 27. Senators also focused on cutting taxes and designated a portion of the state’s FY 2021-2022

$4.8 billion budget toward tax relief, according to the 2021 general fund budget summary.

Sen. Dan Hughes of Venango said this session was different because there was more money to work with. He said since the state’s largest industry is agriculture, Nebraska’s economy wasn’t hit as hard by COVID-19. The stimulus money from the government was also helpful in boosting the economy.

Hughes said the Legislature allocated much of the money to tax cuts including exempting retirement income for military retirement, cutting social security tax and cutting corporate income tax.

Senators passed LB51 that focuses on police reform. As opposed to the current 20 hours of annual law enforcement training, this bill requires 28 hours of annual training in 2022 and 32 hours of annual training every year going forward. It also mandates de-escalation and implicit bias training, places restrictions on the use of chokeholds and requires law enforcement agencies to have procedures for filing complaints against officers.

LB387, introduced by Sen. Tom Brewer of Gordon, eliminates state taxes on military veterans’ retirement income. According to the 2021 general fund budget summary, this will cost the state $7.9 million during fiscal year 2021-22 and $21.7 million by 2025.

LB64, sponsored by Omaha Sen. Brett Lindstrom, was passed with a 41-0 vote and aims to progressively reduce state income taxes on federal Social Security income over the next few years until, pending the passage of more legislation in 2025, it is completely eliminated in 2030. According to the 2021 general fund budget summary, this will cost the state $15 million during fiscal year 2021-22 and $57.4 million by 2025.

Also known as the Urban Redevelopment Act, LB544, proposed by Sen. Justin Wayne of Omaha, was passed with a 49-0 vote and will help provide tax incentives for small businesses.

LB388, proposed by Sen. Curt Friesen of Henderson at the request of Gov. Pete Ricketts, passed. This approved $40 million to help expand broadband internet access in rural areas. 

LB40 and LB566 were passed to help financially support increasing railroad access for businesses in rural areas and provide grants to arts, sports complexes, cultural projects and humanities projects that were negatively affected by the pandemic, respectively.  

There were a number of proposals that did not receive enough votes to pass but will likely be discussed again during next year’s legislative session. Among them were proposals to ban workplace discrimination on the basis of gender identity or sexual orientation, require voter ID, limit the local government’s power to increase property taxes, provide tax-credit funded scholarships to religious and private schools and switch Nebraska back to the winner-take-all system of awarding electoral votes.