The writer, of Lincoln, is president of the Nebraska Chamber of Commerce & Industry.
Thanks in part to a solid game plan, Nebraska is on a winning streak.
Over the past five years, our state has weathered a period of national and global economic instability because our state practiced risk management better than most other states — and certainly better than the fiscal strategy employed in Washington, D.C.
The risk management plan utilized by the Nebraska Legislature and our governor has relied on three key factors:
>> Maintain a balanced budget.
>> Lower Nebraska’s overall tax burden.
>> Modernize our state’s economic incentive programs, which encourage new investments and greater diversification of Nebraska’s economy.
In the current session, the Legislature is considering a bill (LB 613) that could kick-start an overhaul of Nebraska’s tax system. The bill would create the Tax Modernization Commission to devise a plan to ensure more tax competitiveness and simplicity.
Some have suggested that the Legislature delay any and all ideas to improve the state’s tax code until the Tax Modernization Commission can put forth its report and the Legislature can act a year from now.
The simple reality is this: Nebraska and its economy can’t afford to take a timeout.
During the next 12 months, hundreds of millions of dollars will be invested in the Plains and Midwest. Thousands of jobs will be created. Businesses, families and individuals will be making major decisions regarding their long-term futures.
Nebraska is not an island. We must compete with other states in our region, coastal states and nations around the globe. Sitting on the sidelines for a year would be unwise and risky.
Failing to make common-sense improvements to Nebraska’s job-creation incentive programs could result in missed opportunities, lost jobs, fewer investments and a weakened economy.
That’s why the Nebraska Chamber of Commerce & Industry is closely following these bills in this year’s Legislature:
>> LB 308 would reduce Nebraska’s tax burden by repealing the Alternative Minimum Tax (AMT). Nebraska is one of only nine states with its own AMT, a tax that is threatening many middle-class taxpayers. An amendment to LB 308 would extend the carry-forward deduction period for a business’ net operating losses from five years to 20 years — allowing more flexibility for businesses and making Nebraska’s code consistent with federal law. Some experts have suggested that enactment of LB 308 could significantly improve Nebraska’s standing in national competitiveness rankings.
>> LB 104 would allow tax incentives for the production of electricity by renewable sources of generation, including wind power, similar to incentives offered by surrounding states. Sources of renewable energy would mean wind power, solar power, geothermal energy, hydro power and other clean energy generation. This would allow Nebraska to be more competitive with surrounding states in the renewable energy sector.
>> LB 476 would modify the provisions of Nebraska’s internship grant program to allow more flexibility for businesses, educational institutions and students, while increasing the reimbursement for internships. This intern program, created in 2011, is one of the keys to addressing Nebraska’s “brain drain” and skilled labor shortage.
>> LB 75 would ensure that income from military retirement is not taxed at the state level. While the amount exempted would be capped, this bill would be a good first step in helping Nebraska retain more military retirees, who provide a huge boost to our work force. There are 26 states that do not tax retired military pay.
>> LB 17 would help make Nebraska more retiree-friendly by reducing the tax burden on low-income and middle-income Social Security beneficiaries. This, too, has become an issue of competitiveness. In Nebraska, Social Security income is taxed to the same extent as on federal returns, while 36 other states impose no tax on Social Security benefits.
>> LB 96 would exempt the sale of repairs and replacement parts for ag machinery or equipment from sales and use taxes. This would put Nebraska implement dealers on a level playing field when competing with companies in neighboring states.
These are common-sense bills to improve Nebraska’s economy and job market. Moreover, they are affordable and can fit in the state budget if government spending is kept in check.
Our state’s leaders must not undermine Nebraska’s economic growth with inaction. In today’s competitive economic environment, every day and every job counts.