Not a pretty picture
There’s speculation that Speaker Scheer may reconvene the Legislature in June if this COVID-19 thing straightens up. Seventeen days remain in the session. The first fiscal year (2019/20) of the state’s biennial budget ends June 30.
On March 12, four days before COVID-19 shut down the session, senators advanced two budget bills from General File to Select File. The resulting $9.4 billion Appropriations Committee Budget Proposal projected 5.2% growth in 2019/20 General Fund revenues. Projected growth for the second fiscal year (2020/21) was only 0.6%. COVID-19 blew-up those projections in just six weeks.
The proposed budget also reflected a very healthy balance of $731.1 million in the state’s Rainy-Day Fund (Cash Reserve Fund). With an $83.6 million appropriation on March 25 to help with the state’s COVID-19 response and a sure decline in revenues, the Rainy-Day Fund is certain to take a hit.
In an April 22 study commissioned by the Platte Institute, economists Ernie Goss and Scott Strain reported that in March and early April 2020, Nebraska experienced a loss of 96,147 jobs, and $46.2 million in state and local tax collections, for a total impact of $834.5 million.
By pushing the tax filing deadline to July 15, the IRS shifted a projected $385 million in taxes from the state’s FY2019/20 to FY2020/21. Additionally, some businesses and individuals impacted by the pandemic may not be able to meet their tax obligations.
How about some good news: Nebraska received $1.25 billion in the COVID-19 emergency relief funding from the federal government.
Don’t forget about Nebraska’s 530 municipalities that rely heavily on sales and use taxes to fund their budgets. With many Mainstreet businesses in lockdown, those revenues are not flowing to cities and villages. The state may have to step in and provide relief.
In case you missed it, Governor Ricketts will ease some COVID-19 restrictions beginning May 4.
- Hospitals may resume scheduled elective surgeries and procedures if 48% of hospital beds, 42% of ICU beds, and 74% of ventilators are available for use statewide as of April 24. Additionally, each facility must have two weeks’ worth of PPE on site.
- Dentists and veterinarians can get back to work.
- Rather than a single statewide Directed Health Measure (DSM), the Governor will more effectively manage regional conditions by issuing unique DSM’s for each of Nebraska’s 19 local health departments (LHD).
- Places of worship can reopen by maintaining six feet of separation between household units. Passing items is not allowed. No collection plates?? More instructions to come.
These LHDs will have further relaxed measures on May 4: Douglas County, Sarpy /Cass, East Central, Four Corners, Loup Basin, North Central, Northeast Nebraska, Panhandle, Southeast, and Southwest Public Health Districts.
- Beauty shops, nail salons, barbershops, massage therapy services, and tattoo parlors may open. Workers and patrons must wear masks.
- Restaurants may serve dine-in customers by limiting seating to 50% of capacity. Parties must be seated six feet apart, and six people max per party.
- Childcare facilities can have up to 15 kids per room/space.
LB803 (Hughes) MONITOR – SPEAKER PRIORITY BILL
- Creates a new promotional checkoff program for pulse crops, including dry peas, lentils, chickpeas or garbanzo beans, faba beans, and lupine. The bill also expands a waiver of a distance limitation for overweight/oversize vehicles transporting crops to include pulse crops.
LB1084 (Kolterman / MONITOR)
- The Nebraska Transformational Project Act would provide $300 million in state funding to the University of Nebraska Medical Center for their NExT Project. Before receiving $300 million, UNMC must show the economic impact to Nebraska is at least $2.7 billion during the planning and construction period and at least $4.9 billion over ten years.
- NExT Project has two components: a state of the art academic medical center facility and a federal all-hazard disaster response military and civilian partnership.
LB1159 (Stinner) SUPPORT
- Extends the initial training period for a noncertified pesticide applicator from 60 to 120 days prior to obtaining an initial commercial or noncommercial applicator license. The bill also authorizes unlimited exam attempts for the noncertified applicator during that training period.
Held In Committee
LB919 (Wayne / MONITOR)
- Hemp cultivator, processor-handler, and broker license and renewal applications shall only be denied if they are incomplete or deficient, including for nonpayment of the required application and registration fees, or if the applicant does not meet minimum qualifications.
LB946 (Briese / MONITOR)
- The bill lowers the sales tax rate and eliminates exemptions on services. Service includes all activities that are engaged in for other persons for a consideration and that involve predominantly the performance of a service as distinguished from selling or leasing tangible personal property.
Failed to Advance
LB974 (Linehan) MONITOR – REVENUE COMMITTEE PRIORITY BILL
- A complex property tax reduction and school funding bill. As amended by AM2433, the bill would reduce property taxes as a significant source of funding for K-12 education. Unless expressly exempt:
- Real property would be valued at 95% of actual value for the tax year 2020, 91% in the tax year 2021, and 86% in 2022 and after that.
- Agricultural and horticultural land would be valued at 65% of actual value in the tax year 2020, for purposes of taxes levied by a school district and 75% of actual value for taxes levied by other political subdivisions.
- Agricultural and horticultural land would be valued at 60% of actual value in the tax year 2021, for purposes of taxes levied by a school district and 75% of actual value for taxes levied by other political subdivisions.
- Agricultural and horticultural land would be valued at 55% of actual value in the tax year 2022, and each tax year after that, for purposes of taxes levied by a school district and 75% of actual value for taxes levied by other