Governor Jim Pillen called the Nebraska Legislature into a special session to
tackle what he says is a property tax crisis. In his official call, the Governor provided guidelines to what issues can be raised during the special session. There has been a working group comprised of the Governor, his staff, and a group of state senators that have been meeting and discussing possible remedies that would help to lower property taxes in the state.
Just before calling the Legislature into special session, Governor Pillen introduced his property tax relief “playbook” which aimed to reduce property taxes by reining in state and local spending, shifting school funding obligations to the state, and eliminating a long list of sales tax exemptions. The initial list of sales tax exemptions that would be eliminated was long and included “federal credit unions”. The League went into advocacy action contacting the Governor’s team and key lawmakers from the working group. Following those efforts, federal credit unions were removed from the list.
There were over 80 legislative bills introduced in the first several days of the special session including LB 1 which was the Governor’s proposal. Also introduced was LB 47 by Sen. Justin Wayne which would have transitioned all state-chartered financial institutions, including state-chartered credit unions, from the franchise (deposits) tax to the state corporate income tax. The League testified before the Banking, Commerce, and Insurance Committee in opposition to the bill citing the additional tax burden that such a transition would place on state-chartered credit unions. Additionally, the League pointed out that if passed, the bill would exempt Subchapter S state banks from paying the franchise tax and the state corporate income tax because all Subchapter S corporations are exempt from state corporate income tax.
As debate continues in the Legislature on how to provide Nebraskans with property tax relief, the League continues to watch for any impacts that all proposals would have on Nebraska’s credit unions.
