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Legislation for Business

The largest tax relief bill in Nebraska history coupled with a comprehensive package of business and tax incentive legislation that became effective in 2006 are earning Nebraska accolades as a pro-business environment.

In May, the legislature passed and Gov. Dave Heineman signed tax relief legislation that is expected to provide $425 million in tax relief over the next two years.

The bill was the Greater Omaha Chamber of Commerce’s legislative priority this year. It included reductions in Nebraska's income, sales and property taxes and the outright repeal of Nebraska’s estate tax and the sales tax on construction labor.

“Repealing the estate tax sends a strong message about our competitiveness and about keeping people in Nebraska,” said Pete Festersen, the Chamber’s vice president of public policy.

The repeal of the estate tax is retroactive to Jan. 1, 2007, and will provide more than $37 million in tax relief over the next two years. The repeal of the construction labor sales tax for commercial enterprises is effective Oct. 1, providing more than $14 million in tax reductions in the next two years.

Another significant component of the package is the largest income tax cut in recent history. Over the next two years, $146 million will go towards eliminating the marriage penalty through adjustments to state income tax brackets and standard deduction amounts.

Other provisions include expansions of Nebraska’s Earned Income Tax Credit and tax credits for renewable energy projects in the state, and a property tax credit worth $220 million over the next two years.

Through the Nebraska Advantage Act, which took effect in 2006, $200 million in incentives became available annually to businesses that create new jobs and investment in the state, as well as $25 million in new job training funds over a four-year period.

The package included a new research and development tax credit, a sales tax exemption for the purchase of manufacturing equipment, a microenterprise tax credit and a lower tier to allow more small businesses to qualify for incentives.

The legislation is having a great impact. The State of Nebraska has received applications for 97 projects, with the potential for $3.6 billion in capital investment and 17,000 new jobs. More than half of those projects are taking place in the Greater Omaha area.

This year, Nebraska was named among the Pollina Corporate Top 10 Pro-Business States. The Pollina study is conducted by Ronald Pollina, a corporate site selection consultant based in the Chicago area. It examines 29 factors relative to states’ efforts to be pro-business.

States are ranked initially on factors including taxes, human resources, right-to-work legislation, energy costs, infrastructure spending, workers’ compensation funding and net job growth. A second ranking examines incentive programs and state economic development departments.

Pollina said Nebraska ranked seventh on the second group of factors. “That is one of the greatest strengths you have right now,” he told the Omaha World-Herald. “I have to congratulate you. You’ve done an outstanding job.”

The Chamber was a key player in promoting the legislation, working closely with other statewide business interests, Gov. Heineman, members of the Legislature and the state Department of Economic Development.

“The Nebraska Advantage Act has been a tremendous success, making our state competitive for job creation and economic growth,” says Festersen. “Still, we must continue to focus on reducing our overall tax burden and improving our regulatory climate to thrive as a state.”

Did You Know?

• Nebraska’s legislature is unique among all state legislatures in the nation because it has a single-house system. The unicameral was implemented in 1937 and has proven to be quite efficient.
• In a one-house legislature, no actions can be concealed as is commonly done in the conference committee of bicameral legislatures.
• Nebraska’s legislature is nonpartisan; a candidate’s political party is not listed on the election ballot.
• Nebraska’s legislative leadership is not based on party affiliation.

Nebraskans recently approved term limits. Realizing the importance of the issue and the turnover in political leadership that was about to occur in the state legislature, the Greater Omaha Chamber of Commerce and other business interests actively supported Nebraska-PAC. Nebraska-PAC is a non-partisan, independent political action committee that works to recruit and elect pro-business candidates to state and local office. In 2006, 75 percent of candidates supported by Nebraska-PAC won.

Keeping Greater Omaha-area business leaders, local- and state-elected officials connected with leaders at the federal level is a priority for the Chamber’s public policy division. Each fall, they sponsor a trip to Washington, D.C., expressly designed to give participants the chance to communicate with federal officials and policymakers about issues important to our city and to the entire state.

Great Reasons to Join the Chamber Today!
www.omahachamber.org

VISIBILITY
Networking: 100 annual networking opportunities for company visibility and leads

Buy the Big O! Show: The region’s largest business-to-business trade show held each fall, www.BuytheBigOShow.com

Chamber Web Site: Member news, member-to-member discounts and membership directory, www.omahachamber.org

Sponsorships: Promote your business through affordable opportunities

KNOWLEDGE
Chamber Academy: Training on sales, marketing, and management

Tips Groups: Weekly, monthly or quarterly meetings for market awareness and professional networking

Area Councils: Forums, in six geographic areas, for businesses to discuss business issues and developments

Weekly E-newsletter: Chamber news and events

ACCESS
Group Savings Programs: Small business health insurance, office supplies, credit card services and long distance services

Public Policy: Working for legislative reforms on your behalf at the city, state and national level

Research Data: Specific data to assist in market and location decision-making

Economic Development Services:
www.accessomaha.com

Competing to Win

Competition is a wonderful thing. It makes you better at what you do. It gets the adrenalin pumping. While it rewards the prepared it also penalizes the unprepared. Everyone has his or her own way of preparing for competition but there is one common tactic - assessing the playing field. Whether it is sports, academia or business, it is critically important to know what the competitive environment is going to be. In some cases, you can actually change the playing field to your advantage.

Our playing field is the business climate in Nebraska. We are very pleased with the role we have played in making Nebraska a more competitive state for business development. We have focused on taxes, incentives, regulatory environment and state spending.

In addition to tax cuts and incentives discussed in “A Definite Advantage,” state spending in each of the next two years will be limited to a 4.6 percent increase. This is important as it shows that the state can accomplish such discipline without a constitutional amendment. And, the governor has directed his team to be responsive to development opportunities, leading with the appointment of a new tax commissioner with roots in the private sector.

Combining successes of the 2005, 2006 and 2007 legislative sessions, we are approaching $1 billion in incentives and tax cuts geared towards making the state more competitive for business. There is more to do, but these past three years have gotten us better prepared for the competition ahead; and it's a competition that we intend to win!

David G. Brown
President and CEO
Greater Omaha Chamber of Commerce