$9 minimum wage, tax breaks to go into effect in 2016

By GRANT SCHULTE

Associated Press

LINCOLN, Neb. (AP) - Nebraska residents earning the minimum wage will get a raise to $9 an hour when the new year begins, and farmers, businesses and zoos will get new tax breaks.

Eight state laws passed during this year’s legislative session will go into effect on Friday, as well as the final phase of the minimum wage ballot measure approved by voters in November 2014.

Here’s a look at the major changes and what they mean for the state:

MINIMUM WAGE

Nebraska’s minimum wage will rise from $8 to $9 an hour, the final incremental increase from the $7.25-an-hour wage that was in place until the end of 2014.

Advocates say the higher wage will help workers whose pay hasn’t kept pace with inflation. They also note that Nebraska continues to have one of the nation’s lowest unemployment rates, despite criticism that boosting the wage would lead to a slowdown in hiring.

“I don’t think we’ve seen those fears being borne out over time,” said James Goddard, a staff attorney for the nonprofit group Nebraska Appleseed.

Business groups say their members have adapted, but some may hesitate to hire more people.

The wage increase comes as restaurants struggle to adjust to the Affordable Care Act as well as proposed federal changes that would allow millions of additional workers nationwide to qualify for overtime pay, said Jim Partington, executive director of the Nebraska Restaurant Association.

“There’s been an impact on profit margins and some increases in menu prices,” Partington said. “The restaurant industry is being hit pretty hard.”

PERSONAL PROPERTY TAX

Nebraska farmers and business owners may qualify for a property tax break under a new state exemption for personal business property.

The law approved in May allows business owners to exempt the first $10,000 worth of tangible property used in their operations, for an average tax savings of $162. The exemption applies to farm equipment such as irrigation pivots and tractors, and business equipment such as rail cars, pipelines and factory machines. It will cost the state an estimated $19.6 million a year.

The law is LB259.

TAX BREAKS FOR WOODMEN OF THE WORLD

A well-known fraternal society will get an estimated $800,000 property tax break for its 30-story headquarters in downtown Omaha.

The new law approved in May provides a tax exemption to nonprofit fraternal benefit societies. It was aimed at the Woodmen of the World Insurance Society, a prominent insurance firm that suggested it might leave Omaha.

Supporters in the Legislature argued that the organization provides 550 good-paying jobs. Critics assailed the measure as bad tax policy, and state Sen. Ernie Chambers of Omaha accused its supporters of “licking the boots of the big shots.”

The law is LB414.

TAX BREAKS FOR ZOOS, AQUARIUMS

Nationally accredited zoos and aquariums will no longer have to charge sales taxes for admission or membership fees, and their purchases will be tax exempt as well.

The new law applies to zoos that are operated by public agencies or nonprofit groups for educational, scientific or tourism purposes.

The chief beneficiary is Omaha’s Henry Doorly Zoo, ranked first in the world by travel website TripAdvisor with some 1.7 million visitors a year. The Lincoln Children’s Zoo and Riverside Discovery Center in Scottsbluff will also benefit.

Supporters say the zoos encourage tourism in Nebraska, but some conservative lawmakers argue that it comes at the expense of tax relief for larger groups of people.

The law is LB419.

RENEWABLE ENERGY TAX

Facilities that produce solar, biomass and landfill gas energy will face one less obstacle that could hinder the industry’s growth in Nebraska.

A new state law will require facilities to pay a nameplate capacity tax similar to one already imposed on wind energy, instead of a personal property tax.

The nameplate capacity tax is a tax on an energy facility’s potential output. County governments and project developers both generally prefer it over the personal property tax because it provides a consistent revenue stream for counties and lower up-front costs for a facility’s owners.

Prior to 2010, Nebraska wind energy facilities were taxed as personal property that depreciated over a five-year period. The old tax created budget problems for host counties and project developers because it generated a spike in revenue at the outset of a project, followed by a sharp downturn in the following years.

The law is LB424.

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