Revenue Committee
March 12, 2025
Committee Chair: Sen. Brad von Gillern | Bills Heard: 4 | Full Transcript (PDF)
LB582: Increase cash device tax from 5% to 15%
Introduced by: Sen. Ashlei Spivey | Testimony: 1 proponents, 7 opponents, 1 neutral | Read bill text (PDF)
Sen. Spivey seeks to triple the tax on Nebraska's 5,500 cash devices, raising it from 5% to 15% to fund addiction programs and property tax relief. The bill would generate an estimated $9.9 million annually but faces fierce opposition from manufacturers, distributors, and small business operators who say the timing is terrible—the original 5% tax doesn't take effect until July 2025. Why it matters: Cash devices are ubiquitous in Nebraska, present in 90 of 93 counties. The state's gambling addiction program reports 60% of new clients play on these machines, suggesting a real public health problem. But the industry argues it's being hit twice: once with the 5% tax it agreed to, and now with a tripling before that tax is even collected. What they're saying: Proponents: "Computerized devices are the most addictive form of gambling and should be taxed like casino slots." Opponents: "We made a deal for 5%, invested based on that, and now you're changing the rules. This will kill small operators and manufacturers." By the numbers: 5,500 devices across the state; 45 registered distributors; 80% of distributors operate fewer than 100 machines; 727 fewer devices exist today than in 2024. What's next: No vote was taken. The committee will likely follow up with Sen. Spivey on county revenue impacts and consider amendments to the distribution formula.
Committee sentiment: Skeptical: Sen. Kathleen Kauth, Sen. Teresa Ibach, Sen. Brad von Gillern Unclear: Sen. Dave Murman
Sentiment estimated from questions and comments — not stated positions.
LR13CA: Constitutional amendment to eliminate inheritance tax
Introduced by: Sen. Bob Hallstrom | Testimony: 4 proponents, 7 opponents, 1 neutral | Read bill text (PDF)
Sen. Hallstrom proposes a constitutional amendment to let Nebraska voters decide whether to eliminate the inheritance tax, one of only five states that still imposes it. The amendment would place the question on the 2026 ballot, giving the Legislature time to work on replacement revenue if needed. Hallstrom expressed openness to Sen. Clements' LB468 as an interim step. Why it matters: Nebraska counties collected $84-94 million in inheritance tax last year, funding roads, public safety, mental health, and veterans services. Eliminating it without replacement revenue would force counties to raise property taxes or cut services—the very thing the Legislature has been working to prevent. But the tax affects less than 1% of the population, making it politically vulnerable. What they're saying: Proponents: "We're one of five states with this tax. It's double taxation and causes wealthy people to leave. Let voters decide." Opponents: "When voters learn property taxes will go up or services will be cut, support drops from 80% to 20%. This is a complex policy question, not a ballot measure." By the numbers: $84 million collected annually; affects 0.25% of Douglas County population; 46 proponent letters, 19 opponent letters. What's next: No vote was taken. The committee will likely consider whether to advance the amendment with or without an amendment requiring replacement revenue.
Committee sentiment: Skeptical: Sen. Kathleen Kauth Unclear: Sen. Dave Murman, Sen. Mike Sorrentino, Sen. Teresa Ibach
Sentiment estimated from questions and comments — not stated positions.
LB566: Remove sunset on housing incentive tax credit for extremely blighted areas
Introduced by: Sen. Dan Quick | Testimony: 4 proponents, 2 opponents, 0 neutral | Read bill text (PDF)
Sen. Quick seeks to make permanent a $5,000 tax credit for homebuyers in extremely blighted areas, a program set to expire that has helped about 10 families per year. The credit applies only to owner-occupied homes; buyers must stay for five years or repay it. Habitat for Humanity has used it to build 67 homes in Omaha for families making $65,000-$85,000 annually. Why it matters: Nebraska has a housing crisis, and blighted neighborhoods need investment. The credit targets working families—teachers, hospitality workers, plumbers—who might otherwise rent. It also helps owner-occupants compete with out-of-state cash investors. What they're saying: Proponents: "This works. Habitat has built 67 homes and plans 145 more. It shifts development from rentals to homeownership." Skeptics: "Is 10 homes per year worth it? Is $5,000 enough incentive? Should we make it refundable to reach lower-income families?" By the numbers: ~10 homes per year; fiscal note projects $44,000 next year, $116,000 by 2029; 5 proponent letters, 2 opponent letters. What's next: No vote was taken. Sen. Kauth suggested extending the sunset for five years rather than eliminating it, allowing for future review of effectiveness.
Committee sentiment: Supportive: Sen. Kathleen Kauth Skeptical: Sen. John Bostar Unclear: Sen. Dave Murman, Sen. Teresa Ibach
Sentiment estimated from questions and comments — not stated positions.
LB152: Create universal homestead exemption on first $100,000 of home value
Introduced by: Sen. John Cavanaugh | Testimony: 1 proponents, 0 opponents, 1 neutral | Read bill text (PDF)
Sen. Cavanaugh proposes exempting the first $100,000 of owner-occupied home value from property taxes—a universal homestead exemption that would cost $884 million annually. He acknowledges the bill is aspirational given the current revenue shortfall but brought it to advance the conversation on equitable property tax relief. The exemption would apply to all homeowners, not just seniors or veterans, and would be funded through state reimbursement to counties. Why it matters: This directly targets the homeowner everyone talks about—the person being priced out of their home. It's cleaner and more efficient than income tax credits, and it excludes out-of-state investors and large landowners. But it's expensive and shifts burden to agricultural landowners in rural areas. What they're saying: Proponents: "This is elegant. It targets homeowners, not investors. It's more efficient than LB1107." Skeptics: "It costs $884 million. It's unfair to farmers and ranchers who would bear more of the burden." By the numbers: $884 million annual cost; 16 proponent letters, zero opponent, zero neutral. What's next: No vote was taken. Cavanaugh suggested starting with a smaller amount ($10,000-$40,000) and phasing in over time. Sen. Ibach joked about amending it onto LB81, which she called "atrocious."
Committee sentiment: Supportive: Sen. Kathleen Kauth Opposed: Sen. Dave Murman Unclear: Sen. John Bostar, Sen. Teresa Ibach, Sen. Mike Sorrentino
Sentiment estimated from questions and comments — not stated positions.
Session Notes
Committee Chair von Gillern handed the gavel to Sen. Bostar partway through the hearing due to another commitment. The committee heard four bills: LB582 (cash device tax increase), LR13CA (inheritance tax constitutional amendment), LB566 (housing incentive credit), and LB152 (universal homestead exemption). No votes were taken on any bills. The committee will prepare committee packages for the bills heard.
Generated by NE Wire Service | Source: Nebraska Legislature Transcribers Office This is an AI-generated summary. Verify all claims against the official transcript.