Legislature notes: Nebraska’s craft brewers object to bills that would increase tax on beer to highest in U.S.

Legislature notes: Nebraska’s craft brewers object to bills that would increase tax on beer to highest in U.S.
World-Herald News Service

LINCOLN — Nebraska’s craft brewers are in a froth over two bills that would increase the state’s excise taxes on beer to the highest in the nation.

Lawmakers sponsoring the proposals say that the hike would translate into only about 10 cents per mug of beer and that increasing taxes on beer, wine and liquor is part of the solution to lowering property taxes.

But a craft brewers group, representing 49 small breweries across the state, say the tax increase could cause layoffs and could end some operations if they are forced to absorb what amounts to a 345 percent increase in the tax. They have been inundating state senators with complaints, which might be the first of many they hear about ideas to raise some other taxes to lower property taxes.

“We’re really scared that if this passes, it will stop the growth of this industry,” said Gabby Ayala, the executive director of the Nebraska Craft Brewers Guild. “Other states that have high taxes don’t have as many breweries — it stops people from wanting to invest and expand.”

Right now, the brewers complain that Nebraska’s excise tax on beer is the highest among its neighboring states at 31 cents per gallon. If it was increased to $1.38 per gallon, as proposed in two bills, the Cornhusker State would supplant Tennessee as the having the highest beer tax in the nation.

But State Sens. Tom Briese of Albion and Curt Friesen of Henderson, who have included identical tax hikes on beer, wine and liquor in their proposals, say that the excise tax could be easily passed along to consumers and that they doubt that a 10-cent hike for a brew would stop anyone from purchasing one.

The two farmers say the estimated $121 million a year in increased revenue from the excise taxes on alcohol would help offset revenue now raised by local property taxes, which are crushing owners of agricultural property.

“We do have a property tax crisis in Nebraska,” Briese said. “The responsible approach to provide immediate and substantial relief is to access other taxes.”

“I’m more troubled that we have some of the highest property taxes in the country,” the senator said, adding that the burden of property taxes is forcing some farmers out of business and is making it harder for young couples to buy homes.

The growth of small breweries has been an economic success story in the state. Unique beers are being produced in big cities like Omaha and Lincoln, as well as some of the state’s smallest towns, like Ohiowa and Taylor. New satellite locations of the breweries, called taprooms, seem to be opening every month.

“These breweries are the only real bright spot in a lot of little towns,” said Caleb Pollard of Scratchtown Brewing Co., which churns out 1,200 gallons of beer a month in Ord, a central Nebraska farm town of 2,100.

He said that the excise taxes he pays would rise from $4,800 a year to over $21,000 and that passing along that kind of increase to consumers is more complicated, and damaging, than the senators think.

Scratchtown, he said, competes with much, much larger breweries in other states that could more easily absorb such a tax increase.

“It will severely hurt our ability to be competitive,” Pollard said. The tax increase, he said, would force Scratchtown to reconsider a planned expansion and to look at reducing staff. The brewery now employs five full-time and two part-time workers.

Both Pollard and Ayala disputed that the increase would be only 10 cents a drink, saying it could be much higher.

Friesen said he’s open for negotiation about the size of the increase in alcohol taxes, but he said the tax on beer, wine and liquor has to be part of the conversation by lawmakers if they are going to provide property tax relief.

“Some (ideas) are going to fly and some aren’t,” the senator said.

One supporter of the idea is Project Extra Mile, an Omaha-based group that opposes underage and binge drinking. Chris Wagner of Project Extra Mile said that a 10-cent increase pales in comparison to the economic ills caused by alcohol, as measured in less worker productivity and additional costs of law enforcement and health care. Those costs were estimated to be $2.05 per drink, according to a 2010 study by the Centers for Disease Control and Prevention.

Wagner said another benefit of the bills would be to reduce alcohol consumption, especially among abusers, due to the higher cost.

President Donald Trump, in his 2017 tax cuts, included a federal tax break for small brewers. But Pollard said that break won’t come close to matching the big hit he’d get from the tax hikes proposed in the Nebraska Legislature.

At least three key senators on tax issues — Lou Ann Linehan of Omaha, Mike Groene of North Platte and Brett Lindstrom of Omaha — said they cannot support such a tax increase. But state lawmakers are just beginning the process of looking at all the property tax relief proposals, and “sin taxes,” like those on liquor, cigarettes and gambling, are sometimes a politically easy place to find new revenue.

On Thursday morning, Pollard was in the Rotunda of the State Capitol, trying to persuade other senators to oppose the increased taxes on beer proposed in Legislative Bill 314, Briese’s bill, and LB 497, Friesen’s measure.

“I’m a farm kid. I believe that property tax relief is long overdue, and we need some real solutions,” Pollard said. “But you don’t tax another industry to do this.”

Who’s liable when a self-driving car runs you over? Legislative bill attempts to clarify that

LINCOLN — Who’s liable if you get run over by a self-driving car?

On Tuesday, a state senator attempted to clarify that question about the fast-growing technology.

Under a legislative bill introduced by State Sen. Suzanne Geist of Lincoln, the manufacturer of the self-driving technology would be liable in a crash involving a vehicle that was capable of “the entire driving task” and operating in autonomous mode.

In the case of a vehicle operating “in concert” with a driver — such as a car with lane-centering technology that required a motorist to touch the wheel every so often or take control when making a stop — the driver would be liable.

Don’t worry quite yet, because there are no cars or trucks on the road yet that perform the “entire driving task,” but Geist said those technologies are coming, and Nebraska’s rules on liability need to be ready.

Julie Maaske, the director of the Nebraska Department of Motor Vehicles, said the agency asked Geist to introduce the bill. She said Legislative Bill 142 is an attempt to not only clarify who is liable, but th standardize that across the nation, based on guidance provided by the U.S. Department of Transportation and the federal Highway Traffic Safety Administration last summer.

LB 142 also requires manufacturers of automated driving systems to have at least $5 million worth of liability insurance and $1 million of insurance per vehicle, per accident.

But a representative of the nation’s auto and truck manufacturers said it was too soon to get so detailed about such issues.

Leighton Yates of the National Alliance of Automobile Manufacturers opposed LB 142 and said a law passed last year, LB 989, already contained language that defined who — or what — was liable in a crash. He said that LB 142 was unnecessary and would put Nebraska “out of step” with the rest of the country.

In the event of a crash, Yates said that normal standards of liability would apply. For instance, if a person improperly used automated features, that person would be liable, he said.

Brainard Sen. Bruce Bostelman, however, expressed concern. He said that current law makes it likely that lawsuits would determine who is liable and that LB 142 was an attempt to avoid that.

A representative of the Teamsters Union also testified, but in a neutral capacity. Kim Quick of Local 554 said that his union, which represents truck drivers, among others, wants to make sure any law on autonomous vehicles requires one driver to be in the vehicle.

The union is backing a bill by Omaha Sen. Mike McDonnell, LB 521, that would require a “conventional human driver” to be present in any “driverless-capable vehicle.” That bill is scheduled for a public hearing later in the 2019 session.

Geist offered an amended version of her bill that she said was crafted after discussing concerns with the manufacturers alliance, as well as representatives of Uber and Lyft. It would make a human driver liable, except when the automated driving system is engaged.

The Legislature’s Transportation and Telecommunications Committee took no action on LB 142, or its amended version, after Tuesday’s hearing.

Bill would conceal pension information for OPS employees from public

» Pension privacy. The public would no longer be able to see pension information for teachers, administrators and other Omaha Public School employees under a bill given the first of three rounds of approval in the Legislature on Tuesday.

Before the vote, State Sen. Mike Groene of North Platte raised concerns about that portion of Legislative Bill 33, saying the change would reduce government transparency. He said it means taxpayers could no longer find out which retirees get $100,000 a year in pension payments or know how much the average retiree received.

Groene pointed to the recent World-Herald series about the Omaha School Employees Retirement System, which went from being one of the top-performing pension plans in the country to being one of the worst, as an example of the value of transparency.

But Sen. Mark Kolterman of Seward, the Nebraska Retirement Systems Committee chairman, said state law already protects the privacy of state-run pension plan members. The only information available about them is their name and their dates of participation in the program. Before those protections were passed, he said, agents had been getting the information to make sales pitches to plan members.

» Surplus military vehicles. It would be easier to license surplus military vehicles under a bill offered by Sen. Tom Brewer of Gordon, a decorated veteran, who owns a surplus Humvee. Brewer said that he and his friends, who bid on such vehicles, have experienced difficulties when trying to title and license them because sometimes the vehicles don’t have all the required safety features, such as air bags. Under LB 156, a special “former military vehicle” license plate would be issued.

Don’t worry — the bill does not pertain to tanks. Brewer said the military doesn’t sell them.

» New poll on property tax reform. The Omaha-based Platte Institute says that a new poll of nearly 3,000 voters living in the legislative districts of the eight members of the Revenue Committee concludes that there’s a real appetite for property tax reform this year.

The poll, conducted via telephone in January, found that a majority (62 percent) favored additional limits on local property taxing authority, and a plurality (47 percent) supported ending some sales tax exemptions to reduce property taxes. Those polled, however, differed widely on which exemptions to rescind.

Proposals by Sens. Curt Friesen and Tom Briese include eliminations of sales tax exemptions, such as those on junk food and all groceries. Gov. Pete Ricketts has called for a constitutional amendment to limit increases in property tax collections to 3 percent or less a year. The Platte Institute poll, however, asked respondents if they favored a limitation “law,” rather than a clause in the constitution.

As Nebraska bills tackle felons’ voting rights, proposed California ballot measure would let parolees vote

The Associated Press

SACRAMENTO, Calif. — Tens of thousands of parolees would be allowed to vote under a state constitutional amendment proposed Monday by California’s secretary of state and Democratic lawmakers who called it the next civil rights issue.

The proposal intended for the 2020 ballot would help nearly 50,000 felons who have served their time adjust to being back in the community, said California Secretary of State Alex Padilla and other advocates.

California is one of several states that have or are considering expanding voting rights for felons. The California measure would not affect criminals until they are released from custody, unlike Maine and Vermont, which allow felons to vote while they are behind bars.

In Nebraska, State Sen. Machaela Cavanaugh of Omaha has introduced a bill to end the ban on voting by felons, meaning people in prison could vote if registered. And State Sen. Justin Wayne of Omaha reintroduced a bill Jan. 14 that would reinstate voting rights immediately after completion of a sentence or probation instead of the current two-year delay.

Lawmakers in New Mexico also recently proposed allowing voting in prison.

Fourteen other states and Washington, D.C., already allow felons to vote after their release from prison, said California Assemblywoman Sydney Kamlager-Dove of Los Angeles, who called it “the civil rights issue of the day.”

The pool of potential voters in Florida grew by 1.4 million people in January after voters approved a ballot measure to allow ex-convicts who completed their probation or parole to register to vote, with the exception of those convicted of murder or sex offenses.

Starting in March, Louisiana will allow anyone on probation or parole to vote once they’ve been out of custody for five years, unless they’ve been convicted of a felony election offense.

Minnesota Secretary of State Steve Simon in January proposed restoring voting rights for felons when they are released from prison instead of later.

Crime victims groups plan to fight the California measure.

“Why should the individuals who committed these horrible crimes be given the same rights as the rest of us who are following the rules?” asked Christine Ward, executive director of the Crime Victims Action Alliance.

Advocates said about 6 million Americans are unable to vote nationwide because they are felons.

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