Income tax deduction for law enforcement officers considered

Nebraska law enforcement officers could deduct 50 to 100 percent of their pay from state income tax under a bill heard Feb. 16 by the Revenue Committee.

Sen. Steve Halloran
Sen. Steve Halloran

Hastings Sen. Steve Halloran, sponsor of LB1265, said the tax benefit would help Nebraska communities recruit and retain officers.

Under his proposal, officers who have completed at least one year but less than 10 years of service could reduce their federal adjusted gross income by 50 percent of their pay to the extent that the amount is included in federal adjusted gross income.

Officers who have completed at least 10 years but less than 20 years of service could deduct 75 percent, and officers who have completed at least 20 years of service could deduct 100 percent.

The state Department of Revenue estimates that LB1265 would reduce state general fund revenue by $16.9 million in fiscal year 2022-23, $12.3 million in FY2023-24 and $12.7 million in FY2024-25.

Anthony Conner testified in support of the bill on behalf of the Omaha Police Officers Association. He said an increase in “anti-police rhetoric and activism” has helped create a nationwide law enforcement recruitment problem.

LB1265 would help the Omaha Police Department compete with the private sector and other law enforcement agencies around the country when trying to recruit talented young people and retain current officers, Conner said.

“We believe LB1265 will not only provide an immediate boost in morale for law enforcement across the state but also send a message to potential recruits or disaffected officers in other states that [we] support law enforcement,” he said.

Washington County Sheriff Mike Robinson also testified in support of the bill on behalf of the Nebraska Sheriffs Association, Police Officers Association of Nebraska and Police Chiefs Association of Nebraska. He said his office recently received only four applications for an open position when it typically would receive 40.

The proposed incentive could help offset the low pay and benefits that have contributed to a “crisis” in hiring and retaining law enforcement officers across the state, Robinson said.

No one testified in opposition to LB1265 and the committee took no immediate action on it.

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