Welcome

January 7th, 2015

Thank you for visiting my website. It is an honor to represent the people of the 1st legislative district in the Nebraska Unicameral Legislature.

You’ll find my contact information on the right side of this page, as well as a list of the bills I’ve introduced this session and the committees on which I serve. Please feel free to contact me and my staff about proposed legislation or any other issues you would like to address.

Sincerely,
Sen. Dan Watermeier

Legislative Update

January 30th, 2015

This past week, the Legislature debated whether the fees for issuing a marriage license and providing certified copies of marriage records should be increased. The marriage license fee hasn’t been increased since 1995. The proposed increase, from $15 to $50, would cover the counties’ administrative costs for issuance. Currently taxpayers are subsidizing a good portion of the cost. Amendments are pending to lower the proposed increase to $30 or $35. Under LB 88, the cost of providing a certified copy of a marriage record would increase from $5 to $16, which would align the fee charged by counties with what is charged by the Bureau of Vital Statistics.

Chief Justice Michael Heavican delivered his State of the Judiciary this past week. In his speech, he mentioned that the Judicial Branch participated in the Council of State Government’s Justice Reinvestment Working Group, along with the Executive Branch and Legislative Branch. The analysis from the CSG group found that people sentenced to probation have lower recidivism rates than people sentenced to prison and emphasized the value of increasing the use of sentencing alternatives.

Chief Justice Heavican reported on two effective sentencing alternatives available for our courts, instead of more costly incarceration sentences. Nebraska’s 16 problem-solving courts served more than 1,000 people last year, resulting in an estimated $15 million cost savings. Drug courts emphasize education and employment and results have shown that 95% of active participants are gainfully employed or attending school full-time. Furthermore, an evaluation of the drug courts portrayed that 95% of those who successfully complete the program remain crime-free one year afterwards. The second alternative is the Specialized Substance Abuse Supervision (SSAS) program, which provides an opportunity for otherwise prison-bound substance abusers to be intensively supervised by probation while receiving treatment. This program has seen 91% of participants remaining crime-free one year after being successfully discharged from the program. Additionally, an average of 94% of graduates were gainfully employed.

Several bills were heard before the Revenue Committee this past week that attempt to deal with the issue of high property taxes. Senator Kate Bolz of Lincoln introduced LB 186, which would establish a refundable income tax credit program. At a projected cost of over $200 million annually, this “circuit breaker” legislation aims to provide income tax credits to people whose property taxes or monthly rents are high compared with their incomes.

I introduced LB 178, which would lower the valuation on agricultural land from 75% to 55% for school district taxation purposes. Nebraska farmers and ranchers today represent less than 3% of the state’s population but pay more than 30% of the total property taxes collected statewide. Furthermore, in the last decade, property taxes on agricultural land has increased 162%, compared with the 40% increase in residential property over the same time period. Although I realize this legislation isn’t the end solution to the property tax problem, I feel that it is a first step, in that it helps address the disproportionate burden placed on rural land owners in the support of their school districts. The increased state aid which would be generated by this bill would be approximately $55 million, after the reduction in valuation is phased in over a four-year period.

Grand Island Senator Mike Gloor introduced LB 259, which proposes to exempt the first $25,000 in value of personal property. The fiscal impact on this bill is approximately $40 million per year.

More bills have been introduced with the goal of lowering property taxes in our state, which I will report on in coming weeks. If you have any questions or comments on legislation proposing property tax relief or on other issues before the Legislature, I encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE  68509. My email address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.

 

Legislative Update

January 23rd, 2015

The 10-day bill introductory period is complete, resulting in the introduction of 663 bills and 4 constitutional amendments. Last week, I summarized most of the bills that I had introduced to date.

This past week, I introduced several more, including LB 490, which would adopt the Provider Orders for Life-Sustaining Treatment (POLST) Act. A POLST is a medical order, completed and signed by a medical provider, resulting from a detailed conversation between the patient and physician or other health care provider. A POLST is intended towards individuals with advanced illness or frailty. The purpose of a POLST is to improve end-of-life care by converting a patient’s treatment preferences into medical orders that are transferable amongst home and health care settings. The use of a POLST form is not mandatory. It is voluntary, meaning that it is used only if a patient chooses to complete one. It can be reviewed and revised as needed. It is limited to one page, is printed on bright colored paper, and is commonly kept on the refrigerator for easy recognition by paramedics.

POLST legislation has been approved in 19 states. Additional states are in the process of developing programs. Several communities in Nebraska are already using a POLST form. A primary goal of LB 490 is to have a standard form, for use throughout the state, in order to avoid confusion among health care providers in emergency situations.

Newly elected Governor Pete Ricketts delivered his first State of the State Address this past week. The Governor outlined the following objectives: controlling spending to keep it under the growth in revenue; property tax relief; cultural change and operational excellence in state agencies (through the creation of two new positions in the Governor’s cabinet – a chief operating officer and a human resources director); comprehensive reform in the Department of Corrections and the Department of Health and Human Services; regulatory process review; building on a military friendly culture; and improving educational outcomes, by creating a public-private partnership to create a career and vocational training program.

The Governor’s budget proposal would limit the two-year average growth in general fund spending to 3.1%, which is significantly less than the approximate 6.5% per year budget growth during the last biennium. He also stressed that he would not support any tax increases. To deal with what he termed as the #1 priority, he would add an additional $60 million per year to the Property Tax Credit Relief Fund. This is the concept that is contained in LB 364, a bill that I introduced last week. The Governor also indicated his support for reducing the value of agricultural land from 75% to 65% of actual value, along with an additional $9.5 million to the state aid formula, to make up for the loss in property tax revenue for school districts. I have introduced legislation similar to this concept, in 2013 and again this year, with LB 178.

The cash reserve fund was not touched by the Governor’s plan. However, he hinted that he believes the balance is too high and a portion should be returned to taxpayers. Although the Governor has indicated that he is supportive of income tax reductions, his proposal focused on property tax relief and only contained income tax relief for retired military veterans.

The public hearing process has started with committees meeting every afternoon. In the mornings, senators have begun debating legislation that has been advanced from the various committees.

If you would like to voice your opinion on legislation that has been introduced, I encourage you to contact me. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE  68509. My email address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.

Legislative Update

January 16th, 2015

Bills can be introduced during the first 10 days of the legislative session. The last day for bill introductions is Wednesday, January 21. The following is a brief description of the bills that I have been working on throughout the interim and have introduced so far.

LB 46, introduced on behalf of the statewide Trauma Advisory Board, revises language regarding the accreditation of rehabilitation centers in the state, specifically as it relates to the rehabilitation of trauma patients. The bill redefines the levels of rehabilitation services to reflect current practice and to bring the levels and definitions up-to-date.

LB 47 makes the question mandatory on an application for a driver’s license or identification card regarding whether to be on the Donor Registry. Currently, it is optional for applicants to answer this question. Nearby states that require responses have higher percentages of applicants indicating their wish to become donors.

Under LB 105, the state rather than the county, would have to pay for the costs associated with an autopsy and grand jury when an inmate dies in state custody. This is one of several unfunded mandates that the Legislature will address as we work towards property tax relief. This legislation would help Johnson County, where Tecumseh State Correctional Institution is located.

LB 106, the Livestock Operation Siting & Expansion Act, was introduced to encourage livestock development and expansion, which is extremely important to the economy of our state. The industry in Nebraska hasn’t grown in the past two decades at rates comparable to neighboring states. The legislation would allow counties to use a scoring matrix system for the approval of new or expanding livestock facilities, which would make the process more predictable and consistent throughout the state.

LB 130 would allow projects allocated funding through the Nebraska Resources Development Fund to be eligible for funding from the new Water Sustainability Fund. I will also introduce a bill to appropriate enough funding within the next two years to allow for the completion of these projects. These projects were existing when the new funding system was passed last year. They are important projects that are beneficial for the state and have already been approved through an extensive application process.

LB 145 would eliminate the executive officer licensing requirement, while retaining the ability of the Department of Banking and Finance to suspend the authority of the executive officer or impose fines upon the executive officer for violations of law. Nebraska may be the only state that requires a formal license process.

LB 178 would reduce the valuation of agricultural land by 5% per year for four years, thereby reducing it from 75% to 55% for school district taxation purposes. This is another option that is being presented to look at property tax relief and the high burden placed on agricultural land owners in the support of local schools.

LB 188, which I am introducing again this year, amends our current pursuit law, which was enacted to protect an innocent bystander who gets hurt as a result of a police pursuit. Nebraska is the only state that imposes liability on the law enforcement agency regardless of whether the law enforcement agency was negligent in its pursuit and even when the driver being pursued causes the injury to the “innocent third party”. Under this legislation, a passenger in a fleeing vehicle would not be considered an “innocent third party” if they entered the vehicle knowing that the driver was under the influence, if they are sought to be apprehended by law enforcement or if they are engaged in any illegal activity which would itself result in arrest.

LB 228 would reduce the corporate income tax rate to the level of the top two brackets of the individual income tax. Other types of companies, such as limited liability companies and Subchapter S corporations are considered “pass-through” organizations under state and federal income tax laws. This is a special business structure that is used to reduce the effects of double taxation, meaning that pass-through entities don’t pay income taxes at the corporate level, only at the individual owners’ level. LB 228 is attempting to level the playing field for the different types of business structures.

LB 229 appropriates funding for the CASA (Court Appointed Special Advocates) program. There are currently 22 CASA programs serving 38 Nebraska counties, with more than 600 volunteers advocating for more than 1,500 Nebraska children. Statistics have shown that a child with a CASA volunteer is more likely to be adopted and less likely to re-enter foster care. The funding would allow the program to continue and grow to serve more counties.

LB 364 would increase the funding appropriated to the Property Tax Credit program, funding the program at $200 million per year. This would translate into an approximate $100 credit for each $100,000 of valuation.

LB 386 would exempt header trailers and seed tenders from sales tax. Agricultural machinery and equipment was permanently exempted from state sales tax beginning in 1992. In 2012, the Department of Revenue issued a revised “Information Guide” ruling that these implements did not qualify for the sales tax exemption. This legislation would clarify that such trailers are exempt, as was the practice before the ruling.

As the bills are introduced, I encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, Nebraska  68509. My email address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.

Legislative Update

January 9th, 2015

The One Hundred Fourth Legislature, First Session, is up and running and at a whirlwind pace. Although this past week has been a lot of pomp and circumstance with the swearing in of the newly elected senators, the inauguration ceremonies for the constitutional officers and the Governor’s inaugural address, senators have also been busy moving into their new offices and selecting what committees they will serve on for the next two years.

In his first speech to the Legislature, Governor Pete Ricketts revealed his top goals for the state. As part of his pro-growth agenda, he emphasized bolstering the economy by creating more and better paying jobs, cutting property taxes, reducing unnecessary state and federal regulations, and strengthening the state’s education system.

On the first day of session, senators elected committee chairpersons. I ran for and was elected as the vice chair of the Executive Board. Senator Bob Krist of Omaha was elected as chair. The Executive Board manages the Legislative Council, which consists of the offices of the Clerk of the Legislature, Accounting and Budgeting, Fiscal Analyst, Research, Ombudsman, Performance Audit, and Revisor of Statutes. The Executive Board makes the final decision as to what committee every bill is referenced to, makes appointments to various task forces and commissions, and holds hearings on bills referenced to the committee.

I was also selected to serve on the Appropriations Committee. This committee is responsible for reviewing budget requests and presenting a budget recommendation to be considered by the full Legislature. The primary constitutional duty of the Legislature is to pass the state budget. Due to the workload of the committee, it meets every afternoon of the week. I hope that my experience and talent gained from the business world will prove useful as we begin our work on the budget process.

Senators will continue with bill introduction for the first ten days of the legislative session. Public hearings, held on every bill introduced, will be held during the afternoons, beginning later this month. Senators will meet in session during the mornings. After every bill has a public hearing, then the Legislature will begin meeting in full-day session.

I want to make you aware of the Legislature’s website, which contains a wealth of information for viewers. You can read biographies on the new senators, review the bills that have been introduced and even watch the Legislature live. The website is nebraskalegislature.gov.

Although I will be in Lincoln for long hours during this 90-day legislative session, which is scheduled to adjourn on June 5, I will still try to attend as many events in the district as I can. If you are ever in the Capitol, make sure to stop by my office. I have moved to Room 2000, which is located on the second floor, north side.

If you have any questions about state government or would like to voice your opinion on a legislative bill, I urge you to contact me. Only with your input, can I truly represent the constituents of District #1. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733. If I am unavailable, my staff will be able to assist you. Tim Freburg is my administrative assistant, who answers the telephone and handles my calendar. Kim Davis is my legislative aide who works on constituent issues and legislation.

LR 444 Committee Update

June 20th, 2014

Legislative Resolution 444 was introduced by the Legislative Performance Audit Committee during the 2014 legislative session. I serve as the vice-chair of this committee.

LR 444 created the Tax Incentive Evaluation Committee, which was tasked with developing recommendations on specific and measurable goals for our tax incentive programs. Furthermore, the committee is to recommend a process for regular evaluation of tax incentives and determine who should conduct the evaluations, what type of metrics should be used, and how often the evaluations should be conducted. The committee is to issue a report to the Executive Board of the Legislature by December 15.

A report issued by the Audit Office in 2013 on Nebraska Tax Incentive Programs found that the program goals expressed by the Legislature were too general to permit a meaningful evaluation of whether the programs were accomplishing what the Legislature intended them to accomplish. The audit focused on the Nebraska Advantage Act, the Nebraska Advantage Rural Development Act, the Nebraska Advantage Microenterprise Act, and the Nebraska Advantage Research and Development Act. Furthermore, for two of the programs, the Legislature set no limit on the program’s costs. In response to the Audit’s findings, the Performance Audit Committee committed to work with the Revenue Committee to initiate a comprehensive review of Nebraska’s tax incentive programs to assess whether the programs are producing the results the Legislature intended and, if so, whether they are doing so at a cost the Legislature can support. As a result, LR 444 was introduced.

The LR 444 Tax Incentive Evaluation Committee met this past week. I was elected vice-chair of the committee, which is chaired by Senator John Harms of Scottsbluff. Robert Zahradnik, from the Pew Center of the States, developed a presentation, which was delivered by Martha Carter, the Legislative Auditor. Mr. Zahradnik will attend the next committee meeting in July.

The six tax incentive programs that LR 444 specifically addresses are:

+Angel Investment Act – provides refundable state income tax credits to qualified

investors that invest in qualified early-stage companies.

+Beginning Farmer Tax Credit Act – rewards agricultural asset owners for their contributions that assist starting farmers and ranchers.

+Nebraska Advantage Act – provides comprehensive economic development incentives for expanding or relocating businesses.

+Nebraska Advantage Rural Development Act – similar to the Advantage Act but aimed at businesses in less populated counties.

+Nebraska Advantage Microenterprise Act – provides persons actively involved in microbusinesses a refundable individual income tax credit based on demonstrated growth of their business over two tax years.

+Nebraska Advantage Research and Development Act – provides tax credits to business firms that incur research and experimental expenditures.

Although this past week’s hearing was limited to invited testimony, the LR 444 Tax Incentive Evaluation Committee plans to hold additional hearings where the public will be allowed to testify. The public hearings will be held in Kearney on August 27 from 1:30 to 4:30 p.m. and in Lincoln from 9:00 a.m. to noon on August 28. I encourage those interested in our state’s tax incentive programs to attend.

Legislative Update

April 3rd, 2014

This past week began with the Legislature being notified of the Governor’s veto of $64 million within the budget bills. The Appropriations Committee met early in the week and developed a package of items that they recommended for override. The Legislature agreed with the Appropriations Committee and voted to override the recommended vetoes.

The Governor had vetoed $7.4 million of the $17.5 million in funding for the Game and Parks Commission. In his veto message, the Governor stressed that the partial funding would still allow for the projects at Ponca State Park and Arbor Lodge State Historical Park. However, the written agreement between the Appropriations Committee and the commission stated that should the committee provide $17.5 million, the commission would be able to further address priority deferred maintenance needs statewide and the undertaking of capital projects at Ponca State Park and priority capital projects at Arbor Lodge State Historical Park to put the existing facilities in a condition that would be conducive to transferring operating and management to a local partner. With the successful override motion, it eliminates any question as to whether the projects will be undertaken.

I joined the Governor at a press conference where he signed legislation offering more than $400 million in tax relief to Nebraskans over the next 5 years. Among the bills the Governor signed was LB 96. This bill will eliminate the sales tax on repair or replacement parts for agricultural machinery and equipment. Nebraska was one of only 8 states that charged sales tax on such items, which created a competitive disadvantage for our farm equipment supply industry, particularly for those located close to the state’s border. LB 905 will increase the Property Tax Credit Program by $25 million, bringing the annual appropriation to $140 million. LB 986 will expand Nebraska’s homestead exemption program so that more Nebraskans qualify, by increasing the limit on household income. LB 850, the bill I introduced to authorize a homestead exemption for individuals with developmental disabilities who meet income and valuation guidelines, was included in LB 986. LB 987 will index Nebraska’s individual income tax brackets for inflation, exempt more social security income from taxation, and provide limited tax exemptions for military retirees. Furthermore, LB 725 contains an additional $33 million in state aid to local school districts.

LB 1098, which would reconstruct the Nebraska Natural Resources Commission, was given first-round approval this past week. The legislation is the result of the work of the Water Funding Task Force during the past interim. The restructured commission would be required to revise their rules and regulations to ensure the funding process follows the ranking and criteria recommendations of the task force.

Several senators are pushing for basin-wide planning to ensure water sustainability and threatened to filibuster LB 1098 if provisions for a state water plan were not included. Others feel that such a proposal favors surface water irrigators at the expense of groundwater irrigators. I feel that statewide water planning is already in place through the work of the Department of Natural Resources and our local NRDs.

The budget bills contain $31 million in funding for water sustainability projects and LB 1098 is the vehicle for the distribution of these funds. Interested parties have pledged to work together on a compromise prior to the second-round of debate. I spoke on the floor of the importance of dealing with water sustainability projects now and not postponing them. The project at Lake McConaughy cost $43.5 million in 1935. Today, that cost would have grown to $695 million.

Although the Legislature has advanced some controversial issues, other legislation hasn’t fared as well. LB 943, which would have increased the minimum wage, failed to receive first-round approval. LB 1058, a bill that would have adopted the Interstate Compact on the Agreement Among the States to Elect the President by National Popular Vote, was pulled from the agenda by its introducer. LB 965, which was intended to encourage more renewable energy development but could have resulted in higher electric rates, was bracketed until the end of session.

As we enter the final days of this legislative session, which is scheduled to adjourn on April 17, I still encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2733 and my email address is dwatermeier@leg.ne.gov.

Legislative Update

March 28th, 2014

With less than ten days left in this legislative session, the Legislature is in the midst of many controversial issues. The budget bills were given final approval this past week. If the Governor uses his authority to line-item veto funding from various programs in the budget bills, the Legislature will have the chance to decide whether to override the items vetoed by the Governor.

LB 916, which would eliminate the integrated practice agreements (IPA) for nurse practitioners, was given first-round approval this past week. In its place, a nurse practitioner would submit evidence of completion of 2,000 hours of practice or a “transition-to-practice agreement”, which requires a nurse practitioner and the supervising provider to practice collaboratively within the framework of their respective scopes of practice. I designated LB 916 as my priority bill because it enhances access to care for all Nebraskans.

Current law requires a nurse practitioner to sign an IPA agreement with a collaborating physician. However, the IPA is not working as intended. Oftentimes, nurse practitioners in rural areas of the state have difficulty securing an IPA. In some cases, physicians may charge a fee to sign the agreement, even though the nurse practitioner may never meet or speak to the physician. The difficulty in finding physicians willing to sign an IPA and the desire to practice independently has prompted nurse practitioners to move to other states. Eighteen other states allow nurse practitioners to practice without an IPA.

For over 30 years, nurse practitioners have provided high-quality, cost-effective care. Nurse practitioners currently diagnose, prescribe, and treat without supervision. Removal of the IPA will not change this, as it is currently within the nurse practitioner’s scope of practice. Collaboration is crucial to successful healthcare and it will continue to exist between nurse practitioners and other health care professionals.

Forty-eight states allow bond financing for road construction. LB 1092 would add Nebraska to the list of states allowed to borrow money to build roads. Committee amendments reduced the amount of bonding authority given to the State Highway Commission from $400 million to $200 million and specified that the interest rate could be no greater than 5%.

Proponents stressed the importance of transportation infrastructure to our state and emphasized that the ability to issue bonds will accelerate the construction of our high priority road projects. Opponents argued that it tied the hands of future legislators and pointed out that Nebraska is top-ranked for their management of finances by a well-known financial magazine, primarily due to our practice to “pay as you go” for roads projects. After eight hours of debate, the motion to invoke cloture and allow for a vote on the advancement of a bill was successful and the bill advanced to the second stage of debate on a 32-14-3 vote.

The Legislature also gave first-round approval to two bills that would increase alternatives to incarceration for nonviolent offenders in an effort to relieve prison overcrowding and avoid the necessity of building another prison. The legislation also works towards better preparing inmates for a successful re-entry into society. As amended, LB 907 would provide funding for vocational and life skills programs within prisons, would expand a successful alternative to prison program for drug offenders, and would expand services for mentally ill inmates and those newly released. The bill also creates a prison reform task force to work with the Council of State Governments, who has successfully helped other states with prison reform. Finally, it would appropriate funding to UNO to continue their work with CSG. LB 999 would appropriate funding to study the feasibility of adding more behavioral health treatment beds.

If you would like to inform me of your opinions on legislation during the final two weeks of this legislative session, I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2733 and my email address is dwatermeier@leg.ne.gov.

Legislative Update

March 21st, 2014

The budget bills were discussed during the second stage of debate this past week. Senator Ernie Chambers offered an amendment to strip $5 million in one-time funding for county jails. A number of county jail facilities in the state have available empty beds. The intent was to temporarily ease current state prison overcrowding by contracting with willing counties to house up to 150 inmates in county jails, while a study is taking place on the feasibility of building a new prison and the Legislature is working with a national organization on alternatives to prison. However, the state’s two most populated counties have indicated that they may not be interested in taking state prisoners, since their facilities are not designed for long-term prisoners and due to funding concerns. The amendment offered by Senator Chambers failed on a 16-22-11 vote. Following the adoption of a technical amendment, the budget bills were given second-round approval.

The Legislature debated LB 887, the Wellness in Nebraska Act, this past week. The Affordable Care Act, proposed by President Obama, was passed into law on the federal level in 2010. Due to a Supreme Court ruling, the mandatory provision requiring Medicaid expansion became voluntary for the states. LB 887 proposed to expand Medicaid in Nebraska by increasing eligibility for Medicaid coverage to adults ages 19-64, with incomes at or below 133% of federal poverty level, regardless of whether they have dependent children. Currently eligibility for Medicaid is limited to low-income children, pregnant women, parents with Aid to Dependent Children, and the disabled, blind and elderly. The federal government has pledged to pay 100% of the costs of expansion for the first 3 years, with the federal share dropping to 90% by 2020. However, this does not apply to administrative costs, which are shared by the state and federal government.

Proponents of the bill stressed the importance of providing access to health insurance to all Nebraskans. Currently, those with incomes between 100% and 400% of the federal poverty level qualify for federal subsidies when purchasing insurance. Nebraskans with incomes below 100% of the federal poverty level do not qualify for any assistance, unless they meet current qualifications. Other senators pointed out that if LB 887 were to pass, 1 in 5 Nebraskans would be on Medicaid. They were also concerned with the future financial burden the expansion could place on the state, as the number of those eligible and the projected cost estimates varied significantly, reiterating the uncertainty surrounding the Affordable Care Act.

After 8 hours of debate on LB 887, Senator Kathy Campbell, the sponsor of the legislation and the chair of the Health and Human Services Committee, offered a motion for cloture. A successful cloture motion requires 33 votes. It immediately cuts off debate, allowing for a vote on the pending amendment and the advancement of the bill. However, the motion to invoke cloture failed, falling 6 votes short with a 27-21-1 vote. Due to the unsuccessful cloture motion, LB 887 will not be debated again this year.

Senator Jim Scheer of Norfolk prioritized a bill that would require any school district with fewer than 650 students to form an allied system with at least three other school districts. Although the school districts within the allied system would not have had to combine revenue, spending, taxation or state aid, they would have been required to have the same yearly calendar and daily schedule. The intent behind the bill was to enable smaller school districts to use modern technology to expand course offerings and educational opportunities for students. Senator Scheer pulled his bill from consideration after the major education organizations united in their opposition to the mandatory nature of the bill.

In addition to increasing the Property Tax Credit program, expanding the Homestead Exemption program, adjusting income tax brackets for inflation and shielding more social security income from taxes, which I mentioned last week, the Legislature also addressed the taxation of military retirement benefits. A proposal was initially approved this past week that would allow military retirees to elect to either exempt 40% of military retirement benefits for 7 years after the date of separation or to exempt 15% of military retirement beginning at age 67. Nebraska is one of only 8 states that provides no tax exemption for military benefits.

As the Legislature enters the final few weeks of this legislative session, I still encourage you to contact me with your thoughts and opinions on the legislation that is before us. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.

Legislative Update

March 13th, 2014

The Legislature gave first-round approval to the budget bills that make adjustments to the biennial budget passed last year. The Appropriations Committee’s recommendations result in a net increase of $27,739 over the two-year period. However, this does not take into account other legislation with a fiscal impact. If all bills pending on the second and third stage of debate would happen to pass, spending would grow by approximately $44.5 million.

The Appropriations Committee’s budget recommendations included funding for increased costs due to prison overcrowding, funding to serve additional persons with developmental disabilities that are on the waiting list, increased funding for grants for the early childhood education program, and increased funding for our Medicaid match rate, due to a lower federal match rate, which is calculated based on a comparison of our personal per capita income compared with other states. These increased costs were almost entirely offset by reductions in expenses, such as lower costs than projected for the homestead exemption program and the state aid formula for schools.

Bills pending that could increase the spending above the Appropriations Committee’s recommendations include LB 725, which proposes to move the scheduled decrease in the local effort rate (LER) in the school state aid formula up one year. The LER was increased during the budget cutting years of the recession. LB 725 would add approximately $33 million to the budget. LB 986 proposes to increase the number of people that qualify for the homestead exemption by raising the income brackets.

Under the Appropriations Committee’s recommendations, the projected ending balance of the cash reserve fund is $697 million. Committee members made it a priority to leave a sufficient amount in the cash reserve fund, as this is what helped sustain our state during the recent recession, preventing the necessity of raising taxes when revenues fell. Furthermore, the committee emphasized that any use of the cash reserve fund should be for one-time items and not for projects requiring on-going support.

The Appropriations Committee recommended $65 million in transfers from the cash reserve fund. This includes $20 million for water projects, $15 million to state parks, $10 million for job training, $5 million to county jails to ease the burden of prison overcrowding, and $15 million for improvements at the State Capitol, including the replacement of the HVAC system, which is 50 years old and has outlived its predicted lifespan.

During debate on the budget bills, Senator Galen Hadley, chair of the Revenue Committee, offered an amendment to increase funding for the Property Tax Credit program by $20 million, in addition to the $25 million already proposed by the Appropriations Committee. His amendment lost on a 20-18 vote. The Property Tax Credit program was enacted in 2007 and has been funded at $115 million annually since 2008. Currently, a homeowner receives a $60.88 credit per $100,000 of value. The credit will increase to $74.11 under the committee’s proposal, but would have increased to $84.70 per $100,000 of value if the amendment would have been successful.

In addition to the property tax relief offered through the increase in the Property Tax Credit program and an expansion of the Homestead Exemption Program, the Legislature also gave first round approval to LB 987. This bill proposes to adjust individual income tax brackets for inflation and increases the number of persons who won’t be liable for income taxes on their social security income.

With approximately a month left in this legislative session, I encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.