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Two bills introduced at the request of the Governor were heard before the Revenue Committee in a lengthy hearing this past week. LB 337 was introduced by Senator Jim Smith, who serves as the Revenue Committee chair. It would phase in an income tax reduction for those in the top income bracket. The top bracket would be lowered from 6.84 percent to 5.99 percent over an eight-year period, or by approximately 0.11 percent a year. However, the decrease would only be triggered if the expected rate of growth in net General Fund receipts, as determined by the Nebraska Economic Forecasting Advisory Board’s October forecast, is 3.5 percent or greater. When fully implemented, LB 337 would reduce state revenue by $288 million.
Testifiers representing the business community offered support for the legislation, claiming that LB 337 will help grow the state. Opponents wanted the Legislature to focus on property tax relief and others expressed concern that LB 337 could have a negative impact on funding for local schools and other governmental services.
In October 2015, the Forecasting Advisory Board projected a 3.6 percent growth in revenue, which would have triggered a tax cut in 2016, if LB 337 would have been in effect. However, projections quickly dropped, as the state is now facing a projected $900 million shortfall.
LB 338 was introduced by Senator Lydia Brasch, the Agriculture Committee chair, at the request of the Governor. It creates the Agricultural Valuation Fairness Act. Rather than valuating agricultural land according to sales, which can be influenced by other uses for the land, the bill proposes to assess agricultural land based on its capacity to produce income. LB 338 also places a 3.5 percent cap on increases in valuation of such land from year to year. Under the bill, county assessors are to use a range of incomes for land capability groups and capitalization rates, as determined by the Property Tax Administrator, in calculating the agricultural use value. The income ranges are to be based on the average yield information for the ten prior years published by the U.S. Department of Agriculture.
Although most testifiers were in support of LB 338 and felt that it was a step in the right direction, concern was expressed that it didn’t go far enough in efforts to provide property tax relief. According to an analysis by Nebraska Farm Bureau, if LB 338 would have been in place in 2017, taxable values for agricultural land would have been $2.2 billion lower statewide. This equates to an approximate 2 percent reduction in agricultural land values or about a $20 million reduction out of $3.8 billion in property taxes levied statewide. Agricultural land values statewide increased more than 6 percent from 2015 to 2016 and more than 263 percent over the last decade.
LB 661, introduced by Heartwell Senator John Kuehn, was heard by the Government, Military and Veterans Affairs Committee. This legislation seeks to amend public records laws by providing confidentiality of information relating to the drugs used in carrying out the death penalty. Following the November vote to reinstate the death penalty, the Department of Corrections recently revised the lethal injection protocol in an effort to add flexibility so that the death penalty can be carried out. Originally, the revised protocol authorized the supplier of lethal injection drugs to remain confidential, but this portion was removed after the public hearing where testifiers criticized the secrecy and lack of transparency in the process. This bill seeks to reinstate the confidentiality provision. When introducing the bill, Senator Kuehn mentioned that some of the same drugs used in lethal injections are used in operating rooms, causing him concern about their availability if this bill is not passed. Fifteen of the thirty-one states that have the death penalty withhold information on the identities of those supplying the lethal injection drugs.
This past week before the Revenue Committee, I introduced LB 546 at the request of the Nebraska Department of Revenue and the Nebraska Department of Economic Development. The intent of the bill is to simplify the application and administrative aspects of the Nebraska Advantage Act by amending several areas of the current law that has caused delays in approval of applications and benefits earned under this tax incentive program.
Rob Clements, a banker from Elmwood, was selected by Governor Ricketts this past week to fill the vacancy of Senator Bill Kintner. His district covers all of Cass County, a portion of Sarpy County, and the northeast corner of Otoe County. I look forward to working with him on state issues, as well as issues concerning Otoe County.
As legislative committees continue with public hearings on bills, I encourage you to contact me with your comments and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
The Legislature gave first-round approval to a budget bill adjusting the current year’s budget. During the ninety day session, typically senators work on the next biennial budget. Due to the large projected budget shortfall of approximately $900 million, the Governor submitted two proposals to the Legislature, one to make adjustments to the current year’s budget, with the intent of getting it passed early in the legislative session, and the other for the next biennial budget. The Appropriations Committee began work immediately on LB 22 and advanced the bill to General File on January 27, thereby giving the Legislature a jump start on addressing the shortfall.
LB 22 was introduced by Speaker Scheer, at the request of the Governor. It contained a series of specific and across-the-board cuts for fiscal year 2016-17, as well as capturing some unexpended balances that were re-appropriated to state agencies. It contained $151 million in cuts, for a total of $276 million in budget reductions, when including other items such as a $92 million transfer from the cash reserve fund.
The Appropriations Committee restored some funding for service providers for people with developmental disabilities, the University of Nebraska, and for justice reinvestment within the Supreme Court, thereby lowering the cuts to $137 million. The committee focused on the reduction of appropriations, noting that the transfer from the cash reserve can be deferred until consideration of the biennial budget.
After hours of debate discussing the proposed cuts and whether the governor should have instead called a special session last year to deal with the budget adjustments in the current fiscal year, senators approved the Appropriations Committee amendments and advanced LB 22 on a 46-1 vote. This debate took place in the mornings while the entire Legislature was in session. The Appropriations Committee continues to meet in the afternoons, now working on the budget for the next two years. The Appropriations Committee must report their recommendations for the next biennial budget to the entire Legislature by April 24.
The public hearing was held this past week before the Government, Military and Veterans Affairs Committee on Legislative Resolution 6, introduced by Crete Senator Laura Ebke. LR 6 proposes to apply to Congress, as allowed under Article V of the U.S. Constitution, to call a convention of the states. The convention of states would be limited to proposing constitutional amendments to impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and limit the terms of office for its officials and members of Congress. Thirty-four states must make application on the same subject before a convention could be held. As I understand, eight states have passed identical resolutions and similar language is pending in at least thirty states. If a convention of states were to be held, three-fourths of the states, or thirty-eight states, would have to ratify the proposals before they could become part of the U.S. Constitution.
A similar proposal introduced two years ago failed to receive approval from the Legislature, after a motion sent it back to committee. I signed on as a co-sponsor two years ago and again this year on LR 6. With the number of new senators elected in November, LR 6 may have a better chance for success.
As the Legislature works on issues related to tax reform, I hear from many constituents on the need for property tax relief. I hear little concern over income tax rates. However, the Governor and the chair of the Revenue Committee, are strongly pushing for income tax relief. I would welcome your comments. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is email@example.com and my telephone number is (402) 471-2733.
Six hundred sixty-seven bills and 5 proposed constitutional amendments were introduced during the bill introduction period, which is the first 10 days of the legislative session. This is close in number to the 655 bills that were introduced in both 2015 and 2013. I introduced 17 bills, ranging in subject matter from property tax relief to economic development.
The Legislature began discussing permanent rules this week. A rule containing a new technology use policy was approved. Although the Rules Committee did not vote to advance a proposed rule to change the method of selecting committee chairs from secret ballot to voice vote, an individual senator may still make such an attempt when the rules debate continues next week.
The Chief Justice of the Supreme Court, Mike Heavican, presented his State of the Judiciary address to the Legislature this past week. He touched on some of the challenges before the courts, including the lack of young lawyers in rural areas, which carries over to difficulty in filling judicial vacancies. He applauded the Legislature for the debt forgiveness plan for rural legal services passed in 2014. Chief Justice Heavican also noted the challenge of the increased need for interpreters so that involved parties can understand what is happening in our courtrooms. Much of his speech focused on justice reinvestment. Legislation was recently passed encouraging alternatives to incarceration in an effort to deal with the overcrowding problem in our prisons. However, proposed budget cuts suggested by the governor would reduce the number of probation officers and decrease funding for drug treatment. He warned the Legislature that if judges can’t be assured that probation is able to adequately supervise and rehabilitate offenders, they will choose incarceration. The chief justice pointed out that incarceration costs $35,000 for a prisoner compared with costs ranging from $3,000 to $10,000 to supervise an offender on probation.
The public hearing process began this week. In the Nebraska Legislature, every bill is guaranteed a public hearing, allowing Nebraskans to voice their opinion on the legislation introduced by senators.
I had three bills up for public hearing this past week. The first was LB 45, which would allow non-federalized reservists to be eligible for military honor license plates. I introduced this bill upon request of a constituent who had served in the army reserve for 10 years and had a service-connected injury. He was surprised to find out that he did not qualify for the plates. Under current law, members of the reserve must serve on active duty before they are eligible for a military license plate. Basic training or job training does not make them eligible. With the expanded eligibility proposed under LB 45, a reservist companion plate would be created for the current categories of U.S. Army, Navy, Marine Corps, Coast Guard and Air Force plates. The National Guard is already a reserve unit, so it doesn’t need a separate reservist plate.
LB 46, also a license plate bill, would provide for “Choose Life” license plates. The design is to reflect support for the protection of Nebraska’s children. Such plates would be available as alphanumeric or personalized message plates, with a maximum of 5 characters. A $5 fee would accompany the alphanumeric plates, which would be credited to the Nebraska Child Abuse Prevention Fund. For message plates, 75% of the $40 fee would be credited to the fund. This fund is used to award grants to agencies, organizations, and individuals for community-based child abuse prevention programs. The majority of states offer the option of “Choose Life” license plates, which allow motorists to express their support for pregnant women and the unborn.
LB 47 was introduced as a result of an interim study on unfunded mandates. Currently, counties are financially responsible for the costs of an autopsy, grand jury payments and witness compensation when there is a death of an incarcerated person. LB 47 seeks to transfer these costs from the county to the state for inmates that die while serving a sentence in a state correctional institution. I decided to introduce this bill since the Tecumseh State Correctional Institution is located in Johnson County, and it would help with some of their expenses. Johnson County must cover these expenses, even though the prisoners that have died at TSCI were not from nor arrested in Johnson County.
The Transportation and Telecommunications Committee has already advanced LB 45 and LB 46 from committee, and these bills will be discussed by the entire Legislature in the near future. LB 47 remains in the Judiciary Committee.
As the Legislature continues its work, I encourage you to contact me with your opinions of the legislation that has been introduced. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
Governor Ricketts delivered his State of the State Address this past week. It serves as the starting point for the Appropriations committee’s work on the next biennial budget.
In his speech, the Governor recognized our unique, nonpartisan Unicameral, where the Legislature consistently passes a balanced budget on time, every bill gets a hearing, and debate happens in the public, not behind a closed door conference committee. Governor Ricketts also touched on his accomplishments during his first two years in office, including online applications for permits through the Nebraska Department of Environmental Quality, improving call wait times and application processing for citizens applying for benefits with the Department of Health and Human Services, and the development of a reemployment program under the Department of Labor.
Governor Ricketts outlined the principles that guided his budget recommendations. He stressed that we must reduce government expenditures because he will not support any increase in taxes to deal with the nearly $900 million projected budget gap. In balancing the budget, the governor wants to maintain an approximate $500 million balance in the cash reserve.
If the governor’s proposal for deficits in the current fiscal year is approved, the budget for the next biennium would result in an average 1.7% increase in state spending. Realizing that there are certain priorities that need to be funded, the Governor revealed his intent to increase funding for special education and for TEEOSA aid to K-12 schools, as well as the Department of Corrections, in an attempt to reduce employee vacancy rates, upgrade technology, and improve the Lincoln Correctional Center. He proposed cuts in spending for virtually every other agency and service.
The Governor’s budget proposes both property and income tax reform. Property taxes on agricultural land have risen by 176% in the last decade, and cattle and crop prices have dropped. Consequently, the governor has proposed changing the methodology for assessing property value from a market-based system to an income-potential assessment. The governor believes that income potential is a fairer measure and will slow the growth of agricultural land valuation increases, noting that if the system were in place for 2017, it would have reduced agricultural land valuations by approximately $2.2 billion. Agriculture Chair Lydia Brasch has introduced LB 338, the Agricultural Valuation Fairness Act, at the request of the governor. Several of our neighboring states, including South Dakota, Kansas, and Iowa also use income potential based property tax assessments.
When speaking of income tax reform, the Governor pointed out that only one of our bordering states has a higher income tax rate. He believes that our high tax rate hampers our ability to grow our state’s economy, discourages new investment, and causes people to leave our state. Under legislation introduced by Senator Jim Smith, the chair of the Revenue Committee, the top income tax rate would be reduced approximately one-tenth of 1% per year, beginning in 2020, if the state’s revenue growth is greater than 3.5%. LB 337, when fully implemented, would reduce the top income tax rate from 6.84% to 5.99%. This reduction in income taxes would apply to individuals making $29,831 or married couples making $59,661.
The governor’s proposal also includes several measures aimed at government efficiency. Through the merger of the Division of Veterans Homes, currently under the Department of Health and Human Services, with the Nebraska Department of Veterans Affairs, services can be streamlined and some red tape eliminated. He also proposes to merge the Department of Roads and the Department of Aeronautics into the Department of Transportation. Furthermore, the governor wants to eliminate unnecessary regulations in occupational licenses, making it easier for people to work and open businesses in Nebraska. He has asked senators to introduce 8 bills, ranging from reducing classroom hours for massage therapists to eliminating a license for auto sellers.
Wednesday, January 18 is the last day for bill introduction. As the Legislature begins the public hearing process, I encourage you to contact me with your thoughts and opinions on legislation that has been introduced. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is email@example.com and my telephone number is (402) 471-2733.
The One Hundred Fifth Legislature, First Session, commenced on Wednesday, January 4th with ceremonial procedures. The newly elected senators were sworn in by the Chief Justice of the Nebraska Supreme Court, Michael Heavican, in front of the chamber filled with family members. Following the ceremonies, senators began the process of voting for committee chairs.
The vote for committee chairs is conducted by secret ballot, a practice that has been in effect for more than 40 years. Proponents claim that it allows the best person for the job to fill the position, while minimizing the ability of the political parties to control the vote. Opponents assert that transparency should be the goal. Although some discussion occurred, no change was made in the election process. However, the discussion may continue when the permanent rules are debated.
The first election was for the Speaker of the Legislature. Norfolk Senator Jim Scheer was elected by the body as Speaker.
After serving as vice chair of the Legislature’s Executive Board, I decided to run for the chair position and was elected to the post. The Executive Board governs the Legislative Council, supervising all legislative services and employees, including the offices of the Clerk of the Legislature, Accounting, Fiscal Analyst, Research, Ombudsman, Performance Audit, and Revisor of Statutes. The Board is also responsible for processing legislation involving subject areas such as constitutional amendments governing the legislative process, legislative candidate eligibility requirements, term limits, and legislative ethics. The Executive Board also serves as the Reference Committee, which refers introduced bills, resolutions, and gubernatorial appointments to the appropriate standing committee according to subject jurisdiction.
I was able to remain on the Appropriations Committee, which develops a recommendation for the biennial budget that is presented to the full Legislature. We will have our work cut out for us, as the state is facing an almost $900 million shortfall at the end of the next biennium.
Speaker Scheer introduced legislation on behalf of Governor Ricketts this week to close the $276 million funding gap in the current biennium ending in June. (The Governor’s proposal for the next biennium will be unveiled on January 12.) The legislation would impose a 4% cut on previous appropriations for most state agencies and a 2.3% cut for the University. State aid to schools, special education funding, the Department of Corrections, and most direct care services and public aid programs within the Nebraska Department of Health and Human Services would be exempt from the budget cuts. The Governor’s plan also seeks to transfer $92 million from the cash reserve and another $20 million from other cash funds. His proposal builds on the recent announcement by Amazon that they will begin collecting sales taxes on Internet purchases in our state. I introduced a bill, LB 44, which seeks to get other online companies without a physical presence in our state to collect and remit the sales tax from internet purchases as well.
Bill introductions will continue through January 18. Public hearings, held on every bill introduced, will begin on January 17.
If you are interested in the Legislature and its activities, please visit our website at nebraskalegislature.gov. You can view newly introduced bills, look at the agenda for the day, review the biographies of the new senators, and even watch the Legislature live.
I encourage you to contact me with your thoughts and opinions on legislation. If I am not available, my staff will be able to assist you. Laura Olson is my administrative assistant, greeting visitors and handling my calendar. She is also serving as the committee clerk for the Executive Board. Kim Davis is my legislative aide, handling legislation and constituent inquiries. Janice Satra serves as the legal counsel for the Executive Board.
If you are in the State Capitol, make sure to drop by my office. I am now in Room 2108, in the southwest corner of the second floor. My mailing address is District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
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.
Sen. Dan Watermeier
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