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Tax reform was recently enacted on the federal level. Because Nebraska’s state income tax is tied to the federal tax code, the Nebraska Department of Revenue estimated that the state would experience an increase in state revenue of more than $200 million. In order to compensate for the effects of the federal tax changes so that taxpayers are not faced with a state tax increase, two bills were introduced to adjust Nebraska’s tax code.
LB 1090, introduced by Papillion Senator Jim Smith, the chair of the Revenue Committee, would restore the $134 personal exemption credit that was effectively eliminated by the federal Tax and Jobs Act and would establish a Nebraska standard deduction, ranging from $6,750 for single filers to $13,500 for married couples filing jointly. The legislation also retains the current method used to index for inflation, rather than using the federal method which grows somewhat more slowly.
LB 1048, introduced by Omaha Senator Burke Harr, also preserves the personal exemption on the state level. However, only individuals with income of no more than $100,000 and married couples filing jointly with income of no more than $200,000 would qualify. A public hearing before the Revenue Committee was held last week on both bills. At this time, the committee has not taken action on either bill.
This past week, I introduced LB 861 before the Appropriations Committee. It would require the state to pick up the costs of prosecution for a single incident occurring in a state correctional institution, such as the Mother’s Day riot, once costs exceed the threshold amount for a county. The legislation sets the threshold amount at 2 ½ cents per $100 dollars of taxable valuation, meaning that for Johnson County, the state would pick up costs in excess of approximately $225,000. It does not seem fair for counties, particularly smaller counties such as Johnson County, to have to bear the exorbitant defense costs that could arise for an incident at a state correctional facility, when the inmates charged with crimes are from throughout the state and none are originally residents of the county. A Johnson County Commissioner testified in support of LB 861 and another commissioner, as well as the county attorney, submitted letters in support.
The Appropriations Committee held a public hearing on the budget for the University of Nebraska this past week. The room was packed with University supporters who testified for more than 4 hours against the 2% and 4% across-the-board cuts, as proposed by the Governor. The cuts would amount to an additional $11.5 million reduction in funding for the current fiscal year and $23 million next fiscal year, on top of previous cuts already imposed on the University. The University has argued that they receive 13% of the state’s general fund, but their cuts amount to 34% of the total cuts proposed by the governor on state government. This is because some agencies, such as Corrections, were held harmless from cuts this biennium. Therefore, the agencies receiving cuts were treated equally.
Earlier this week, the University announced $9.2 million in potential cuts that could become reality if the governor’s proposal is adopted by the Legislature. The cuts include reducing the Rural Futures Institute, closing the Haskell Ag Lab in Concord, eliminating electronics engineering, art history, and geography majors at UNL; eliminating Monroe-Meyer Institute developmental neuroscience division programs and the master of forensic science program at UNMC; eliminating the Career Development Office in the College of Business at UNO; and eliminating men’s tennis, golf and baseball at UNK. Testifiers at the hearing feared that if the University increased tuition further than already recommended, it could make college unaffordable for some students.
High school students interested in government are encouraged to register for the 2018 Unicameral Youth Legislature, which will be held June 10-13. The 4-day legislative simulation is conducted at the State Capitol. Student senators will sponsor bills, conduct committee hearings, debate legislation and learn about our unique unicameral. Registrants are encouraged to apply for a Speaker Greg Adams Civic Scholarship award, which covers tuition. More information can be found at www.Nebraskalegislature.gov/uyl.
Again, I’d like to encourage your input on issues before the Legislature. I can be reached at email@example.com and my telephone number is (402) 471-2733. My mailing address is District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509.