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March 21, 2017
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Sen. Watermeier invites students to youth legislature
High school students are invited to take on the role of state senators at the Unicameral Youth Legislature June 11-14. At the State Capitol, student senators will sponsor bills, conduct committee hearings, debate legislation and discover the unique process of the nation’s only unicameral.
The Unicameral Youth Legislature gives behind-the-scenes access to students who have an interest in public office, government, politics, law, public policy, debate or public speaking. Students will learn about the inner workings of the Legislature directly from senators and staff.
Registrants are encouraged to apply for a Greg Adams Civic Scholarship award, which covers the full cost of admission. Applicants must submit a short essay. Other $100 scholarships are also available.
The Office of the Clerk of the Nebraska Legislature coordinates the Unicameral Youth Legislature. The University of Nebraska–Lincoln’s Extension 4-H Youth Development Office coordinates housing and recreational activities as part of the Big Red Summer Camps program.
To learn more about the program, go to www.NebraskaLegislature.gov/uyl or call (402) 471-2788. The deadline for registration is May 15.
I have been appointed to chair a Special Committee of the Legislature to hear a challenge to Senator Ernie Chambers’ qualifications to represent his legislative district. The challenger unsuccessfully ran against Senator Chambers in the general election. He then filed a qualification challenge, as allowed by state law and legislative rules, questioning whether Senator Chambers has satisfied the Nebraska Constitution’s residency requirement.
The Special Committee is made up of seven legislators, including myself. The committee hired outside legal counsel, former Supreme Court Judge William Connolly. At our first meeting, the Special Committee discussed jurisdictional issues and determined that the challenger had met all statutory requirements for filing his challenge. A second meeting was held to approve an order regarding procedures for the hearing on the merits of the challenge and to set the hearing date. The hearing is scheduled for April 7th in the State Capitol.
I introduced LB 46 to authorize the Department of Motor Vehicles to design “Choose Life” license plates. The design is to reflect support for the protection of Nebraska’s children. Choose Life license plates, which allow motorists to show support for pregnant mothers and the unborn, are available in 29 states. The additional revenue brought in through the sale of the plates would be used to supplement federal funds available for the Temporary Assistance for Needy Families program. TANF provides cash assistance to low-income families with minor children and is used to pay for family living expenses, such as rent, utilities, food, clothing and other necessities. LB 46 was given second-round approval this week and is now ready for final reading.
The Appropriations Committee, on which I serve, has completed the public hearing process on all bills referred to the committee, and has heard from state agencies. We will now begin post-hearing budget reviews. Our final recommendations are due to the entire Legislature by the 70th legislative day, which falls on April 24 of this year.
Farm profits in Nebraska were expected to fall to just over $4 billion in 2016, down from a high of approximately $7.5 billion in 2013. The valuation of agricultural land is beginning to decrease but not to the extent that farm income has fallen. A local economist recently noted that local taxing authorities have continued to increase property taxes on farmland, even with sharply lower farm income. Between 2013 and 2014, assessed values of farmland for a 10-state rural region increased by 11.4%, while farm earnings fell by 18%. During this time, local governments increased K-12 school spending per student by a median 3.3%, with Nebraska showing a 7.3% increase, the highest among the 10 states.
This illustrates the critical need to decrease property taxes, yet some senators in the Legislature and the Governor are still focusing on income tax relief, as well as property tax relief. The only way I could support any income tax relief is if we offered $10 of property tax relief for every $1 of income tax relief. However, the feasibility of offering any tax relief will depend on budget negotiations, as the state is facing a $1 billion shortfall. The Appropriations Committee is in the process of cutting spending significantly, something that also must be done on the local level. These cuts are difficult to make but the alternative is an increase in taxes.
As the public hearing process nears completion and the Legislature discusses bills with priority status, I encourage you to inform me of your opinions. 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.
This past week was overshadowed by an incident at Tecumseh State Correctional Institution. Unfortunately, two inmates lost their lives. Two years ago, an incident escalated into a riot on Mother’s Day. On Thursday, staff were able to quickly bring the situation under control and no staff were hurt. Although we still have a long road ahead, I see the procedural improvements that staff have implemented. I commend the employees at TSCI and other state institutions for their commitment to work in our correctional system, as their job is dangerous, but very important. I also want to recognize the Johnson County Sheriff, the fire and rescue squad, and the county attorney who are also highly involved during these situations. I was able to visit with some employees the night of the incident and saw first-hand their determination in keeping the public safe.
LB 45 authorizes military honor plates for reservists. I introduced this bill at the request of a constituent who served for 10 years as an army reservist and had a service-connected injury. He was surprised to find out that he did not qualify for the military honor plates. LB 45 was passed by the Legislature on Friday on a vote of 46-1.
LB 46, authorizing the creation of Choose Life license plates, received first-round approval this past week from the Legislature. The Department of Motor Vehicles would create a design reflecting support for the protection of Nebraska’s children. Twenty-nine other states allow motorists to show their support for pregnant women and the unborn through the purchase of such plates.
I introduced LB 545 before the Appropriations Committee this past week. This bill would increase the appropriation to the Property Tax Credit program by $200 million per year in each of the next three years. The property tax relief offered through this program appears on every taxpayer’s property tax statement. LB 545 would increase the current annual appropriation of $224 million to $824 million.
Of the combined revenue used for governmental services, property taxes currently account for approximately 48%, income taxes 33%, and sales taxes 19%. In 2000, property taxes accounted for 42%, income taxes 35%, and sales tax 23% of total revenue for government services. Since that time, the share of revenue from the sales tax has decreased, the share of revenue from the income tax has decreased, but the share of revenue from the property tax has increased significantly. LB 545 is projected to lower the share of the tax burden from property taxes to approximately 40%, more evenly balancing the revenue streams.
Our last major tax reform 25 years ago increased state aid to schools significantly in an effort to decrease our reliance on property taxes to fund our public schools. One problem associated with this type of property tax relief is whether it results in dollar for dollar tax relief or if it allows for increased spending. By increasing the funding to the Property Tax Credit program, it truly does provide dollar for dollar property tax relief.
Nebraskans pay the 7th highest property taxes in the country. Over the last 10 years, the valuation of agricultural land has increased 176%, compared to a 35% increase in residential valuation. Nebraska farmers and ranchers represent less than 3% of the state’s population but pay more than 30% of the total property taxes collected statewide. In the majority of the state, agricultural land comprises more than 60% of a school district’s total valuation base. Rural landowners are disproportionately funding our rural school districts, even though all residents of the school district benefit equally from having their children educated in our public schools. Even though valuation of agricultural land has increased substantially more than other classifications of land, all property taxes are too high.
The Legislature is also facing a significant shortfall in the budget for the next two years. We are in the midst of cutting funding for government agencies and services. Although it will be difficult, I think we must also address property taxes. Legislation has been introduced to broaden the base of the sales tax. I am opposed to a tax increase, but am open to a redistribution of funding in order to offer property tax relief.
As senators and committees finish up the process of selecting their priority bills for this session, I encourage you to contact me with your thoughts and opinions on this legislation. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509.
I introduced LB 547 before the Natural Resources Committee this past week. This bill is an extension of legislation that was passed last year, in which we removed a public power district’s authority to use eminent domain to take over renewable electricity generation projects. LB 547 would remove a public power district’s authority to use eminent domain over all types of privately owned and operated electricity generation and transmission projects. The legislation does not alter a public power district’s current authority to build its own generation and transmission.
I introduced this bill for economic development reasons. I believe economic development is very important in our state’s welfare. It seems counter-productive that private capital must look outside our state for electricity generation projects, thereby preventing our state from benefitting from the increased jobs, increased property tax revenue, and increased income taxes.
The argument is that Nebraska already has an excess of electricity. However, since our state has joined the Southwest Power Pool (SPP), it is now the SPP that collects all the generation in its 14-state territory, deciding how much generation its transmission system can handle and dispatching the lowest-priced energy first. The SPP has 45,000 megawatts of pending generation interconnection requests – which is about 6 times more than the 7,000 megawatts of generation that our entire state has right now. If other states don’t have eminent domain authority, those states will appear more business-friendly to private companies. Since SPP operates an integrated market, any new generation will compete with Nebraska’s public power system – whether it is within or outside of our state. If the new generation is going to happen anyway, I feel that it is in Nebraska’s best interest to promote economic development within our state.
My intent is not to harm our current public power system, as it has worked well in the past, but to plan for the future. The environment has changed since Nebraska joined the SPP. Consequently, we must work together on what is best for Nebraska ratepayers. I am looking forward to working with the industry in the partnership of the Legislature and public power.
The public hearings were held on LB 312 and LB 313 this week before the Revenue Committee. These bills were backed by the Nebraska Ag Leaders Working Group, which is composed of the Nebraska Farm Bureau, Nebraska Cattlemen, Nebraska Pork Producers Association, Nebraska Corn Growers Association, Nebraska Soybean Association, and Nebraska State Dairy Association.
These organizations look at the bills as a way to better balance the three-legged stool, symbolizing the three sources of revenue to fund government services, by increasing revenue from the sales tax and using it to decrease the reliance on property taxes.
LB 312 would impose sales tax on additional services, such as the repair or maintenance of motor vehicles, pet related services, lawn care, and personal care services (hair care, massage, nail and spa services). The legislation would also remove the sales tax exemption on such things as school lunches, admissions to school events, soda pop, candy, and lottery tickets. LB 313 would increase the state sales tax rate from 5.5% to 6.5%. In an effort to reduce the impact of the sales tax increase on the lower income, both bills would increase the earned income tax credit to 17% of the federal credit, with the remainder of the increased revenue dedicated for property tax relief. It is projected that both of the bills combined would generate more than $500 million annually for property tax relief.
Senators and committees have begun to select their priority bills, which will now be debated ahead of bills without priority status. I encourage you to contact me with your thoughts and opinions on legislation. 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 firstname.lastname@example.org.
This past week the Legislature passed and the Governor signed the budget adjustment bill for the current year. Governor Ricketts noted his appreciation of the Legislature’s swift action and that LB 22 is an important first step toward addressing the gap between appropriations and revenues. LB 22 contained $137 million in budget cuts, thereby lowering the $900 million budget gap projected for the end of the next biennium. The Appropriations Committee, on which I serve, is currently working on the budget for the next two years.
A controversial bill to allow school vouchers was heard before the Education Committee this past week. LB 608 would allow K-12 students to qualify for a scholarship to enroll in a private school if the student resides in a public school district which is at the lowest performance level established by the Nebraska State Board of Education’s accountability system. There are currently 86 school districts in the “needs improvement” category. The scholarship amount would equal 75% of the anticipated revenue per student the resident school district would receive. The resident school district would also be responsible for transportation. Resident school districts are to establish property tax relief funds with the other 25% of the anticipated revenue per student. If 10% of students participated in the scholarship program, approximately $23.5 million would be transferred annually from public schools to private schools for the education of these students.
Proponents of LB 608 testified at the public hearing that the bill would give students from lower income families the same opportunities that exist for wealthier families. Although students already have the option to attend a different public school than their resident school district under the option enrollment program, examples were given of school districts that were at capacity and wouldn’t accept additional students. Opponents warned that the program would harm our public school system, questioning whether school expenses would drop proportionately with the lower enrollment. They also questioned the constitutionality of the proposal, as it relates to using public funds for private schools, as well as the use of public money in private schools without the same accountability requirements. Furthermore, opponents pointed out that the bill would allow any student, regardless of their family’s income level or whether they were already attending a private school, to qualify for the scholarship.
Craft breweries are gaining popularity across the country, as well as in Nebraska. They produce their product locally and offer great potential for economic development across the state. Last year, a compromise was reached, allowing a licensee to operate up to five retail locations (or taprooms). Among other things, LB 632 would require that there be production at each of those five locations. The legislation also requires craft breweries to transport their beer to a distributor’s warehouse before delivery, as is the requirement for other types of beer such as Budweiser and Coors. This causes a hardship for locally produced beer. Craft brewery owners and supporters appeared in full force at the public hearing and are working to overcome the influence of the beer distributers. Senator Tyson Larson, the sponsor of LB 632 and the chair of the General Affairs Committee, stated that this change was necessary in order to avoid a lawsuit from out-of-state beer companies for unequal treatment.
I introduced a bill before the Judiciary Committee this past week, on behalf of Chief Justice of the Nebraska Supreme Court, Mike Heavican. LB 544 would provide for a local option for consolidation of administrative duties when a vacancy occurs in the Office of the Clerk of the District Court or when an incumbent Clerk of the District Court decides not to seek re-election. Instead of requiring a general election vote of the people to eliminate this office, which doesn’t work well logistically with the election process, LB 544 would allow the county board to make this decision. If the county board would decide to eliminate this elected position, the county board would enter into an agreement with the State Court Administrator to allow the Clerk Magistrate to fulfill the duties of the Clerk of the District Court. The employees of the Clerk of the District Court would become state employees. Nebraska was awarded a State Justice Institute Technical Assistance grant, allowing the National Center for State Courts to conduct an evaluation of county and district clerk’s offices. This report was the basis for LB 544.
Corey Steel, the Nebraska State Court Administrator, testified that Nebraska currently has a two-tiered clerk system. The majority of the court operations have been moved from the county to the state, with only the Clerk of the District Court’s office remaining as county employees. He testified that several counties have asked for the ability to consolidate, in an effort to operate more efficiently and effectively. Although this consolidation would remain a county decision and no person currently serving as Clerk of the District Court would lose their job, many Clerks of the District Court testified in opposition to LB 544.
The Legislature has passed the one-third mark of this legislative session. As we begin the next two-thirds, I encourage you to contact me with your thoughts and opinions on legislation before us. 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 email@example.com.
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.