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Governor Pete Ricketts gave his annual State of the State address this past week. His recommendations, along with the agency requests, will become the starting point as the Appropriations Committee, and then the entire Legislature, determines what mid-biennium budget adjustments need to be made.
To address the lowered revenue forecast projected by the Nebraska Economic Forecasting Advisory Board this past October, the Governor is proposing across-the-board cuts of 2% this fiscal year and 4% next year, as well as specific reductions. He has also recommended transfers of excess fund balances to the General Fund and a $108 million transfer from the cash reserve fund. These budget reductions come on top of significant cuts made last year when the state experienced a budget shortfall in excess of $1 billion. The Governor stressed that the budget was balanced last year without any tax increases, and his recommendations propose to do the same this year.
The Governor stated that the priorities in his budget include funding for K-12 education, Corrections, and services for those with developmental disabilities. He proposed to maintain funding for state school aid and included an additional $35 million to Child Welfare and Public Assistance for this year and next, after noting the 9% increase in the number of children in our child welfare system. He also mentioned the formation of a new child welfare task force to determine the root causes for this increase, such as the high number of parents using methamphetamine. The Governor recommended expanding the number of corrections officers and reinvesting $6 million to expand bed capacity in our prisons.
Growing Nebraska has always been one of the Governor’s top goals, and he emphasized that cutting and reforming taxes is a key factor in meeting this goal. Although the state has provided $840 million in property tax relief over the past four years, the Tax Foundation ranks Nebraska’s property taxes as 11th highest in the nation. Therefore, the Governor stressed that property tax relief was a top priority. To that end, he announced that Revenue Committee chair, Senator Jim Smith, will introduce the Nebraska Property Tax Cuts and Opportunity Act.
LB 947 contains three major components. First, it would eliminate the current Property Tax Credit Program which provides property owners a tax credit based on the valuation of their property and is shown on tax statements as a credit after full taxes are levied. It also proposes to eliminate the recently passed Personal Property Exemption Program. The legislation would use the funding from these two programs for a refundable credit on state income taxes for property taxes paid, which would ensure that Nebraskans, not absentee landowners, receive the credit. It also includes a trigger mechanism to provide for additional property tax relief in future years when actual tax receipts are higher than forecast projections. Next, the legislation permanently reduces the top individual and corporate income tax rate from 6.84% and 7.81%, respectively, to 6.69%. As I understand, the funding from the elimination of the Property Tax Credit Program and the Personal Property Exemption Program would also be used to fund the income tax rate decreases. Finally, the legislation provides an additional $10 million for workforce development.
Senators have been meeting in full day debate this past week, but will begin meeting only in the mornings starting January 16, as public hearings on every bill introduced will be held in the afternoons. January 18, the 10th day of the legislative session, is the last day that bills can be introduced.
I encourage you to contact me with your thoughts and opinions on the legislation that has been introduced. I can be reached at firstname.lastname@example.org. My mailing address is District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509 and my telephone number is (402)471-2733.
The Legislature began meeting in full-day session this past week, following the completion of the public hearing process. The Speaker of the Legislature warned senators of the workload that is ahead of them, with just twenty days left and many priority bills yet to be discussed. Speaker Adams announced that the Legislature will begin working late nights on March 18. Working late is typically around 8:30 p.m., but could be as late as 11:59 p.m.
Legislation requesting funding for water sustainability projects was introduced as a result of work completed by the Nebraska Water Funding Task Force, on which I served this past interim. The Appropriations Committee included $31.4 million for water projects in their recommendations to the Legislature. The proposal includes one-time funding of $20 million from the cash reserve, with $11 million appropriated annually from the general fund. Over the next several years, $10.5 million will be used to complete existing water projects. New water projects will fall under the guidelines proposed as a result of the task force’s work and will require a local match.
LB 1098 reconfigures the Nebraska Natural Resources Commission. The Commission is charged with revising rules and regulations to ensure the funding process establishes and utilizes criteria upon which projects, programs, and activities will be ranked and prioritized according to the water sustainability goals that were recommended by the task force.
LB 1001, which would allow the production, sale, and purchase of industrial hemp in Nebraska, received first-round approval on a 32-1 vote. It would exempt industrial hemp from the Uniform Controlled Substances Act. Hemp is used in materials such as fabric, rope, paper, and construction products. Senators viewed industrial hemp as another crop and source of revenue for farmers and NOT as a gateway to recreational use of marijuana. Hemp contains 1% or less of THC, the mind-altering ingredient found in the cannabis plant. Since cross-pollination would ruin a marijuana crop by lowering the THC levels, it would not be feasible to grow hemp in an effort to hide marijuana plants. The farm bill recently passed by Congress allows state agricultural departments and universities to develop research and evaluate markets in states that have legalized industrial hemp. Therefore, this legislation could open the door for additional research at the university, which could result in economic development opportunities for our state.
I successfully amended LB 850 into LB 986 this past week. LB 850 is the bill that I introduced to allow individuals who have a developmental disability to qualify for the homestead exemption, if they meet certain income and valuation guidelines. LB 986 is a Revenue Committee bill that changes the income guidelines for those qualifying for the homestead exemption, in order to expand eligibility for the program. After the adoption of the amendment, the bill was given first-round approval.
Senators also gave first-round approval to LB 814, which proposes to dedicate the state sales tax revenue derived from the sale or lease of motorboats and personal watercraft for the repair or maintenance of the Game and Parks Commission’s infrastructure. Committee amendments added the provisions of LB 841, which would also dedicate the sales tax revenue on all-terrain vehicles (ATVs) and utility-type vehicles for Game and Parks projects. This would earmark approximately $2.6 million annually for deferred maintenance projects.
The Game and Parks Commission has a $43 million shortfall in deferred maintenance and ADA compliance projects. The commission has had to reduce maintenance, mowing, and trash removal at some state parks and recreational areas. Furthermore, they have temporarily closed some areas, including the Arbor Lodge State Historical Park.
LB 814, as well as the Appropriations Committee’s recommendation for a one-time transfer of $17.5 million for statewide projects (including projects at Ponca State Park and Arbor Lodge), is necessary to help the Game and Parks Commission deal with the serious backlog issue. Our parks are some of the most popular tourist attractions in the state and it is important that they are sufficiently funded and maintained.
As senators work to address priority issues, I 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.
Public hearings were held on five of the bills that I introduced this past week. I also introduced two more bills on behalf of the Legislative Performance Audit Committee, of which I serve as vice-chair.
The public hearing for LB 1033 was held before the Appropriations Committee. The legislation seeks $2.1 million in appropriations for Arbor Lodge State Historical Park. The funding would be used for deferred repairs and maintenance projects, and to bring the facility up to ADA standards. The intent is to transfer the operation and maintenance of the park from the state to a local partnership comprised of state and local entities. The appropriation would cover the projects the local partnership felt was necessary to make the transfer feasible. The current temporary closure of the park reiterated the need for a permanent solution.
Even though the hearing was held in the middle of a snowstorm, numerous supporters from the Nebraska City area made the trip to Lincoln to show their strong support and commitment to this project. The expertise, dedication, and enthusiasm expressed by representatives of the partnership will allow for innovation and greater utilization of the facility. Nebraska is the home of Arbor Day, a holiday now celebrated in every state, as well as many countries throughout the world. Arbor Lodge, the home of J. Sterling Morton who was the founder of Arbor Day, has great historic significance to our local area and beyond. It is our responsibility to make sure this site is preserved, well-maintained, and accessible to the public in future years.
The public hearing for LB 850 was held before the Revenue Committee. It proposes to expand the homestead exemption program to individuals with a developmental disability. Currently, the program is available to persons over 65, persons with certain permanent physical disabilities and disabled veterans. I believe that persons with developmental disabilities, who meet the income and valuation guidelines, are also deserving of and should qualify for this property tax relief program. By living in their own home, rather than a group home, not only does it allow them more independence, it also could reduce expenditures for the state. Two individuals who could qualify under LB 850 for the homestead exemption came to Lincoln to testify in front of the committee and did an excellent job.
Since the Department of Health and Human Services does not keep statistics on the number of individuals with developmental disabilities that own their own home, the executive director of Region V Services conducted a poll among providers across the state. He estimated that approximately 46 people might qualify for the homestead exemption. Of those 46, Region V supports 22 people who own their own homes, many of whom live in the Auburn area. The Department of Revenue, however, estimated that more than 400 persons would qualify under LB 850, greatly increasing the fiscal impact of the bill. The department based their estimate on research done by the University of Colorado.
LB 898, which was introduced by the Performance Audit Committee, and heard before the Health and Human Services Committee, proposes to codify reporting requirements for ACCESSNebraska in statute. In a recent performance audit of ACCESSNebraska, we identified several serious problems reflected in key efficiency measures, including call wait times, busy signals, and the backlog of work duties. The new reporting requirements will allow HHS and the Legislature to better target areas where problems are occurring.
The Legislature gave first-round approval this past week to LB 725, which deals with the state aid formula to K-12 school districts. The local effort rate in the formula was set to decrease for the 2015-16 school year, after it had been increased during the recession years. A reduction in the local effort rate increases the amount of state aid provided to school districts because the formula assumes a district has decreased resources. When next year’s formula was calculated, it ran lower than budgeted, primarily due to increased agricultural land valuations. Therefore, LB 725 proposes to move the decrease in the local effort rate up a year. Since most of the school districts that I represent have a good portion of agricultural land within their boundaries, many are experiencing losses in state aid next year. Without LB 725, the reductions would have been even greater.
If you have any comments on these bills or others before the Legislature, I encourage your input. 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.
Four hundred and sixty bills and six constitutional amendments were introduced during the 10-day introduction period for this legislative session. I introduced seven bills, some on behalf of constituents and some at the request of various organizations.
I introduced LB 711 at the request of the Department of Health and Human Services. When meth labs are discovered by law enforcement, the owner of the property cannot permit someone to live there until rehabilitation has been completed. An owner that violates this prohibition may be subject to a civil penalty up to $1,000. Legal advice suggested the need for due process prior to assessing the fine. LB 711 would allow an owner to request an administrative hearing to dispute a mistake in ownership or errors in the determination that the property was the site of a meth lab or that the property needs rehabilitation. The public hearing was held on LB 711 this past week. Dr. Joe Acierno, the Chief Medical Officer for DHHS, and Kay Oestmann, the director at Southeast District Health Department, testified in support of the bill.
LB 810 would prohibit local ordinances that interfere with the rights of lenders with respect to real estate loans and servicing rights. Such laws could still be imposed by the state or federal government.
Under LB 850, persons with developmental disabilities would be eligible for a homestead exemption, if they meet specified income limits and homestead value requirements. Currently, only persons over age 65, disabled veterans and their widow(er), and persons with certain permanent physical disabilities qualify for the property tax relief program.
LB 881 would amend 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”. Although attempts to repeal this strict liability law have not been successful, the Legislature has never defined “innocent third party”, which would help limit liability in certain situations. Following a recent Nebraska Supreme Court case which found a passenger in a fleeing vehicle, who was violating the open container law and was found with meth on him, to be an “innocent third party”, one of the justices issued a separate opinion containing suggestions for the Legislature. Under LB 881, a passenger in a fleeing vehicle would not be considered an “innocent third party” for such things as entering the vehicle knowing that the driver is 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 930 deals with the One-Call Notification System Act. It would require a representative of the operator to be present whenever an excavation is performed within 25 feet of an underground natural gas transmission line or other critical facility, unless otherwise agreed upon by both the operator and the excavator.
The Game and Parks Commission currently has a significant backlog of deferred maintenance projects and consequently decided to temporarily close some facilities in order to reassign staff to work on projects. Arbor Lodge State Historical Park in Nebraska City was on the list for temporary closure. In order to prevent this from happening again in future years, the Friends of Arbor Lodge Foundation, along with the City of Nebraska City, Nebraska City Tourism and Commerce, the Arbor Day Foundation and the Nebraska State Historical Society have worked on a plan to transfer operating responsibility from the state to the community partnership. In order to make the transfer feasible, $2.1 million of deferred maintenance projects at Arbor Lodge need to be completed first. I introduced LB 1033 to appropriate the money necessary for the maintenance projects at Arbor Lodge State Historical Park.
I introduced LB 1104 to allow a facility with a Y liquor license, which is granted to farm wineries, to also attain a retail liquor license. The development of farm wineries in the state have been important for economic development and the promotion of Nebraska products.
If you have any comments on the bills that I introduced or were introduced by other senators, I welcome your input. 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.