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It’s almost crunch time. Senators have begun meeting in full-day session. We’ve passed the 50-day mark of the 90-day legislative session. We’ve discussed only a handful of priority bills and we still have the budget to deal with in May. Furthermore, the Appropriations Committee has estimated that the budget will only allow for $16 million to $19 million in new spending. This figure sounded sufficient, until the sum was calculated for the fiscal impact of the priority bills and came to more than $150 million for the two-year budget period. Consequently, some senator’s priority bills will not pass or they will have to be amended to reduce the fiscal impact. Senators will have to decide which priority bills are the most important for the state, as the Nebraska Legislature is required to pass a balanced budget.
Senators learned of the fiscal imbalance while debating a bill that would adopt the Wildfire Control Act of 2013. The legislation would direct the Nebraska Forest Service to contract for two air tankers for fighting fires, to thin forests to reduce risk, to provide expanded training, to expand the federal excess property programs and to oversee forest rehabilitation. Based on predictions that the drought will be even worse this summer, it was easy to argue the need for the bill. However, the legislation has an annual $1.7 million fiscal impact. Despite the warning, senators gave LB 634 first-round approval.
The following are two more examples of bills with significant fiscal impacts. Both have been designated as priority bills but neither have advanced from committee at this time.
LB 553 amends the School Employee Retirement Plan to address both short-term and long-term funding obligations. The bill creates a new tier of reduced benefits for new employees, reducing the cost-of-living adjustment from 2.5% to 1% and increasing from 3 to 5 the number of years used to determine final average salary for purposes of calculating a member’s retirement benefit. Preliminary discussions by Retirement Committee members would keep the contribution rates required of teachers at the increased level rather than allowing them to sunset. Additionally, the bill proposes to increase the state’s contribution rate from 1% to 2% of compensation, creating a fiscal impact of approximately $17 million per year. In an effort to retain costs, committee members have proposed to delay the increase in the state’s contribution rate to the second year of the biennium. Due to the recession, the pension fund is currently facing a $108 million actuarial shortfall and LB 553 helps to ensure the sustainability of the School Employees Retirement System.
LB 625 would increase the maximum income level for families qualifying for the Child Care Subsidy Program from 120% to 185% of the federal poverty level. In 2011, 13 states set eligibility for child care assistance above 200% and an additional 22 states set eligibility above 150% of federal poverty level. Prior to 2002, the income limit for the child care subsidy was 185% of federal poverty guidelines, but this income level was never authorized in statute. Supporters testified that child care subsidies are critical to ensuring that children are safe and parents can work. Studies have shown that child care represents the largest portion of a family’s income. The fiscal note estimates that the cost to the state would be approximately $11 million per year. As I understand, negotiations are taking place on the percentage of increase in the income level.
The Legislature will have a tough job ahead. All of the bills that have been designated as priority bills have merit and are important to certain groups of Nebraskans. If you have any comments on the bills that have been prioritized, I value your input and encourage you to contact me. 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 e-mail address is firstname.lastname@example.org.