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This past week, the Legislature discussed the line-item vetoes made by the Governor on the budget bills. His vetoes amounted to approximately $44 million in federal, state, and cash funds over the next two years. The Appropriations Committee recommended that approximately $14 million in line-item vetoes be overridden, representing approximately 85% of the general fund vetoes, 70% of the vetoes in cash funds, but allowing the vetoes of federal funds to stand. The Legislature voted in support of the committee’s recommendations.
The Legislature voted to override line-item vetoes of state funding for CASA (Court Appointed Special Advocate) grants, increased salaries for county court employees, additional aid for the Learning Community in Douglas and Sarpy counties, and funding for a Dental Health Director within the Department of Health and Human Services, which has been vacant since 2009 and has resulted in the loss of federal funding. The Governor’s veto of funding for the UNMC College of Nursing Lincoln facility, renovation of the Museum of Nebraska History and improvements in the State Capitol were also overridden. The College of Nursing facility in Lincoln will be partially funded with savings from a University capital project previously undertaken. The renovation of the Nebraska History Museum is intended to keep it in compliance with mechanical and electrical codes and ADA regulations.
Individual senators attempted to override additional line-item vetoes, including increased funding for the State Auditor’s office, the Supreme Court, and the railroad track inspection program. However, only the motions to override offered by the Appropriations Committee were successful.
Although LB 613, which proposed to create the Tax Modernization Commission, was introduced earlier this year, it gained momentum after public hearings were held on the Governor’s proposals to eliminate or reduce the income tax. Taxpayers from across the state objected to the proposal which would have eliminated popular sales tax exemptions to compensate for the reduction in income tax revenue. Many citizens voiced their opinion that high property taxes are a more prevalent problem.
During debate on LB 613, Senator Ernie Chambers suggested that the tax study could be accomplished through a resolution rather than by statute. He proceeded to introduce LR 155, which was adopted by the Legislature this past week. LR 155 creates the Tax Modernization Committee comprised of the members of the Revenue Committee, the chair of the Appropriations, Health and Human Services, Education, Agriculture, and the Legislature’s Planning Committee. In addition, the Executive Board will select two other senators to serve on the committee. The purpose of the study is to review and evaluate the state’s tax laws regarding the sales, income, and property taxes, as well as other miscellaneous taxes, credits, and incentives. The resolution states that community involvement is essential to the success of the study and encourages the participation of the public. The committee is to issue a report to the Executive Board by December 15, containing any recommendations to update state, county and local tax policies.
In discussing LR 155, Senator Galen Hadley, who will serve as the chair of the Tax Modernization Committee, emphasized that the study will not result in sweeping tax reductions. He stressed that the mission of the committee is to determine if there is equity in our current tax system. I thought it was important that he mentioned our state’s high property taxes when he spoke of the challenges before the committee.
The Legislature is finishing up this year’s business and is scheduled to adjourn on June 5. Again, I encourage your input. 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.