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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 email@example.com. My mailing address is District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509 and my telephone number is (402)471-2733.
Governor Ricketts presented his State of the State Address to the Legislature this past week. He said he looks forward to working with us to bring relief to taxpayers. He urged us to prioritize property tax relief, as it is his number one priority this year. He touched on economic development and the need to grow Nebraska. He expressed his support for a proposed $26 million investment in the Community Corrections Center in Lincoln, as part of his broader efforts to help reduce recidivism. The governor reiterated his opposition to Medicaid expansion, referring to it as one of the biggest long-term risks to the budget.
Following his speech, several bills were introduced by senators, at the request of the governor. Two bills, introduced by the chair of the Revenue Committee and the chair of the Education Committee, make structural changes to how property taxes are levied on residential, commercial and agricultural property. These bills tighten current spending limits on all local governments. They also propose to tighten levy limits by removing exceptions that don’t require voter approval. Furthermore, the proposed legislation will limit the statewide aggregate increase in the class of agricultural property to 3% per year by adjusting the value of agricultural land.
As I mentioned last week, I worked with other senators on legislation that alters the school finance formula to provide property tax relief. Senator Jim Scheer of Norfolk is the primary sponsor of LB 883 and 11 senators have signed on as co-sponsors. LB 883 proposes to provide a base amount of state aid per student to school districts to offset property taxes. This aid would be phased in over four years, until it reaches $3,000 per student, regardless of whether the school qualifies for equalization aid. The bill also makes some adjustments in the state aid formula to help subsidize the cost of the base aid. Under the current formula, almost two-thirds of the school districts receive no equalization aid. The increase in the valuation of agricultural land has contributed to the disproportionate burden placed on property taxes in supporting school districts. I don’t believe that the founders of the current state aid formula envisioned this would happen and consequently, I feel that it is time to revamp the system.
Last year, I introduced LB 47, which proposes to make the question mandatory rather than optional, on the driver’s license application regarding whether to place your name on the Donor Registry. LB 47 was selected as a Speaker priority bill last year, but was not fully debated. The purpose of the bill is to increase the number of donors in Nebraska. More than 98% of Nebraskans registered as donors became registered through the application process for a driver’s license. With the question currently optional, only 55% of applicants are registered as donors. This percentage is higher in states where the question is mandatory.
LB 47 does not require applicants to become donors, but merely requires that they answer the question with “yes”, “no” or “elect not to answer”. At the public hearing, an organ recipient testified that he can accept if applicants choose not to register. However, it’s harder to accept apathy, when applicants skip over the answer. After several hours of debate, LB 47 received initial approval earlier this week.
The Unicameral Youth Legislature will be held on June 5-8, 2016 at the State Capitol. It gives students an opportunity to learn what it’s like to serve as a state senator. High School students will learn about the unique process of our unicameral system by sponsoring bills, conducting committee hearings, and debating legislation. Students learn directly from senators, staff and lobbyists, working on legislation from the previous session. All high school students are eligible and the deadline is May 15. The fee is $350, which includes lodging, meals and transportation. Scholarships are available. For more information visit NebraskaLegislature.gov/uyl.
The hearing process will begin on January 19. Senators will meet as a body in the morning and divide into committees in the afternoon. All bills are referenced to a standing committee and a hearing is held before this committee. This gives the public the opportunity to make their viewpoints known before the committee takes action on the bill. If you are interested in any of the bills that have been introduced, I encourage you to attend a public hearing. I also encourage you to contact me with your opinions on legislation that has been introduced or with any question you may have. 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 at the capitol is (402) 471-2733.
The 10-day bill introductory period is complete, resulting in the introduction of 663 bills and 4 constitutional amendments. Last week, I summarized most of the bills that I had introduced to date.
This past week, I introduced several more, including LB 490, which would adopt the Provider Orders for Life-Sustaining Treatment (POLST) Act. A POLST is a medical order, completed and signed by a medical provider, resulting from a detailed conversation between the patient and physician or other health care provider. A POLST is intended towards individuals with advanced illness or frailty. The purpose of a POLST is to improve end-of-life care by converting a patient’s treatment preferences into medical orders that are transferable amongst home and health care settings. The use of a POLST form is not mandatory. It is voluntary, meaning that it is used only if a patient chooses to complete one. It can be reviewed and revised as needed. It is limited to one page, is printed on bright colored paper, and is commonly kept on the refrigerator for easy recognition by paramedics.
POLST legislation has been approved in 19 states. Additional states are in the process of developing programs. Several communities in Nebraska are already using a POLST form. A primary goal of LB 490 is to have a standard form, for use throughout the state, in order to avoid confusion among health care providers in emergency situations.
Newly elected Governor Pete Ricketts delivered his first State of the State Address this past week. The Governor outlined the following objectives: controlling spending to keep it under the growth in revenue; property tax relief; cultural change and operational excellence in state agencies (through the creation of two new positions in the Governor’s cabinet – a chief operating officer and a human resources director); comprehensive reform in the Department of Corrections and the Department of Health and Human Services; regulatory process review; building on a military friendly culture; and improving educational outcomes, by creating a public-private partnership to create a career and vocational training program.
The Governor’s budget proposal would limit the two-year average growth in general fund spending to 3.1%, which is significantly less than the approximate 6.5% per year budget growth during the last biennium. He also stressed that he would not support any tax increases. To deal with what he termed as the #1 priority, he would add an additional $60 million per year to the Property Tax Credit Relief Fund. This is the concept that is contained in LB 364, a bill that I introduced last week. The Governor also indicated his support for reducing the value of agricultural land from 75% to 65% of actual value, along with an additional $9.5 million to the state aid formula, to make up for the loss in property tax revenue for school districts. I have introduced legislation similar to this concept, in 2013 and again this year, with LB 178.
The cash reserve fund was not touched by the Governor’s plan. However, he hinted that he believes the balance is too high and a portion should be returned to taxpayers. Although the Governor has indicated that he is supportive of income tax reductions, his proposal focused on property tax relief and only contained income tax relief for retired military veterans.
The public hearing process has started with committees meeting every afternoon. In the mornings, senators have begun debating legislation that has been advanced from the various committees.
If you would like to voice your opinion on legislation that has been introduced, I encourage you to contact me. 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 Governor gave his final State of the State address to the Legislature this past week. He began his speech on the topic of health care, referring to the many problems with the federal Affordable Care Act. The Governor said that the new federal health care law will cost the State of Nebraska more than $200 million in state general funds over the next six years. He is still strongly against the expansion of Medicaid, which was originally part of the federal plan, but due to a lawsuit became voluntary for states.
Senator Kathy Campbell, the chair of the Health and Human Services Committee, introduced LB 887, the Wellness in Nebraska Act. It is her second attempt to expand Medicaid in Nebraska, proposing to offer Medicaid coverage to adults age 19-64 with incomes up to 100% of the federal poverty level, while those with incomes above 50% of the federal poverty level would have to contribute 2% of their income. For these newly eligible with incomes between 100% and 138% of the federal poverty level, insurance would be purchased through the marketplace, with the enrollees paying 2% of their income and Medicaid paying the remainder. The plan would have to be approved by the federal government.
Although the federal government has agreed to pay 100% of the costs for the first three years of the expansion, dropping to 90% after that, the Governor fears that the state’s share could jeopardize funding for other important programs in Nebraska, such as K-12 education and higher education. He also questioned whether the federal government will keep their promised commitment.
The Governor also addressed crime and punishment. He recommended legislation that will make violent criminals earn their “good time”, instead of automatically receiving it. Currently, Nebraska’s prisons are at approximately 150% of capacity. Some senators expressed concern that this change could enhance the overcrowding problem, while not addressing the underlying problem, of lack of services to prepare the inmate to live in the community. The Governor offered some suggestions for short-term prison capacity issues, but recommended further study for long-term changes.
Senator Brad Ashford, the chair of the Judiciary Committee, introduced LB 907. This bill incorporates the concept of “supervised release”, which has been shown to result in lower rates of recidivism than if inmates are released without supervision. The use of structured monitoring is intended to help inmates adjust to life outside of prison. Each inmate would undergo a comprehensive risk and needs assessment prior to release.
The Governor stressed that the biggest and most important issue facing the state is high taxes. He indicated his support for the Nebraska Farm Bureau’s proposal to lower agricultural land valuations from 75% to 65%. Last year, I introduced LB 101 which proposed this same concept for school taxation purposes. The Governor also recommended a decrease in the top individual income tax rate.
Governor Heineman suggested that the state could offer up to $500 million in tax relief over the next three years, considering our strong cash reserve and our growing economy – if we strictly limit spending. Senators, remembering how a strong cash reserve helped carry our state through the last recession, may be reluctant to spend down the cash reserve too far.
If you have any comments on the Governor’s speech or on other legislation that has been introduced, I encourage you to contact me. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is firstname.lastname@example.org and my telephone number is (402) 471-2733.