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The One Hundred Third Legislature, Second Session, began on Wednesday, January 8 and got right down to work. This is considered the short session of the Legislature, lasting 60 days, and is tentatively scheduled to adjourn on April 17. During the 90-day legislative session in even-numbered years, the biennial budget is the Legislature’s primary responsibility. Only minor budget adjustments and deficit requests will be dealt with during this session.
Senators began introducing legislation on the first day of session and can introduce bills through the tenth day, which falls on January 22 this year. We will meet in full day session, discussing carry-over bills beginning on Monday, January 13. The public hearing process will start on January 21, lasting through the end of February. Every bill that is introduced is guaranteed a public hearing, allowing for the input of the residents of Nebraska.
Although it is just a short session, we will have many important issues before us this year. Tax reform is foremost on most senator’s mind, following the interim study on taxes, which was the direct result of the Governor’s proposal last year to eliminate the income tax, making up the lost revenue by repealing several important sales tax exemptions. Public hearings were held throughout the state and the senators on the Tax Modernization Committee heard repeatedly of frustrations with high property taxes. Two senators, who are also gubernatorial candidates, have already introduced several bills on tax relief.
I served on the Water Funding Task Force, attending a couple dozen meetings across the state over the interim. A package of bills will be introduced as a result of our efforts to recommend a permanent, stable source of funding to ensure that Nebraska’s water resources are managed effectively and efficiently.
Also this year, the Legislature will deal with prison reform, juvenile justice reform, funding for our K-12 schools and early education, seat belt and texting laws, taxing of retirement income, and whether to expand Medicaid as part of the federal Affordable Care Act.
I want to remind you of the Legislature’s website at NebraskaLegislature.gov. Viewers can read the text of bills introduced, search state statutes and past and current legislation, e-mail state senators, view the agenda for the day, read the online version of the Unicameral Update and watch the Unicameral live.
If you call my State Capitol office, I will be happy to visit with you if I am available. If not, my staff will be able to assist you. Tim Freburg is my Administrative Assistant. He answers the phone and handles my calendar. Kim Davis is my Legislative Aide. She works on constituent issues and legislation.
I encourage you to contact my office with your views and opinions on the legislation that is introduced by senators during this session. Only with your input, can I effectively represent the residents of the 1st district. My email address is email@example.com. My telephone number at the State Capitol is (402) 471-2733 and my mailing address is Senator Dan Watermeier, District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509.
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 firstname.lastname@example.org.
The Legislature spent the better part of the mornings this past week debating a bill calling for a comprehensive study of our tax system. As amended, LB 613 creates the Tax Modernization Committee, whose purpose is to review and study the state’s tax laws, including, but not limited to, sales taxes, income taxes, property taxes, and other miscellaneous taxes and credits.
The Tax Modernization Committee would be comprised of the Revenue Committee members and the chairs of the Appropriations, Health and Human Services, Education, Agriculture, and Planning Committees. The committee is to consider fairness, competitiveness, simplicity and compliance, stability, adequacy and the interrelationships of the tax systems within the state revenue system as a whole. The importance of public input is recognized in the legislation and the committee is authorized to hold public hearings.
A report is to be issued by December 15, containing recommendations to update state, county, and local tax policies and to identify areas of concern that require further in-depth analysis and study.
LB 613 gained steam after LB 405 and LB 406 were introduced at the request of the Governor. The legislation called for the elimination or the reduction of income taxes, as well as the repeal of certain sales tax exemptions granted to business, agriculture, hospitals and other nonprofit groups. Due to an outcry from the public, both bills were killed by the Revenue Committee and LB 613 was advanced to the floor of the Legislature by the Executive Board.
Senator Ernie Chambers filibustered LB 613 because he was upset that several bills were being advanced to alter current taxes in light of the pending study, but the Revenue Committee did not advance a bill that he introduced to repeal LB 357, which was passed last year allowing for a local option sales tax rate of up to 2 percent. He offered numerous amendments to LB 613, slightly changing the wording of the legislation. After eight hours of debate and a successful cloture motion, LB 613 was given first-round approval on a 47-1 vote.
I support LB 613 because I feel that it is time to review the tax system. Over the years, new taxes and fees have been put in place, other taxes have been repealed, rates have been adjusted, and exemptions have been granted, but no one has looked at the whole picture to determine how the different parts work together. Times have changed over the past decades and our tax system needs to reflect those changes, while remaining competitive with other states.
An amendment is pending for the second stage of debate that would place a moratorium until July 15, 2014 on the imposition of a local option sales tax in excess of 1 ½ percent, which was the maximum amount allowed prior to the passage of LB 357 last year. Any tax rate above 1 ½ percent that was approved by electors prior to the effective date of the legislation would be allowed to remain in effect. I assume the intent of the proposed moratorium is to prohibit additional towns from utilizing the increased rate while the comprehensive tax study takes place. The amendment also places a moratorium on any new occupation tax or any increase in the rate of an existing occupation tax.
The public hearing process has been completed for this year. Full day debate will begin on March 27th and continue through the last day of the legislative session, which is set for June 5th. During this time, senators will try to discuss as many priority bills as possible and must pass a biennial budget. If you have any comments on bills that have been given priority status, I encourage you to contact me. My address is District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is email@example.com and my telephone number is (402) 471-2733.