Lawmakers successfully overrode a veto May 14 of a bill that makes changes to the state’s school retirement plans.

LB553, introduced by Omaha Sen. Jeremy Nordquist, creates a new tier of reduced benefits for employees under the School Employees Retirement System (SERS) who begin work for the first time on or after July 1, 2013.

Senators had passed the bill May 7 on a 34-0 vote. In his veto letter, Gov. Dave Heineman said the bill does not represent a sustainable long-term solution and called for a thorough study of alternative solutions.

“This bill does not present comprehensive, long-term solutions to the defined benefit pension plans,” he said. “The taxpayers should also have a seat at the negotiating table to develop transparent, long-range solutions.”

Nordquist filed a motion to override the veto, saying the school retirement plan’s liability is an obligation of the state that must be addressed.

“No matter what we do to this plan going forward, [the liability] will still be there,” he said. “If we skip out on our pension obligation, there’s the possibility that it will affect the credit rating of the state and all of the school districts who pay into the retirement plan.”

Omaha Sen. Steve Lathrop supported the motion to override, saying that sustaining the veto would mean using the state’s cash reserves to address the problem.

“We cannot stick our head in the sand on this,” Lathrop said. “[If we don’t override the veto,] we will have to spend $98 million over the biennium for no reason.”

O’Neill Sen. Tyson Larson opposed the motion to override the veto. He said the bill would not address fundamental issues with the school retirement plan.

“If we don’t address this with real sweeping change, we’re going to continue to have this problem five or 10 years down the road,” he said.

Senators voted 32-1 to override the governor’s veto. Thirty votes were needed. The bill goes into immediate effect.

The new benefits tier will take into account a five year salary average to determine benefits instead of the three year average used currently. The maximum cost-of-living adjustment will be 1 percent instead of the current 2.5 percent adjustment figure. The changes will not apply to members of SERS prior to July 1, 2013.

The bill also makes a series of other changes to the plans, some of which include:
• the state statutory contribution rate will be increased from 1 percent to 2 percent of total compensation of all school employees beginning July 1, 2014;
• the amortization method in the School Employees Retirement Act will be changed from level dollar to level percentage of salary beginning July 1, 2013;
• eligibility for membership in the school retirement plan will be changed from 15 hours per week to 20 hours; and
• the sunset will be eliminated from the school budget and lid exclusions for expenditures above the Class V employer contribution rate of 7.37 percent and the school employer contribution of 7.35 percent.

LB553 also incorporates provisions from three other bills introduced by Nordquist.

LB554 applies the provisions of LB553 to all Class V school employees hired after July 1, 2013.

LB305 changes the amortization method in the Nebraska State Patrol Retirement Act from level dollar to level percentage of salary beginning July 1, 2013.

LB306 changes the amortization method in the Judges Retirement Act from level dollar to level percentage of salary beginning July 1, 2013.

The Education Committee heard testimony March 12 that would allow a school-based health center to serve as a child’s primary care center.

LB275, introduced by Omaha Sen. Jeremy Nordquist, would authorize the creation of a grant program to fund health centers in eligible schools. The grants would be funded with an annual $200,000 of lottery proceeds over the next two fiscal years.

Nordquist said meeting the health needs of children has many benefits.

“If kids are not healthy, they can’t learn,” he said. “Studies have shown a reduction in tardiness and absenteeism in students who have access to school-based health centers.”

Eligible school districts must be located in an area that has been designated as a health profession shortage area or a medically underserved area and have a majority of students that are eligible for free or reduced-price lunches.

The state Department of Education would administer the grant program, which would provide 50 percent matching funds to assist with capital construction and startup costs related to the centers. The school districts would furnish the remaining funds.

The grant program would be subject to a June 30, 2015 sunset date.

Andrea Skolkin, CEO of One World Community Health Centers, supported the bill, saying simple conditions can become significant health issues if left untreated.

“Health-related conditions interfere with academic success, healthy relationships and engagement in school,” she said. “This will provide critical primary care access points for school-aged children who do not have them.”

No one testified in opposition to the bill and the committee took no immediate action on it.

The Judiciary Committee held a joint hearing March 14 on two bills that would prohibit sexual orientation discrimination in adoption and child placement cases.

Omaha Sen. Jeremy Nordquist introduced LB385, which would prohibit the state Department of Health and Human Services (DHHS) from discriminating based upon race, color, religion, sex, sexual orientation, gender identity, disability, marital status or national origin when determining the suitability for a juvenile’s out-of-home placement. The department would be required to make placement decisions based on the health, safety and well being of a child.

Over 3,800 Nebraska children currently are placed in out-of-home care, Nordquist said, and half of them had lived in four or more foster homes in 2012.

“It is the overwhelming conclusion of mainstream child health institutions that nontraditional families can be as successful in the overall care of children as straight parents,” he said. “Good parenting skills are not reserved for those who are straight or of a specific race, religion or gender.”

Omaha Sen. Sara Howard introduced another bill – LB380 – which would provide adoption eligibility by two unmarried individuals without biological parents having to relinquish their legal rights to the child.

Nebraska couples who co-parent are not eligible for medical and other benefits that would assist children in the event of a biological parent’s death, Howard said, so co-parents currently do not have sufficient tools to ensure the well being of their children.

“Children of unmarried parents love and rely on their parents regardless of the legal status of the relationship,” Howard said. “A government that stands as an obstacle to parents meeting the needs of their children is a destructive government.”

Amy Miller, a member of ACLU-Nebraska, testified in support of the bills, saying she has represented couples who were ineligible to adopt their children because they were unmarried.

The Nebraska Supreme Court determined that such couples were not unfit to be parents, she said, but the current laws prohibited the court from allowing them to adopt. Current statutes need to be rewritten because the courts can interpret laws to protect children only to the extent the law allows, she said.

Tami Lewis-Ahrendt, a Lincoln resident, also testified in support of the bills. She said she and her spouse considered becoming foster parents but were discouraged after DHHS representatives suggested they would be ineligible due to their sexual orientation and marital status. Children are living in shelters when there are couples willing to provide them a safe home, she said.

“The only thing more despicable than neglect of a child is the willful neglect of a child based on discrimination,” Lewis-Ahrendt said. “It is a disservice to our community, system and the children who need us.”

Dave Bydalek, executive director of Family First Nebraska, testified in opposition to LB380, saying it would substantially change the adoption process.

“The practical effect of allowing an unmarried couple to jointly adopt a child would be to place that child into an environment with two entirely autonomous decision makers; that is two people, unconnected by law, with no legal obligations to one another,” he said. “If one of these individuals decided to end the relationship, there is no legally defined exit strategy to benefit the best interest of the child.”

The committee took no immediate action on the bills.

The Health and Human Services Committee heard testimony March 14 on a measure that would allow schools to seek Medicaid reimbursement for a broader array of services delivered to Medicaid-eligible special education students.

LB276, sponsored by Omaha Sen. Jeremy Nordquist, would allow school districts to seek reimbursement for audiology services, counseling, psychological and behavioral services, nursing, nutritional services, personal assistance, transportation, social work and vision services.

Nordquist said many schools already are providing these services to special education students but are not allowed under Nebraska law to seek reimbursement from the federal government. Currently, schools are able to seek Medicaid reimbursement only for physical, occupational and speech therapy, he said.

The bill would maintain $3 million in annual funding to the Early Intervention Act, with reimbursements in excess of that amount remitted to school districts and educational service units proportionally in relation to the amount of federal Medicaid funds received.

John Wurdeman, board member of Educational Service Unit 7 in Columbus and chairperson of the Nebraska Association of School Boards Medicaid Consortium, testified in support of the bill. He said school districts should be allowed to seek any federal funds available.

“It concerns me that we are leaving these federal reimbursement dollars … on the table,” Wurdeman said.

Seamus Kelly of the Nebraska Planning Council on Developmental Disabilities also supported the bill, saying Medicaid reimbursement could serve as an incentive for schools to provide appropriate services early in a child’s education rather than seeking less expensive alternatives.

Kelly said some Nebraska families struggle to obtain costly services such as the extensive nursing care required by his 8-year-old daughter.

“We get great services now,” he said, “but not every family in the state with a child with special needs can make that same claim.”

No one testified in opposition to the bill and the committee took no immediate action on it.

The Revenue Committee heard testimony March 6 on a bill that would provide a new energy production tax credit.

A tax credit currently is in place for electricity generated by a new, renewable generation facility. The credit is awarded at $0.0005 per kilowatt-hour and is capped at $50,000 per year. LB411, introduced by Omaha Sen. Jeremy Nordquist, would end the current tax credit and create a new, broader credit.

Nordquist said providing the credit would mean more “clean, homegrown energy.”

“Nebraska has exceptional wind resources, but we must compete against our neighbors for economic development opportunities,” he said. “This would give Nebraska a substantial advantage in bringing the renewable energy industry to the state.”

The bill would increase the amount of the credit to:
• $0.005 per kilowatt-hour for 2014;
• $0.015 per kilowatt-hour for 2015 to 2017;
• $0.075 per kilowatt-hour for 2017 to 2019; and
• $0.005 per kilowatt-hour for 2019 onward.

The annual tax credits would be capped at $2 million per taxpayer for up to eight years after the facility’s operative date.

Representing Edison Mission Energy, David Levy testified in support of the bill. He said LB411 would make Nebraska and Oklahoma the only two states in the nation to offer the incentive.

“With the [energy] federal production cut ending, we will have to deal with a sharp drop in development,” Levy said. “We already have the wind, great landowners and public power infrastructure in place. This would help put Nebraska at the top of the list.”

No one testified in opposition to the bill and the committee took no immediate action on it.

Published January 31st, 2013
The Revenue Committee heard testimony Jan. 30 and 31 on seven bills that each would exempt some or all retirement income from taxation.

Currently, income tax is levied on social security benefits above set levels — $25,000 for single people and $32,000 for married people filing jointly. The proposals included:

• LB17, introduced by Omaha Sen. Jeremy Nordquist, which would raise the base levels at which social security benefits are taxed to $60,000 for single persons and $80,000 for married couples filing jointly;
• LB74, introduced by Fremont Sen. Charlie Janssen, which would exempt all social security benefits from income taxation;
• LB238, introduced by Bellevue Sen. Sue Crawford, which would exempt portions of both social security benefits and retirement income from state income taxes;
• LB5, introduced by Omaha Sen. Bob Krist, which would exempt all social security and military retirement benefits from income taxation;
• LB75, introduced by Janssen, which would exempt military retirement benefits up to $24,000 per individual and $48,000 for married couples filing jointly; and
• LB176, introduced by Papillion Sen. Jim Smith, which would phase in an income tax exemption on all military retirement benefits over a 10-year period; and
• LB227, introduced by Papillion Sen. Bill Kintner, which would phase in an income tax exemption on all retirement income over a three-year period.

Nordquist said the current base levels were set in 1984 and have not been adjusted for inflation since. He said his bill is about achieving a level of tax fairness.

“We want to create a more tax friendly climate for retirees in Nebraska,” Nordquist said. “Putting money in their pockets will create immediate economic activity.”

Krist said retaining military retirees — many in their 40s and 50s upon retirement — should be a priority for the state.

“We have an incredible brain trust in the military and that needs to stay in Nebraska,” he said. “No matter how we get to that point, we need to get there this year.”

Roger Rea, president of NSEA-Retired, testified in support of the bills. He said retirees put their money directly back into the economy and that money should stay in Nebraska.

“Retirees represent a huge economic engine in the state,” he said. “It’s time to return the money to its rightful owners — the recipients of social security benefits.”

David Drozd, research coordinator for the University of Nebraska at Omaha’s Center for Public Affairs Research, testified Jan. 30 in a neutral capacity. He said if retirees continue to leave the state at current levels, the loss in population could have far-reaching effects.

“If people aged 55 to 74 continue to move out of the state at current rates, they will likely take a Nebraska congressional seat with them,” he said.

Open Sky Policy Institute executive director Renee Fry opposed income tax exemptions. She said empirical data does not support the assertion that retirees leave the state because of income taxation on social security benefits.

“The research fails to find any correlation between migration and taxes,” she said. “It’s a slippery slope when you start to carve out exemptions for one group and not another.”

The committee took no immediate action on any of the bills.

Opposes Tax Increase on Businesses, Agriculture, Health Care and Higher Education

Lincoln, NE: State Senator Jeremy Nordquist stands in opposition to the Governor’s proposal to raise taxes on businesses, farmers, and working families.
“Tax relief is one of my highest priorities, but we must focus on the kind of reform that will prioritize the needs of middle-class Nebraska families, not on tax relief for Warren Buffett and Pete Ricketts,” said Senator Nordquist. “The Governor’s proposal is bad for businesses in our state and will force them to move jobs elsewhere. It will hurt our agricultural economy. It creates a ‘sick tax’ levied on prescription drugs and hospital stays, and it raises taxes on the cost of a college education. It’s the wrong direction for our state and our economy.”
“I’ve heard from businesses in my district who tell me that an income tax cut won’t help their business or their employees when their company is forced to move to another state and take the jobs with them. I stand with these job creators, with small businesses and farmers, with charities and hospitals and with working families in opposition to the Governor’s short-sighted tax shift.”

Raises Cost of Health Care, College; Hurts Small Businesses and Start-Ups

LINCOLN, NE: Regarding Governor Heineman’s tax proposal, released today, Senator Jeremy Nordquist has released the following statement:

“A tax proposal that is revenue neutral, by definition, cannot be called a ‘cut.’ So, let’s call it what it is – a tax shift. It shifts the burden paid by corporations and upper-income individuals to those who take prescription medications and use our hospitals, to those lucky enough to be able to attend college, and to small businesses and start-up companies that need exemptions to be able to afford the inputs to get their business up and running.”

“Under the Governor’s proposal, Warren Buffett won’t have to pay any income tax, but if you have a chronic condition that requires prescription medication or a hospital stay, if you live in a college dorm, or if you run a non-profit homeless shelter for example, you’ll be picking up the tab.”

“I agree that this subject deserves a serious debate, but I cannot support a proposal that increases the burden on hard-working Nebraskans who most need the tax relief.”
###

Bill Requires Posting of Full Compensation and Retirement Package On School Website

LINCOLN, NE: Today, Senator Jeremy Nordquist introduced the Education Compensation Transparency Act, LB 274, which will require full disclosure of Superintendent and ESU Administrator compensation, fringe benefits, and retirement contracts on a school’s or ESU’s website.
Said Senator Nordquist, “Without a doubt, the demands and responsibilities of these administrators are substantial, and I believe the level of compensation should reflect those responsibilities. However, as some of the most highly paid public employees in our communities and our state, it is important that we promote full transparency in what that compensation package looks like.”
“I firmly believe that making the compensation of top school administrators more transparent will lead to greater deliberation by those approving the compensation, and therefore, better accountability for public dollars,” said Nordquist.
###

Opposes Tax Increase on Health Care and Higher Education

Lincoln, NE: State Senator Jeremy Nordquist will adamantly work to oppose any tax proposal that increases the tax important items in a family’s budget, like health care services or aspects of higher education.
“Tax relief is one of my highest priorities, but we must focus on the kind of reform that will prioritize the needs of middle-class Nebraska families, not on tax relief for Warren Buffett and Pete Ricketts,” said Senator Nordquist. “Eliminating sales tax exemptions sounds great, but it will have real fiscal and public policy implications. It will be middle-class Nebraskans that end up footing the bill if you increase taxes on things like health care or room and board costs for colleges and universities.”
###