The 90-day legislative session is concluding four days early, but the Legislature was able to accomplish the one duty required by the Nebraska Constitution – pass a balanced budget. The task was not an easy one as the state began the year facing a projected $1 billion shortfall.
The Appropriations Committee should be commended for shepherding the two-year, $8.9 billion budget without raising taxes yet still ensuring core government services, such as education and corrections, were adequately funded. In the face of continuing declines in state revenues, Governor Ricketts vetoed an additional $56.6 million from the budget, bringing the total growth in state spending to just 0.6%.
In addition to passing the budget, the Legislature gave final approval to 170 bills out of the 667 that were introduced. Unfortunately, many measures fell victim to filibusters and were removed from the legislative agenda for the year. One of those was a bill I was championing that sought to bring comprehensive reform to our tax system and would have resulted in tax relief to many Nebraskans.
LB 461 proposed to do the following: change the way agricultural and horticultural land is assessed from a comparable sales approach to a more fair income approach; collapse the first two income tax brackets to simplify our tax code; increase the Earned Income Tax Credit to help poor, working families; create a new nonrefundable credit for low-income earners; phase out the personal exemption credit for the wealthy; reduce the top corporate rate to help make us competitive; increase the personal exemption credit; increase the Property Tax Credit Cash fund when certain triggers are met; and finally, allow for an 8-step phase in reduction of the top income tax bracket with triggers to ensure our General Fund grows at a rate that allows for us to continue to provide essential government services while also letting taxpayers to keep more of their hard-earned dollars.
Though this session has ended, my desire to grow the state and lower our overall tax burden has not. Efforts by those who want to significantly increase government spending and those who want tax relief to effectively benefit just one sector of our state will make this challenging, but I am up for the challenge. Through the legislative interim and my last session in the Legislature, I will continue to pursue the goals I have pledged to the voters of Legislative District 14 – bring greater efficiency to state government, create a more competitive environment for all our businesses, and to stimulate Nebraska’s economy to make our state an even better place to live.
Eighteen new senators helped kick off the 2017 legislative session, which convened for the 90-day cycle on January 4th. The beginning of the 105th Legislature’s two-year chapter not only saw a large number of freshman senators, it also ushered in a large number of changes to leadership positions. In fact, only three incumbent senators held on to their former chair positions. I was one of the incumbent senators who changed positions. For the past two-years, I was the chairman of the Legislature’s Transportation and Telecommunications Committee, on which I still remain a member. However, on the first day of the session, I was elected to serve as the chairman of the Revenue Committee. As such, I intend to concentrate my efforts on tax reform over the next couple of years.
Of the 674 bills and resolutions introduced, 87 have been referred to the Revenue Committee. One of those bills to be considered by the Revenue Committee is a bill I introduced on behalf of Governor Pete Ricketts – LB 337. This measure seeks to bring income tax relief and takes a fiscally responsible approach by phasing in a reduction of the top income bracket over an eight-year period beginning in 2020. The current top bracket of 6.84 percent will eventually be reduced to 5.99 percent, but only if our revenues grow sufficiently to ensure education and critical state programs are adequately funded. Any scheduled decrease will be deferred if the state’s projected revenue growth is less than 3.5 percent. Our current top tax rate of 6.84% – applied to a single tax payer who makes as little as $29,831 per year – is one of the highest rates among our bordering states (only Iowa’s is higher). LB 337 will make our state more competitive and attractive to new businesses and residents, allowing us to grow our tax base and our economy.
While LB 337 focuses on income taxes, several other bills have been introduced to address property taxes and sales taxes as well. As the Revenue Committee chairman, I will pay close attention to all the proposals introduced and I intend to work closely with my colleagues to bring real, comprehensive tax relief to all Nebraskans.
The second session of the One Hundred and Fourth Legislature is coming to a close and despite the session’s shorter schedule and a record number of filibusters, laws were approved that will benefit the residents of Legislative District 14 and the state as a whole. Over 200 bills were passed and signed into law during the 60-day session. There were four in particular that I worked very closely on and that I think will move our state successfully into the future – LB 1067, LB 884, LB 977 and LB 960.
While I introduced my own bill to eliminate the common property tax levy of the Douglas/Sarpy County Learning Community (LB 739), LB 1067 was the vehicle used to pass this overdue policy change. The bill was introduced by the Education Committee chairperson, Senator Kate Sullivan. In addition to ending the 95-cent common levy, LB 1067 increases aid to schools with high numbers of poverty students, exchanges open enrollment with option enrollment and reduces the size of the Learning Community bureaucracy. As a Sarpy County resident, I have been opposed to the common levy since its inception in 2009 and have advocated for its elimination since I was first elected to the Legislature. Not only was the common levy unfair, it did not adequately address the funding needs for high-poverty schools, it fostered animosity between the two counties and it stunted development in Sarpy County, resulting in valuation stagnation for the entire metropolitan area. Now that the issue of the common levy is behind us, it’s time to look ahead to ensure all Nebraska students receive a quality education.
Sarpy County residents will also benefit from a measure I designated as my priority bill for the 2016 session. LB 884, introduced by Jim Scheer, makes significant improvements to the Convention Center Facility Financing Assistant Act and the Sports Arena Facility Financing Assistance Act. The bill will facilitate the building of an economically important athletic complex in La Vista, planned by the nonprofit corporation, Nebraska Multisport Complex. The proposed $125 million venture will include facilities for swimming, diving, soccer and tennis and will attract local, regional and national interests, bringing new investment into the area. The two acts allow for the use of new sales tax dollars generated by convention centers and sporting facilities to be used to pay off debt incurred in the building of these facilities. LB 884 will benefit the CenturyLink Center in Omaha, the Pinnacle Bank Arena in Lincoln and the Ralston arena and will result in more funds being generated for a grant program aimed at developing civic and community centers across the state. LB 884 will create new investment and job opportunities, grow the economy, increase state revenues and enrich the lives of all Nebraskans for years to come.
LB 977 contains an important provision that will aid in the on-going success of the state’s number one industry, agriculture. An exemption is granted for certain implements of husbandry, or farm machinery, from weight and load limitations when operated on the highways of this state. Today’s farm equipment is much bigger and heavier than those of the past and the occasional use of our roadways is incidental to the business of agriculture. The passage of LB 977 will protect Nebraska’s farmers and ranchers from hefty fines that compromise their ability to work effectively and efficiently. The bill ensures our valuable agriculture industry will continue to grow and prosper.
Finally, I introduced LB 960 to protect and build our critical transportation infrastructure. LB 960, the Transportation Innovation Act, establishes a $450 million transportation infrastructure bank using $50 million from the state’s cash reserve and earmarking a portion of the gas tax over the next 17 years. The Transportation Innovation Act calls for the completion of Nebraska’s expressway system by 2023, creates a county/state program to fix our state’s excessive number of dilapidated bridges and allows for funding of projects that stimulate economic growth. Additionally, the bill authorizes the Department of Roads to utilize alternative contracting methods expected to accelerate major highway construction, resulting in more efficient use of state funds. The Transportation Innovation Act would not have been possible without collaboration with the executive branch, the private sector and several members of the Unicameral Legislature. The bill passed nearly unanimously on a 48-0 vote – one senator, unfortunately was absent. Our transportation infrastructure is the life-blood of Nebraska, supporting economic growth and the safety of our families as we work and travel across our great state. LB 960 is landmark legislation that will move our state into a bright future.
While the legislative session may be over, our work is not done. During the interim, I will be busy attending meetings and researching legislation for the next session. If you ever have any thoughts or ideas which you would like to share with me, I encourage you to contact my office at (402) 471-2730 or email me at email@example.com. Thank you for giving me the opportunity to serve the residents of Legislative District 14 and the State of Nebraska.
The 2016 60-day session has passed the halfway mark and committee hearings are concluding. Full-day debate on the bills advanced from the fourteen legislative committees will begin on March 7. Despite having more time to discuss legislation, the number of bills make it impossible to get to everything before the session’s conclusion and thus it is necessary to prioritize. Each senator is permitted to designate one bill as his or her personal priority for the session, giving the measure a better chance of being debated.
Senator Lydia Brasch has chosen my bill calling for the adoption of the Transportation Innovation Act as her priority for this session. LB 960 includes the creation of a Transportation Infrastructure Bank to accelerate completion of Nebraska’s Heartland Expressway and to assist counties in repairing and replacing dangerously deficient bridges. While the Appropriations Committee has yet to advance LB 960 to the full Legislature, I have confidence my colleagues will recognize how important a good transportation infrastructure is for the benefit of our state and that LB 960 will eventually pass.
I designated LB 884 as my personal priority bill for the session. LB 884 was introduced by Senator Jim Scheer and would amend the Convention Center Facility Financing Act and the Sports Arena Facility Financing Act. Both of these acts provide for turnback financing. Under this funding mechanism, a portion of the sales tax generated from new businesses established around convention centers and sports arenas is captured to help pay for the facility. LB 884 would make the “capture zone” uniform for both convention centers and sports arenas and would extend the time period for cities to solicit new businesses. This bill not only benefits the larger cities that can support these facilities, it benefits communities across the state with a portion of the new sales tax going to the Civic and Community Center Financing Fund. The fund provides grants to smaller cities and villages to develop community-centered infrastructure such as civic centers, libraries, public pools and auditoriums. In 2015, over two million dollars were awarded to Nebraska communities. LB 884 will give cities of all sizes an important tool to create new investment and job opportunities, help grow the economy, reduce property taxes and enrich the lives of all Nebraskans.
The second session of the One-Hundred and Fourth Legislature is underway and we are busy debating bills that carried over from the 2015 session and introducing new legislation for consideration this year. The second session of the two-year legislative biennium is only 60 days compared to the longer, 90-day first session and while there isn’t as much time to consider legislation, there are still significant issues facing the state that warrant thoughtful deliberation.
Given the time constraints, each senator will be concentrating much of his or her efforts on bills he or she believes should be enacted sooner than later in order to have the greatest positive impact. For me, that bill will be LB 960, the Transportation Innovation Act. Nebraska’s transportation infrastructure is critical to the welfare of our state and its citizens. A safe and functional transportation system is essential to move our children to school and our workers to jobs and our products to market. For the past several years, we have been putting most of our concentration on simply maintaining our existing roads. A statewide expressway system initiated and promised 30 years ago has yet to be completed and Nebraska ranks among the worst in the nation when it comes to deficient bridges.
LB 960 would establish a Transportation Infrastructure Bank to provide funding to accelerate completion of the expressway system and create a county bridge match program to promote the repair and replacement of deficient bridges. In addition, the bill would establish an economic opportunity program within the Nebraska Department of Roads to provide funding for transportation projects that will result in new businesses and expansion of existing businesses. Initial funding for the Infrastructure bank will come from the state’s cash reserve and the bank will be replenished by funds currently flowing to the Department Roads. LB 960 is a collaborative effort between the Legislature’s Transportation and Telecommunications Committee and Governor Pete Ricketts. I am pleased to have the opportunity to sponsor this ground-breaking legislation and moving it forward.
Other measures I have introduced this session include the following:
LB 739 – eliminate the common levy imposed on members of the Learning Community;
LB 812 – exempt custom software used by businesses from the sales tax, bringing Nebraska in line with most states in the country;
LB 912 – require individuals labeled as inactive voters to provide identification prior to voting;
LB 913 – allow for the adoption of the Business Rapid Response to State Declared Disasters Act;
LB 938 – allow for the adoption of the 911 Service System Act to modernize our emergency system; and
LB 977 – provide axel weight exemptions for agriculture vehicles and machinery.
While many of the measures I have introduced are a necessary responsibility for me as chairman of the Transportation and Telecommunications Committee, I will still be actively involved in a number of issues. In particular, I will continue to push for tax relief for all Nebraskans. Last year, I introduced LB 357, which cuts both individual and business income tax rates and increases funding to the Property Tax Relief fund. LB 357 is currently being held by the Revenue Committee and I am diligently working to advance the measure to the full Legislature for consideration. I look forward to the work ahead and to serving my constituents as we decide the policies of importance to Nebraska.
The first session of the One Hundred Fourth Legislature came to an end on May 29. While I am disappointed my priority bill (LB 357) to reduce taxes for families and businesses did not make it to the floor for debate, I am pleased major transportation-related issues were tackled.
Most importantly, the Legislature approved a bill guaranteeing funds for our transportation infrastructure. As the chairperson of the Transportation and Telecommunications Committee, I am keenly aware of the immediate necessity to address over $10 billion in highway needs and to repair nearly 3,000 structurally deficient bridges. I introduced LB 610 to incrementally increase the gas tax by 6 cents over a four-year period. Federal highway funds are becoming unreliable and our state gas tax rate has remained flat for over 20 years, not keeping up with inflation.
Our transportation infrastructure is integral to keeping and attracting businesses to grow our state’s economy. I believe the most appropriate way to ensure we have adequate funding is to tax those who use our roads, including those who travel through the state. Without the fuel tax, the only funding options are either increasing property taxes or diverting General Fund dollars from other government services, such as education and Medicaid.
Another significant transportation bill was LB 629, which regulates ride-sharing operations. In the past few years, transportation network companies have been cropping up across the world and have proven to be a popular transportation option. Uber and Lyft both began operating in Nebraska over a year ago, despite not having authorization to operate in the state. While I generally support the free market principle of limited government, it became clear from other states’ experiences some sort of regulatory oversight was necessary to protect the public who use the service, as well as the drivers who provide the rides. After long and often-contentious negotiations, all interested stakeholders agreed to the provisions of LB 629, including requirements for vehicle inspections, background checks and liability insurance.
Finally, LB 623 was passed by an overwhelming majority of the Legislature to allow drivers licenses for immigrants who qualify under the federal Deferred Action for Childhood Arrivals (DACA) program. Prior to the Legislature’s action, Nebraska was the ONLY state that denied licenses to DACA grantees. We were in danger of becoming uncompetitive in the global market by obstructing a significant portion of our workforce. LB 623 had the backing of large array of groups, including the State Chamber of Commerce, the Omaha Chamber of Commerce, the Lincoln Chamber of Commerce, the Farm Bureau and the Nebraska Cattlemen.
While it was a great accomplishment get these critical matters addressed, many important transportation issues remain for the Transportation and Telecommunications Committee. Over the legislative interim, the committee will be conducting a comprehensive study of our roads system, which will include an examination of our funding sources, allocation and use of those funds by local governments and the structure and efficiency of the Nebraska Department of Roads. The study will include public hearings throughout the state.
Though the Legislature is not in session again until January 2016, my office remains open year-round, and I encourage you to contact me at (402) 471-2730 if you have any questions or concerns regarding your state government.
The Legislature gave final approval to a two-year budget that holds the line on spending as well as gives money back to the taxpayers. Nebraska’s Constitution requires the state to have a balanced budget, which the Legislature establishes on a two-year cycle. The biennium budget passed this year covers fiscal years that begin in July 2015.
Our Appropriation Committee’s initial budget recommendation largely mirrored the one proposed by Governor Ricketts. It focused on funding necessary government functions, including education, Medicaid and correctional services, promoting economic development and limiting increases in expenditures. The average growth of the two-year $8.6 billion budget package was only 3.1%, which is one of the lowest growth rates in the last 15 budget cycles.
Early in the budget debate, the Nebraska Economic Forecasting Board delivered an unexpected surprise, projecting better than anticipated revenues in the coming years. The Legislature demonstrated fiscal restraint and agreed to send the money back to taxpayers. An extra $8 million was added to the already approved $60 million annual increase to the Property Tax Credit Fund. Each year, a total of $204 million in the fund will be dispersed to property tax payers to offset the taxes paid to fund local government bodies such as school districts and counties.
I applaud Governor Ricketts and the Appropriations Committee for bringing forth a responsible budget – one that did not promote wasteful government spending and instead gave money back to whom it belongs; the taxpayer.
The 2015 session has reached the halfway point, and soon we will be spending full days on the legislative floor debating and voting on the many bills introduced this year. For the first half of the session, we have split our days with floor debate in the morning followed by committee hearings in the afternoon. As required by the Nebraska Constitution, public hearings are held on each bill introduced. This year, 663 proposals were brought forth.
While not all 663 bills are advanced from the committee for consideration by the full Legislature, hundreds are deemed worthy of extended discussion. Given that there are only 90 days in the session, the time constraints make it impossible for the Legislature to take up every measure. In order to assure the most important issues are debated, senators are allowed to designate one bill as a priority. This session, three of my bills have been designated as priorities.
I am grateful Senator Curt Friesen of Henderson has prioritized LB 610, which is a bill I introduced that would provide much-needed funding to our transportation infrastructure. The bill would increase the portion of our gas tax that goes to fund our state, city, and county roads and bridges. While I consider myself a fiscal conservative, I have firsthand knowledge (as Chair of the Transportation and Telecommunications Committee) of our immense infrastructure needs and the huge funding gap that exists.
Roads and bridges are the lifeblood of Nebraska. Businesses and industries, including agriculture, recognize a well-maintained infrastructure is needed to move produce from farm to market; to transport freight and product; and to move passengers and employees. In addition, good roads provide incentive for businesses to expand and locate in Nebraska. This infrastructure is vital for emergency services and national security and is a basic necessity for our everyday life. That said, functional roads and bridges are neither free nor cheap.
Consider this: in order to just maintain the nearly 100,000 miles of roads and 20,000 bridges, it costs almost a billion dollars every year. Because our aging bridges across the state have been neglected for so long, Nebraska has the seventh highest percentage of structurally deficient rural bridges in the nation. It is estimated it will cost over $800 million to bring our bridges up to safety standards.
Yet while we have these growing costs, funding for these necessities has not kept up. The federal Highway Trust Fund is declining and losing its value, gas prices have dropped, and cars are becoming more efficient. The state’s current tax on fuel, 25.6 cents, has increased by only one cent in the past 22 years. Neighboring states are in a similar bind – Iowa has just increased its gas tax by 10 cents per gallon and South Dakota raised its tax by 6 cents.
LB 610 takes a very modest and responsible approach. The tax would increase by 1.5 cents every year for just four years for a total of 6 cents. As far as taxes go, the gas tax is probably the most fair because it is based on usage. Those who utilize the roads more will pay more, including those non-Nebraskans traveling through out state.
But not all taxes in Nebraska are fair. As I mentioned in my previous post, I introduced LB 357 to address our excessively high personal and business income taxes. Nebraska has one of the highest top income tax rates compared to our neighbors, putting us at an economic disadvantage for attracting businesses and individuals to fill new jobs. LB 357 would lower the tax brackets over a period of eight years, protecting vital state services while putting funds back in the hands of taxpayers. In addition, LB 357 would provide property tax relief by increasing the amount of money that goes into the Property Tax Credit Fund.
I believe in an overall tax policy that adequately provides for essential government services but does not unfairly burden our businesses and families. For that reason, I have selected LB 357 as my personal priority for this year. LB 357 and LB 610 together make a sound tax policy that will move this state forward for years to come.
2015 Session Underway
The Legislature convened in January and I was elected as the new chairperson for the Legislature’s Transportation and Telecommunications Committee. For the past six weeks I have been responsible for ensuring the 50 bills that have been referred to the committee are scheduled for public hearings and discussed by the committee’s eight members. The committee decides whether the policy proposed in each bill merits consideration by the entire Legislature and either votes to advance a measure, indefinitely postpone it, or hold it until a later date. This process will continue until mid-March.
In addition to these new duties, I am still responsible for the twenty pieces of legislation I have personally sponsored, many of which are related to the transportation and telecommunication industries. This session, I was honored to assist the Nebraska Sesquicentennial Commission by sponsoring the Sesquicentennial License Plate bill (LB 220). A yet to be unveiled license plate will be available for those who want one from October 1st of this year through 2022. The specialty plate will provide the Commission with a valuable fundraising tool as it prepares for the celebration of Nebraska’s 150th anniversary of statehood in 2017. The bill passed unanimously and has already been signed into law by Governor Ricketts.
While LB 220 passed easily, another bill I introduced will present a challenge but will have a greater impact on our state. LB 357 would provide much-needed tax relief to all Nebraskans. The bill would include income tax cuts for individuals, families and businesses as well as bolster our Property Tax Credit Fund.
The Tax Foundation’s 2015 State Business Tax Climate ranks Nebraska in the bottom half of all states with respect to our tax policies. Compared to surrounding states, Nebraska has one of the highest top income tax rates, making it difficult to compete for new businesses and jobs. Over 30 states have already or are in the process of considering tax reform and it is imperative we act now or risk falling behind in economic opportunities.
LB 357 would take a measured approached to ensure any tax cut is paid in full and does not harm essential services. Tax reductions for all brackets would be slowly phased in over a period of 8 years, bringing the top bracket down from 6.84% to 5.92% and the lowest bracket from 2.46% to 1.23%. Continued growth in revenue could trigger further reductions. In addition to the personal income tax cuts, LB 357 would reduce the tax burden on businesses and would increase the amount of credit property owners receive on their tax bills. A majority of these tax cuts would be offset by reducing government spending growth by 1 percent annually, while a very small portion of the lost revenue would be replaced through the state’s Cash Reserve Fund. This savings account is at a record high of over $700 million dollars. That is $700 million dollars of taxpayer dollars that should go back to the taxpayers.
For nearly 150 years, Nebraska has flourished and grown into a state for which we can be proud. With the passage of LB 357, we can continue to grow and with the passage of LB 220, we can display the pride we have in our state, Nebraska.
A bill I introduced to provide funds for public schools to invest in career and technical education had a hearing before the Education Committee on Tuesday. LB 754 would allocate $2 million to the Department of Education to help Nebraska schools improve programs aligned with the state’s workforce needs. It is my firm belief that technical trades can be incorporated into secondary education to equip students with the skills to be successful, contributing members of the workforce.
Successful career education programs have been shown to increase student achievement and lower dropout rates. Furthermore, they prepare students for further education and careers, and promote economic development by providing business and companies with a skilled workforce. We can no longer ignore the importance of providing these opportunities in Nebraska.
Currently, the State of Nebraska provides no funding for career education programs at the K-12 level. Other states, including Kansas and South Dakota, have recently allocated millions of dollars to career and technical education. LB 754 asks for a small, but important investment for the future of our education system, our students, and our state.
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