The Child Welfare reform package was the result of an interim study conducted last year (LR37) and included 6 different bills: LB821, LB1160, LB820, LB949, LB961, and LB998.

LB821 establishes a 22-member Nebraska Children’s Commission charged with creating a statewide plan to reform child welfare services. The bill also creates a position within the Ombudsman’s office to specifically deal with child-related issues and DHHS.

LB1160 requires DHHS to develop a web-based automated information system to facilitate the flow of information relevant to child welfare data. DHHS is also charged with bringing a nationally recognized entity in to evaluate the state’s child welfare system. The first report is due on Dec. 15^th 2012.

LB820 requires the creation of a Foster Care Reimbursement Committee, under DHHS, in order to standardize the rate structure for children in foster care. It also requires standard licenses for all foster parents not related to the child by blood, marriage, or adoption.

LB949 is a budgetary bill dealing with DHHS. It stems from a performance audit of the child welfare privatization efforts and requires a strategic plan to be included in its annual budget request to the Legislature. This plan will include the main purpose of each program as well as how progress will be measured and a time line for meeting goals.

LB961 reduces the welfare caseload size to between 12 and 17 cases per worker, moves case management back to DHHS and authorizes a pilot program to privatize the eastern service area. A review of the pilot program must be completed before April 1, 2013 with the recommendations going to the Legislature for consideration.

LB998 replaces the Foster Care Review Board with a Foster Care Review Office and a Foster Care Advisory Committee. The Committee appointees will be nominated by the Legislature and submitted to the governor for approval.

These bills represent many hours of negotiations and deliberations to fix some significant problems within the Department of Health and Human services. Much more work is needed to ensure our foster children have the highest care possible but we are aware of the problems and are looking for the best solutions.

A tax cut for Nebraskans was also passed this session (LB970). The bill, proposed by Governor Heineman, would alter income tax brackets in 2014 as follows:

Bracket	Married	Single	Rate
1	0 – 5,999	0 – 2,999	2.46%
2	6,000 – 35,999	3,000 – 17,999	3.51%
3	36,000 – 57,999	18,000 – 28,999	5.01%
4	Over 58,000	Over 29,000	6.84%

Translated, this means a married couple that makes $100,000 adjusted gross income will get an estimated $145 tax cut.

The pipeline consensus was reached with my priority bill, LB1161, and allows the Nebraska Department of Environmental Quality to study oil pipeline routes that go around the Sandhills as promised to Nebraska Citizens. The bill would tighten up eminent domain procedures for carriers, require carriers to reimburse the state for studies and provide for transparency in the process.

Two bills were passed that will directly impact local businesses. The first is LB1080 which provides a tax break for data centers, exempting items that are assembled in Nebraska but shipped outside of the state to be put into service. Yahoo in La Vista has mentioned they could take advantage of this exemption to create more jobs in our community and relocate its factory to Nebraska.

Finally, LB780, is a bill I introduced that will allow microbreweries to expand their capacity. Nebraska has a large number of brewpubs and microbreweries including Empyrean of Lincoln, Schilling Bridge of Pawnee City, and my personal favorite, Lucky Bucket of La Vista. Lucky Bucket was going to reach the 10,000 gallon capacity in the near future, this bill allows them to continue expanding local business and enjoy continued success.

The 2012 session saw many interesting bills, some that passed, more that didn’t. I look forward to what the 2013 session has to offer with new senators, new bills, and new issues. Please contact my office if you have any questions, comments, or suggestions. Thank you for allowing me to serve for another year in the Nebraska Unicameral.

The $7.2 billion budget includes funding for important state obligations such as child welfare reform, capitol construction, and services for the developmentally disabled.  The 2011-2013 budget’s biggest expenditure is state aid to schools, but it is considerably less than anticipated and the recommendation leaves only $17.6 million available for a number of other proposals, including the Governor’s tax reduction plan.  Despite recent improvements in the economy, it is projected that the state will be facing a $461 million shortfall for the 2013-2015 budget.

In crafting the two-year budget last year, the state aid formula provided for $880 million in aid going to Nebraska school districts.  However, more recent projections for the 2012-13 school year have lowered that number, due in part to higher property valuations, and the Appropriations Committee has recommended providing only $837 million.  In addition, next year will be the first time in four years that the school districts will not be receiving assistance from federal funds.

Recognizing the competing needs for state funds, the Governor has offered to trim his tax-cut package by almost a third.  As originally proposed, the plan would expand the tax brackets, lower individual income tax rates, lower the corporate tax rates to assist small businesses and eliminate the inheritance tax.  It was estimated to cost $317 million over the next three years.  Under the most recent proposal, the inheritance tax and the corporate income tax rate would not change, but low-and middle-income taxpayers would still realize some tax relief.

The Legislature will be discussing the Appropriations Committee’s recommendation in the coming weeks and adjustments may certainly be made; however, I praise the committee for taking the fist steps in the daunting task of holding the line on spending while adequately funding the state’s many needs.

After months and months of sometimes contentious debate, the Legislature has finally advanced legislation that makes substantial changes to the Commission on Industrial Relations.  LB 397 is on track to be passed in the last few days remaining in this year’s session and go to the Governor for approval.

 Early on in the process, I did not support the bill as proposed by a majority of my colleagues on the Business and Labor Committee, of which I am a member.  I believe this to be one of the most important issues facing Nebraska and had assured my constituents that I would not support any legislation that did not represent significant, meaningful and comprehensive reform.  Long hours of negotiations between senators, the governor’s office and business and labor interests resulted in amendments to LB 397 that finally embodies real change and is a major improvement to Nebraska’s unique system for resolving public employee contract disputes.

 Over 43,000 Nebraskans are public employees and take part in the collective bargaining process.   Our state law, however, prohibits unions from striking and instead sends labor disputes to a five-judge panel to decide such issues.  Recent CIR decisions have resulted in large, unforeseeable financial obligations for local governments and made it clear that the current process was not working as intended, particularly in an unpredictable economy. 

 This has been an issue that has caused much turmoil and great division in other states across the nation.  Though at times discussions became heated, in our state, all sides continued to work together toward a seemingly impossible resolution.  I have a newfound respect for our legislative process and I am proud at the way Nebraskans – our public and private employees, our business owners and our local governmental officials – tackled this issue with respectful and thoughtful resolve.

 A copy of LB 397 can be found on the Legislature’s website http://www.nebraskalegislature.gov/.

            Prior to this week, the state faced a $986 million general fund shortfall between expected revenues and necessary expenditures.  However, the Nebraska Economic Forecasting Advisory Board recently projected healthier income tax returns would result in a boost to the state coffers of $82.5 million by the end of the fiscal year.  Despite the board’s optimism that the economy is slowly recovering from the recession and that the increase in revenue should continue through the two-year cycle, the Legislature still made difficult cuts and significant budget adjustments. 

            Overall, state spending will increase at an average of 2.6% during the two years, but much of that increase can be attributed to replacing the one-time funds given to Nebraska through the federal American Recovery and Reinvestment Act.  Most of these funds went to public school districts to prevent harmful cuts to education during the peak of the recession.  Budget-related actions included cutting Childrens Health Insurance (SCHIP) and Medicaid provider rates by 2.5%; eliminating $22 million in state aid to cities, counties and natural resource districts; and adjusting the state aid to schools formula, resulting in $410 million less to schools.

            In addition, $105 million from the state’s cash reserve fund was transferred in order to balance the budget, as required by the Nebraska Constitution.  This amount could have been much more, but the Legislature voted to put the extra projected funds into the cash reserve, otherwise known as the “rainy day fund”.  

            I applaud the Appropriations Committee for leading the rest of the Legislature in exercising fiscal restraint and for saving for future tough times.  It is common-sense budgeting practices that have resulted in Nebraska recently being identified as the nation’s second least economically stressed state by the Associated Press’ Economic Stress Index.  That is something for which we Nebraska should be proud.

LB 589 is not only very important to my legislative district, it is important to communities across the entire state.  Recently, the Nebraska Department of Roads adopted a policy that would prohibit cities, counties and villages from using state highways with speed limits over 45 M.P.H. for special events such as parades, marathons, street dances and bike races.  This new rule effectively ends Papillion’s Dualthon and the Triathlon; events that attract participants from all over the country and bring thousands of dollars into the community and into the state. 

According to the Department of Roads, the concern is that of liability.  My bill addresses this issue by requiring the Department to authorize the encroachment of the state highway system if the city, county, or village waives all rights of recovery against the state for any damages or liability.   A public hearing on LB 589 was held in front of the Transportation and Telecommunications Committee on March 8^th.  The committee has not yet advanced the bill to the entire Legislature for consideration, but the Speaker’s priority designation should help get the bill moving.

These special events are important to Nebraska.  These events celebrate our heritage, they strengthen our communities, they attract people from other states and they are valuable to the economy.  Passage of LB 589 will ensure that these events continue throughout our state for years to come.

Given the time constraints of the session, there is simply not enough time to discuss all the proposals that have been introduced.  Those issues that have been identified as priorities for the state are moved ahead of other bills, but there is still no guarantee a particular bill will be debated and passed.

Among the topics that will be the focus of the Legislature’s deliberations include our tax policy, the child welfare system, state aid to schools, abortion, roads funding, DUI laws, collective bargaining for public employees and water management.  Of course, the other big issue will be the state’s budget.  Before the end of the session in June, the Legislature must also find a way to close a nearly $1 billion budget gap.

The progress of these various measures can be monitored from the Legislature’s website “http://nebraskalegislature.gov/”.  Debate on legislation is also broadcast via live video stream on this site.  Your opinion is important to me, so I encourage you to pay attention to these issues and provide your input as a Nebraska citizen.

My time has been spent meeting people and learning the ins and outs of legislature. I would appreciate any and all comments that you may have for me and my staff.

My staff is made up of Lisa Johns, my legislative aide and Anne Duda, my administrative assistant.   Lisa joined me from Sen. Gay’s office, she has 18 years experience working in the Legislature.  Anne joined us from the Platte Institute and this is her first time working for the Legislature.  They provide the support that is needed to properly represent District 14.  It looks like the session is off to a good start.



Please feel free to contact me with any issues or concerns you may have regarding public policy or your state government, and let me know how I may assist you. My staff in my State Capitol office in Lincoln look forward to hearing from you and assisting you. Please feel free to contact me using the contact information on the right.

Sincerely,
Sen. Jim Smith