This week in the Legislature showed the importance of all those civics classes in high school about “how a bill becomes a law”. For the first time this session, the Governor returned a bill with his veto, and it was mine, LB 472.

LB 472 would allow a county board to enact a one half of one percent sales tax, to be used only for the payment of a federal judgment of $25 million or more, and would sunset in 2027 or when the judgment was paid, which ever came first. Property tax would still have to be collected at the maximum fifty cent levy limit, but adding sales tax revenue would help pay off the judgment faster and end that property tax sooner.

A bill needs 25 votes to advance. LB 472 was passed by the Legislature with 43 affirmative votes on April 18, and presented to the Governor. The Governor then has five days and can either sign the bill into law, veto the bill, or let the bill become law without his signature.

LB 472 was returned with a veto on Wednesday. On Thursday, I filed a motion to override the veto. The motion will require 30 yes votes to achieve the override, and I expect it to be taken up early in the week. In the meantime, I will continue discussing the issue and an override vote with my fellow senators.

A potential tax package showed the need for another legislative procedure this week. Because an amendment to LB 289, heard by the Revenue Committee, contained substantially new material, a public hearing was held even though hearings ended some weeks ago. The hearing was also unique as it combined the Revenue, Education, and Retirement Committee members. Nearly seven hours of testimony was given on a revenue package addressing property and sales tax and school funding, with nearly all of those speaking in opposition to the bill. The Revenue Committee will now have to come to a decision on a tax reform package before sending it to the floor for debate.

Another rule of the Legislature concerns the state budget, which must be presented by the Appropriations Committee to the full body by the 70^th day of the first session. That day is May 2^nd.  Serving on Appropriations has meant meeting in executive session nearly every lunch hour and after adjournment several days per week as we put together our recommendations.

One of the final pieces we needed to finalize the state budget fell into place with a Thursday meeting of the State Economic Forecasting Board. The board members look at where we are today and project where they think the state will be financially in the future. Their forecast was $45 million higher for the current fiscal year than their previous projection; and $10 million higher for the next fiscal year (2019/2020).

The increased revenues in the forecast will, by law, go into the cash reserve (known as the rainy day fund) putting the fund by year’s end at $372 million. It’s important to know that the cash reserve/rainy day fund is not like a savings account for future wants. Funds in the cash reserve have been and can be diverted to general fund uses.

And while $45 million is substantial and encouraging, it comes nowhere near meeting all the budget requests from departments, legislative bills and the Governor, especially after cuts made in previous years and projects put on hold. Critical areas include corrections, roads, education and health and medical needs; but we must also consider every state agency, board and commission as well as cash reserve requirements and express obligations of the state.

While property tax relief is not under the purview of the Appropriations Committee, any relief in recent years has been achieved in the budget by use of credits, not through tax revenue. It is my hope that we will make real headway on tax reform with a Revenue Committee bill in this session.

If you would like more in depth information on any bill or topic, I encourage you to contact my office at mdorn@leg.ne.gov, 402-471-2620. The legislative website is also an excellent source, specifically the Unicameral Update publication at www.nebraskalegislature.gov.