Welcome

January 7th, 2015

Thank you for visiting my website. It is an honor to represent the people of the 34th legislative district in the Nebraska Unicameral Legislature.

You’ll find my contact information on the right side of this page, as well as a list of the bills I’ve introduced this session and the committees on which I serve. Please feel free to contact me and my staff about proposed legislation or any other issues you would like to address.

Sincerely,
Sen. Curt Friesen

Visitors to the State Capitol

April 17th, 2015

Forty 4th graders, including teachers and parents, from Cedar Hollow Elementary in Grand Island visited my office in conjunction with their tour of the State Capitol on Thursday afternoon.    I encourage any residents of Legislative District 34 while in Lincoln to stop by my office (Room 1403) and say hello.

Weekly Newsletter to District 34

April 17th, 2015

Full day debate continued in the Legislature last week as we began discussing three prison reform bills that are aimed at reducing Nebraska’s prison overcrowding while trying to find lower-cost alternatives. This issue was brought to the forefront when Niko Jenkins was released from prison without treatment for mental health issues and went on a murder spree in Omaha. Hearings were held last summer by a special legislative investigative committee to find out what went wrong with our penal system that allowed this to happen. The result of these hearings brought several bills with LB 605 as the primary reform measure.

The underlying idea in LB 605 is that it begins to move nonviolent offenders toward probation and treatment of mental health issues rather than prison, and it increases penalties for some violent and sex offenses. Proponents hope these reforms reduce the prison population which are now at nearly 160 percent of capacity. The bill gives inmates incentives to apply for parole and then be subject to intense supervision and treatment for mental health or addiction issues they may have. Currently, many inmates serve their full sentences and leave without supervision or treatment. There is an expectation that these new reforms could reduce the number of offenders who repeat crimes and return to prison.

LB 605 was drafted in conjunction with the Justice Center of the Council of State Governments, which has helped about 20 other states reduce spending on corrections by utilizing lower-cost alternatives to incarceration, such as probation, drug courts and parole.

Opponents of the bill, the Nebraska Attorney General Doug Peterson, county prosecutors and Governor Pete Ricketts, did not like portions of the bill that would do away with mandatory minimum sentences for some criminals and accelerate the parole eligibility for others. Prosecutors pointed their dislike at a provision that would restore a state law requiring the minimum sentence for a serious felony to be no longer than one-third the length of the maximum sentence. That, they said, would make someone sentenced to 50 years in prison eligible for parole in about 8.5 years if the inmate didn’t lose any good time. Some said that the one-third rule would do little to reduce prison overcrowding, and instead, the Legislature needs to take another look at building new prisons. Even though someone is eligible for parole does not mean they will be paroled. What this attempts to do is give Corrections notice that this person is eligible for parole and he should be scheduled for any treatment programs that are needed.

Defenders of the one-third rule said that such sentences give an incentive to inmates to behave and take advantage of educational and rehabilitation programs so they can be released on parole supervision.

Senators will meet with prosecutors to find a compromise on the one-third rule before the bill comes up for second round of debate. The bill advanced to the next stage of debate with an agreement from Judiciary Committee members to continue negotiating a compromise on portions of the bill that opponents do not support.

A second prison reform bill, LB 598 was forwarded to second round of consideration. It would require the Department of Correctional Services to adopt rules on how segregation of prisoners would be conducted and for which reasons. About 300 inmates are in segregated housing at this time. Inmates held in segregation need intense treatment and should not be released straight from segregated housing and into public life.

The bill also creates the Office of Inspector General of the Nebraska Correctional System. It would set a time frame for ensuring parole board independence by moving primary responsibility for the administration of parole out of the Department of Correctional Services. This position would monitor all prison activities to make sure they are complying with all the rules and regulations they are required to follow.

LB 173 is the third of the reform bills. LB 173 makes changes to the state’s habitual criminal statute so that it applies only to violent offenses. The new definition includes the offenses listed as violent offenses for purposes of the Correctional System Overcrowding Emergency Act. The definition also includes sexual assault of a child and motor vehicle homicide. There is some question as to whether too many offenses were removed from the habitual offender list used in that determination.

LB 173 would also eliminate the mandatory minimum sentence for a habitual criminal enhancement. The minimum penalty would be 10 years, instead of a 10 or 26 year mandatory minimum. This measure was also forwarded to the second stage of consideration.

Prison reform is very complex legislation and I do depend on the Judiciary Committee members for their recommendations as they have spent a large amount of time researching this over the last year. Approaching the problem from this direction I feel is a better solution than building a new prison. New prisons are expensive and do not address the underlying problem of lack of treatment as the cure for recidivism.

Weekly Newsletter to District 34

April 10th, 2015

A third attempt in as many years on expanding Medicaid was considered last week. LB 472, introduced by Sen. Kathy Campbell and prioritized by the Health and Human Services Committee would help redesign our Medicaid program, creating a Nebraska-specific plan for better, cost-effective care, and would close the coverage gap, providing health insurance to working Nebraskans with low incomes that cannot afford it under the current system.

LB 472 creates a Medicaid Redesign Task Force, composed of members of the Legislative and the Executive branches, which will review the Medicaid program and provide recommendations to improve quality, innovate, and save costs. Closing the coverage gap would bring $2.2 billion back to our state to utilize for redesigning Medicaid and health care innovation. The bill would allow the Department of Health and Human Services to work with the federal government to create a coverage plan unique to Nebraska, with some individuals getting coverage in the private marketplace, and others getting coverage under Medicaid.

The bill is intended to provide Medicaid coverage to a newly eligible population of adults ages 19-65 with income below 133% of the federal poverty level. Senator Campbell handed out to each of us information on how many uninsured people there were in our legislative districts. Legislative District 34 has 1274 individuals that fall into that category.

LB 472 would allow approximately 54,000 Nebraskans to access health care on the private insurance market with costs covered by Medicaid with a 100% federal match from now through 2016. Later 95% will be covered in 2017, 94% in 2018, 93% in 2019, and 90% thereafter. At least $2.2 billion in funds would be returned to Nebraska’s economy through these funds between now and 2020. It projects that there will also be cost savings in other areas of the state budget to help offset any costs to the state, including savings from corrections, the state disability program, drug assistance programs, and behavioral health.

LB 472 sets out a framework to redesign Medicaid and close the coverage gap, and provides the Governor and the Department of Health and Human Services broad latitude to design and implement a plan for Nebraska. It also leaves us with many unknowns and very few details on how this would be implemented. It reminds me of the Affordable Care Act in that we should pass this and then find out what is in it.

The bill requires most enrollees to contribute up to 2% of their income to the cost of insurance, unless they engage in wellness activities. Individuals that use the Emergency Room for a non-emergency will also face a co-pay of up to $50. LB 472 allows Nebraskans to have coverage for important preventive care like health screenings, which is vital to keeping health costs down. It also emphasizes wellness activities, like yearly exams, physicals or screenings that can lead to early detection of conditions in need of treatment. If individuals engage in wellness activities, they will be exempt from the 2% income contribution.

The bill would encourage and explore several different innovative approaches that could improve the overall health of Nebraskans and our health care system, and it would use federal dollars to do so.

LB 472 would pilot the use of patient-centered medical homes, health homes, accountable care organizations, and value-based payments. These approaches would help ensure people manage their health conditions, coordinate medical care, and stay healthy.

Supporters of this measure say that a lack of mental health services and substance abuse treatment is a primary cause of reoffending and recidivism and a return to jail or prison. LB 472 could help keep nearly 400 people from returning to prison in one year; could result in gross savings to the state’s correctional budget of nearly $11 million in one year; and could save additional state and county dollars that have already been invested or will be invested in corrections reform.

Opponents, including Governor Ricketts, say expanding Medicaid would be a risky proposition for taxpayers, not only because of the expense, but also because “we cannot trust the federal government’s long-term financial commitment to state programs.” With the federal government showing $18+ trillion of debt that sooner or later will need to be addressed I truly believe that states will be left funding more and more of the program. When looking at the number of individuals that could qualify for this program the number used is 54,000. A study conducted by two University of Nebraska at Kearney professors predicted the number possibly qualifying as 79,500. These numbers could increase dramatically if this program encourages small business owners to drop coverage for employees and pushes them into Medicaid coverage. The system is broken and this does nothing to hold down health care costs. We cannot fix the system by throwing more money at the problem whether it is federal or state dollars.

Supporters say we are leaving federal dollars on the table and we should take them and inject that money into the economy and create jobs. I will say that we cannot create good jobs with tax money that should not have been taken from us in the first place.

Someone needs to say no and with the federal government unable to stop spending that leaves it to us to say no. We should be encouraging businesses to maintain coverage and keep some responsibility of living a healthy lifestyle with the individual.

After four hours of debate it was evident that supporters of LB 472 could not maintain a filibuster and so on a vote of 28-16 the bill was bracketed (or postponed) until the last day of the session, which means it is dead for the rest of this session. However, it leaves it available to return to next session with time to work on changes during the summer. I am unsure if there is a solution to this issue.

Weekly Newsletter to District 34

April 2nd, 2015

Last week we started discussion on LB 106, introduced by Sen. Dan Watermeier.  LB 106 is the Livestock Operation Siting and Expansion Act.  As introduced, the bill would provide for the Department of Agriculture to develop a matrix for counties to use when determining whether to approve an application for a livestock operating siting permit.  If the permit is denied, the applicant could appeal to a siting review board and eventually to the district court. The purpose of this bill was to create a uniform method among counties for siting new livestock facilities in Nebraska. Although we have grown the cattle on feed numbers in this state, we are losing the number of hogs we feed. Packing plants are looking at investing hundreds of thousands of dollars in upgrading current processing plants, and with declining hog numbers,   they are forced to import hogs for slaughter. If this continues they will close plants and move to where the hogs are located.

I’ve had a number of phone calls and emails offering their opinion on both sides of this issue.  And truthfully, if an amendment introduced by Sen. Watermeier would not have been adopted, I wouldn’t have supported the bill.  His amendment allows counties to decide on the matrix and thus, local control will prevail.  In the end we moved LB106 forward and all that remains is a requirement that the department of Agriculture will develop a matrix developed with scientific methodology and peer reviewed that will be offered for counties to use in their livestock permitting process. The amended bill lacks the uniformity that would have been provided by the original bill, but now it will be up to individual counties on whether they want to use the matrix or not.

Agricultural groups, including myself, have supported LB 106 with the hopes of increasing economic development by encouraging new and expanded livestock operations. Currently the difficulties in siting a facility prevent some from even trying. Hopefully this will at least provide some guidance for those willing to expand livestock production in this state.

A bill I designated as my priority bill and talked about in an earlier newsletter, LB 610, was also debated last week.  This bill will increase the fixed gas tax rate by 1.5 cents every year for four years.  Of the two components of the fixed rate, the portion allocated to the Nebraska Department of Roads will increase ½ cent every year, from 7.5 cents to 9.5 cents.  The portion that is allocated to cities and counties will increase one cent every year from 2.8 cents to 6.8 cents.  Beginning January 2019, the total fixed motor fuels tax rate would be 16.3 cents per gallon.  By the fourth year this will provide $25.4 million for use by the Department of Roads and $50.8 million for use by counties and cities for road maintenance and bridge repairs. The county and city share would go into the Highway Allocation Fund which is divided evenly between counties and cities. The county share is then distributed to individual counties based upon a formula that includes population, lineal feet of bridges, motor vehicle registrations, miles of county roads, and the value of farm products.

I still feel that our roads and bridges should be funded with fuel taxes.  A user fee.  Once again, I will mention that the bridges in this state are in bad shape.  There are 11,700 bridges 20 feet or longer that are maintained by counties and cities and 20% of those bridges are deficient. For those communities that are not located on the interstate system, our two-lane roads need to be well maintained if those communities are able to grow. I feel that one of the primary duties of the state is to develop and maintain our infrastructure so all areas of the state have access to markets nationwide. In the last 22 years our gas tax has only increased by 1 cent.  It’s time to catch up on our road and bridge maintenance funding needs.

The cost of repairing a vehicle, such as replacing tires or shocks, because of the poor condition of our roads, will cost a person far more than would the increase in gas taxes if LB 610 were passed. For instance, under the provisions of the bill, if a person drives an average of 15,000 miles a year, at 30 miles per gallon, your tax increase would be $7.50.  A far cry from the cost of a new tire. Traveling only a few miles out of your way to avoid a bad road or low capacity bridge costs dollars and time which reduce our productivity and increase our cost of getting our products to market. Amendments may be coming that would direct a larger portion of the money raised to counties as they, unlike cities, only have access to property taxes to fund county roads. And if that is the case, our levies could be lowered and that would mean property tax relief.  We will see what the next round of debate brings.

 

 

 

 

 

 

 

Weekly Newsletter to District 34

March 27th, 2015

From the very start of my campaign to where we are today the biggest issue I heard from you, the constituent, was that property taxes were too high and we needed to find a way to lower them. It is still my goal to find a way to do just that. In order to do that we need to look at a different method of funding K-12 education – because the current method of distributing state aid to schools is not working as well as it was intended back in 1990 when it originated.

LB 323 is a bill that may find a new method by creating the School Financing Review Commission. The Commission will be tasked with conducting an in-depth review of the financing of public elementary and secondary schools in Nebraska. The School Financing Review Commission will consist of 19 members representing the three branches of government, as well as rural and urban public school districts, post-secondary education, educational services units, and two at-large members. The Commission will examine the current school funding system, how current state aid is distributed (TEEOSA), and its reliance on different tax sources, and will make recommendations to the Legislature aimed at ensuring that school funding is balanced in its funding sources, and fairly distributed to all schools, while maintaining a high standard of education for all students.

In 1988, Governor Kay Orr was required under LB 940 to appoint the 16 members to the original Nebraska School Financing Review Commission. That Commission was created to perform an in-depth and objective review of the funding of Nebraska’s public school system. The Commission was specifically charged with the duty to examine whether or not income as a revenue source and indicator of wealth should play a larger role in school finance. It also was to look at methods to reduce the burden on the property tax for support of schools and consider other state aid distribution formulas that provide greater equity for students and taxpayers.

Sound familiar? Achieving a more balanced way to fund education and also finding a way to lower property taxes are not new issues. It is difficult to find solutions especially in a state that is split rural and urban. Early in the session it seemed as though there would be numerous bills that would deal with this issue, but as time has ensued, I have not seen any proposals advance out of the Education Committee. I’m starting to feel that we will accomplish very little in regard to long term property tax relief.

The 1988 Commission, over an 18-month period, held 21 meetings, five public hearings and listened to dozens of presentations by staff and outside experts in order to arrive at its conclusions. What the commission heard time and time again at these hearings was a resounding support for the concept of a tax shift away from the property tax for support of public schools.
LB 1059 (1990) was the embodiment of the final report from the School Financing Review Commission. It was meant to produce a greater equity of educational opportunity for each Nebraska student enrolled in public schools regardless of the student’s geographic residence. Finally, the bill would address the on-going issue of over-reliance upon property taxes to fund public education and the need to provide tax relief to property owners.

But times have changed. With the increase in agricultural land values reaching 30-40% a year we now have property taxes reaching $90+ per acre in some school districts. This brings property tax into the top five highest items in the cost of raising a crop. This is not sustainable in the short or long term success of agriculture in Nebraska.

LB 323 is structured to mimic the original 1988 School Financing Review Commission. And there is hope that we can have a successful outcome in providing property tax relief by once again restructuring the way we fund education. The bill is still under consideration by the Education Committee at this time. Senator Al Davis, the introducer is hopeful the committee will soon meet to advance it to the floor so the entire legislative body can discuss whether or not this Commission can be created to move forward in finding a new educational funding mechanism for our state.
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Weekly Newsletter to District 34

March 20th, 2015

In Natural Resources Committee we heard testimony on several bills that dealt with Nebraska’s public power industry. Those bills included:

LB 141, introduced by Senator Ken Schilz and made a priority of the Committee, makes changes to the Public Entities Mandated Project Charges Act, which was passed as LB 548 in 2006. The original act authorizes the issuance of bonds by the public entities to finance capital projects mandated by federal or state law or by a regulatory agency, for example, the Environmental Protection Agency. This legislation was designed for use by the Public Power industry in the state. Some of the new regulations being mandated by the EPA will require power plant modifications that could cost millions of dollars. The act also authorizes a public entity to establish a mandated project charge on customer bills to pay bond holders. This special purpose entity is now required by many bond holders.

The special purpose entity in LB 141 would be created by the Public Entities Board, would be a corporation of the state, and would be protected from the general debts of the issuing public entity. This entity would be governed by a three-person board of directors appointed from among the board members of the special entity. Rating agencies consider the special purpose entity to be a bankruptcy remote entity which protects bond holders in the event of a public entity bankruptcy. The proposed changes also provide for the public entity to pledge the proceeds of the mandated project charge to secure the bonds. The ultimate goal of this legislation is to allow the public entities to complete mandated projects at a lower cost. So basically, this bill pledges more of the revenue stream towards the payment of the bonds so there won’t be a default, and so that lowers bond holders risk, which raises the bond rating and therefore saves the customers money. LB 141 has been advanced to the full Legislature.

LB 469, introduced by Sen. Jim Smith and prioritized by Sen. Brett Lindstrom incorporates the provisions of LB 583, which was introduced by Sen. Ken Schilz. LB 469 as amended by the Committee, requires that the Nebraska Department of Environmental Quality (DEQ) provide a copy of a state plan for regulating carbon dioxide emission to the State Energy Office (SEO) prior to submitting such plan to the U.S. Environmental Protection Agency. The SEO is to prepare an assessment of the plan’s effect on: electric generating capacity that could retire or change the fuel used by our coal fired power plants; stranded investments (which would be current plants that may be running below designed capacity); investments needed to offset electric generating capacity changes; risks to electric reliability; electricity prices; employment; the SEO is to finish the report within 30 days after receipt and submit it to the Legislature; the Legislature may vote on a nonbinding legislative resolution on the report’s findings; the DEQ is to submit the final state plan to the Legislature; and clarify that nothing in this act is to prevent DEQ from complying with federal deadlines.

The bill also lists additional duties of the SEO by adding the duties of developing a strategic state energy plan; developing and disseminating transparent and objective energy information and analysis, while using existing resources; maximizing funding to the state for energy planning; monitoring energy transmission planning and energy infrastructure and making policy recommendations to the Governor and Legislature. The information in this report would show us what the potential economic impact would be from EPA regulations that are being proposed by the EPA on the coal generating facilities that we depend on in this state. LB 469 has been advanced to the full Legislature.

An additional bill heard by the Committee, introduced and prioritized by Sen. Ken Haar repeals
several requirements for approving a Certified Renewable Export Facility (CREF) by the Nebraska Power
Review Board. LB 407 would mostly impact the development of wind farms in Nebraska. Since Nebraska is a power surplus state, which means we generate more power than we use, wind generation power needs to be exported. A coal fired power plant needs about 24 hours’ notice to begin ramping up production when the wind ceases to blow. This means that the more wind generation we depend on the more we must depend on natural gas fired generation to bridge the gap when coal fired plants cannot respond quickly enough. The requirements repealed are: a showing by the CREF that it has a power purchase agreement for at least ninety percent of the output to an entity outside the state of Nebraska; allowing public power districts the right of first refusal to purchase ten percent of the CREF’s output; and the ability of the Power Review Board to reject the project on a showing of a substantial risk of creating stranded assets.

The bill also repeals an incumbent public power district the right of first refusal to build transmission projects ordered by a regional transmission organization such as the Southwest Power Pool of which we are a member. Although prioritized, the Natural Resources Committee has not advanced LB 407 to the full Legislature.
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Weekly Newsletter to District 34

March 13th, 2015

It’s hard to imagine that the Legislature has already reached the half-way mark of this 90-day session. We have had several “extended debates” and it seems that patience is a virtue that not everyone is blessed with.

Committee hearings will conclude soon, with full-day floor debate scheduled to begin March 23rd. March 12th was the deadline for Senators to designate their personal priority bills, which generally are considered before other measures for floor debate.
I have designated LB 610, introduced by Senator Jim Smith of Papillion, as my personal priority bill. The bill will increase the fixed motor fuels tax rate by 1.5 cents every year for four years. Of the two components of the fixed rate, the portion allocated to the Nebraska Department of Roads will increase ½ cent every year, from 7.5 cents to 9.5 cents. The portion that is allocated to cities and counties will increase one cent every year from 2.8 cents to 6.8 cents. Beginning January 2019, the total fixed motor fuels tax rate would be 16.3 cents per gallon. By the fourth year this will provide $25.4 million for use by the Department of Roads and $50.8 million for use by counties for roads and bridges.

I have always felt that our roads and bridges should be funded with motor vehicle fuel taxes. One of the core obligations of the State should be to build and maintain our transportation infrastructure. The recent study by the Transportation Committee last year pointed out the number of bridges we have in this state and the number of deficient bridges that counties are dealing with. With roughly 11,700 bridges that are 20’ or longer that cities and counties are responsible for, and 20% of those bridges being deficient, the study estimated that the cost of rebuilding our deficient bridges could reach several billion dollars. I believe LB 610 would answer the demand across the state for road and bridge repair and would also help our counties with property tax relief by providing more dollars from the motor vehicle fuel tax.

In the next 45 days the Legislature has many major issues to address including repealing the death penalty, prison reform, drivers licenses for DACA recipients, repealing the motorcycle helmet law, agri-tourism promotion, property tax relief, school finance, medical marijuana, Medicaid and the state budget. Unfortunately so far there are no bills that have been passed out of committee that will give us meaningful property tax relief. So far the bills such as LB350 that would have lowered ag land valuation from 75% to 65% have not received enough support to make it out of committee. Senator Smith’s LB357 that would have lowered income taxes and transferred $40 million to the property tax relief fund is still in committee. Several Senators have used their priority designation on bills that so far do not have the votes to make it to the floor. It is still possible that some of these bills could make it out of committee but we are running out of time.

So far this session we have:
- Introduced 663 bills
- 16 have been Indefinitely Postponed
- 25 have been passed into law by the Legislature
- 58 have been signed by the Governor

On Thursday last week the Legislature passed LB 164, a bill I introduced that allowed Natural Resources Districts to adopt a biennial budget instead of an annual budget. The bill passed 44-0 and is awaiting the Governor’s signature.

Time is not on our side, but I think just as prior Legislatures have done, we will ensure the state’s business is completed. The only thing that we are constitutionally required to accomplish is to pass a balanced budget. With the temperature heating up inside the Capitol and outside I’m starting to get spring fever and want to get started with spring fieldwork like the rest my peers. Again I ask that if you have any concerns that you contact me and hopefully we can address them.

Weekly Newsletter to District 34

March 6th, 2015

Last week the Transportation and Telecommunications Committee held a lengthy hearing on a bill that brought dozens of testifiers to the Capitol. LB 623 would allow driver’s licenses or identification cards to be issued to young adults who qualify for the federal Deferred Action for Childhood Arrivals (DACA) program.

The DACA recipients are children of immigrants who settled in the United States without documentation or legal status. Many of the young immigrants were children and had no voice in whether they would come to the United States. DACA immigrants have deferred protective status granted as a result of presidential executive action rather than action by Congress.

President Barack Obama started the deferred action program in 2012 to help immigrants who were brought to the U.S. illegally as children, a population advocates refer to as “dreamers.” The president’s executive action immediately drew fire from opponents of illegal immigration. Individuals who meet the following criteria can apply for deferred action:

 Applicants for deferred action must be under 31 years of age as of June 15, 2012;

 Came to the U.S. while under the age of 16;

 Have continuously resided in the U.S. from June 15, 2007 to the present. (For purposes of calculating this five year period, brief and innocent absences from the United States for humanitarian reasons will not be included);

 Entered the U.S. without inspection or fell out of lawful visa status before June 15, 2012;

 Were physically present in the United States on June 15, 2012, and at the time of making the request for consideration of deferred action with U.S. Citizenship and Immigration Services;

 Are currently in school, have graduated from high school, have obtained a GED, or have been honorably discharged from the Coast Guard or armed forces;

 Have not been convicted of a felony offense, a significant misdemeanor, or more than three misdemeanors of any kind; and

 Do not pose a threat to national security or public safety.

About 2,700 immigrants have received deferred status in Nebraska.

Most states opted to grant driver’s licenses to deferred action recipients, but former Governor Dave Heineman argued that state law prohibited public benefits from going to those who lack legal status. Nebraska is now the only state to deny a driver’s license to these immigrants.

A driver’s license can serve many purposes beyond allowing someone to operate a motor vehicle. Employers require a valid ID of their employees. Banks require valid identification for people to open accounts, and airlines need a driver license or ID card to identify their passengers.

Many supporters of LB 623, including the Nebraska Cattlemen, told the committee members that by having a driver’s license deferred action recipients would be able to drive to school, to their jobs, to pick up their children from daycare as well as other activities needed to be productive in Nebraska. It was stated that the immigrant labor pool fills a varied and diverse need within our state. Hotels, restaurants, nurseries, construction of all kinds, health care, senior care, food processing and most certainly the business of agriculture are all very dependent upon these men and women.

Opponents argued that granting them driving privileges makes it easier for them to compete for jobs with underemployed or unemployed Nebraskans. Nebraska also has one of the lowest unemployment rates in the country so this is not a valid argument.

Senator Nordquist, the sponsor of LB 623, said that Nebraska has invested in the “dreamers” through its educational system and preventing them from driving only makes it harder for the state to reap a return on that investment. Most of these young people call Nebraska home because this is the only home they know.

If this proposal is passed, it would reaffirm the original legislative intent of LB 215 (2011) regarding the eligibility of certain individuals to obtain a motor vehicle license or state identification card. Thus, immigrants who are qualified under the federal Deferred Action for Childhood Arrivals program would be eligible to apply for a driver’s license or ID card. This driver’s license or ID card would only be valid for the duration of the DACA program and would expire immediately if this program would not be renewed.

We already allow others with a deferred action status to obtain driver’s licenses. It just makes sense to allow Nebraska DACA individuals to acquire a driver’s license to help them become productive tax paying citizens. Under the DACA program, eligible immigrants are deferred from deportation for a period of two years with the possibility of renewal at the end of those two years.

Weekly Newsletter to District 34

February 27th, 2015

Last week I initiated a discussion on how property taxes and school financing work in conjunction with each other.  As promised, this newsletter continues where I left off.

While the basic concept of LB 1059 has not changed since 1990, the statutes governing state aid have been tweaked several times.  Many of those changes were made to try to direct equalization aid to districts with needs such as high transportation costs, high demand for special education or large number of students living in poverty.

Local property taxes are generated from a school district’s tax levy and the amount of value placed upon homes, businesses and agricultural property for tax purposes in its jurisdiction.  School districts are among the 31 types of political subdivisions that rely on property tax dollars in Nebraska.  Among these are cities, counties, community colleges, natural resource districts, and sanitary improvement districts.  But school districts use 60 percent of all property taxes collected in the state.

While all Nebraska school districts receive some state funding, it is important to note that not every school district receives funding from every state source.

Since the passage of LB 1059, the Legislature has tried other ways to curb schools’ reliance on local property taxes, including the property tax limit passed in 1996.  By law, the maximum property tax levy for school districts is $1.05 per $100 of property value.

The recurring message from property owners across the state is the same:  they pay too much in property taxes.  And the push to reduce property taxes has been a recurring theme in the debate over how schools are funded.  That point was consistently raised during debate of LB 1059 in 1990 and again took center stage during the Tax Modernization Committee and Education Committee hearings in 2013.

LB 1059 tried to address these concerns by increasing sales and income taxes to take some of the pressure off property taxes as a school funding source.  LB 1114 (1996) established the property tax levy limit.

Nonetheless, Nebraska today relies more on local property taxes to fund public schools than 48 other states.

The heavy reliance of local property taxes and low level of state support in Nebraska have been noted in four major tax studies in the state’s history: 1) a 1962 study (McClelland) 2) the 1988 “Syracuse Study”; 3) the 2007 Burling Commission; and finally, the Tax Modernization Committee of 2013.

In 1972 voters approved a constitutional amendment which allowed agricultural land to be valued in a non-uniform manner relative to other property.  Agricultural land can be valued at its market value in agricultural use under this provision.  The voters passed a subsequent amendment of this same language in 1990, after a 1987 Nebraska Supreme Court decision invalidated agricultural land valuation practices in use at that time.  This amendment authorized the current practice of valuation of agricultural land at a reduced percentage of its agricultural use market value.  Today, Nebraska state law authorizes valuation of such property at 75% of market value in agricultural use.

Property taxes in the rural areas of the state have increased significantly compared to the urban areas.  For instance, in Hamilton County agricultural property taxes have risen 180% over the last 10 years.  In some urban areas property taxes have only risen 40% over the past 10 years.  With most government subsidies being phased out and producers’ margins at break even or below it is no longer a fair and equitable tax.   This year there are a two bills (LB 293 and LB 350) that address the dramatic rise of agriculture valuations, which have caused significant increases in property taxes.  Each bill changes the current rate of valuation from seventy-five percent of its actual value to sixty-five percent.

I don’t see these bills as an absolute answer to increased property taxes but as one way we can start chipping away at the problem.  Lowering the valuation of agricultural land down to 65% provides little relief to the rural areas of the state.  Schools will just raise the levy and so the money will come from the same people that pay the high property taxes.   I would rather see a fundamental change in the way we fund education in Nebraska so that we might have permanent property tax relief.

Additional bills that address the property tax problem are still being considered by several committees.    As proposals are advanced to the full legislative body we will start exploring other options.

 

Weekly Newsletter to District 34

February 20th, 2015

The overriding issue expressed this session, and has been over the past several sessions, is that property taxes are too high.  And you can’t talk about property taxes without talking about state aid to education.  In order to demonstrate how these two subjects correlate with each other I will conclude my comments next week about school funding, property taxes and what has lead us to the point we are at today.

The primary sources of funding Nebraska’s schools has always been local property taxes.  Until 1965, the primary means of financing state government came from a general state property tax.  That’s when the Legislature created the first state income tax, which triggered an existing constitutional mechanism to automatically eliminate the state property tax.

In 1966 the business community convinced voters to repeal the state income tax.  The agricultural community countered with its own ballot measure to eliminate the state property tax, which passed.  That left the state without any real source of revenue.

As a compromise in 1967, the Legislature established a state income tax and a state sales tax as sources of revenue for Nebraska.  The Legislature intended to have the state cover 40 percent of the cost of K-12 education through the School Foundation and Equalization Act.  However, the most the state ever covered was 13 percent, despite several legislature efforts to correct the underfunding of the overall state aid formula.  So schools continued to rely on local property taxes for the bulk of their funding. Today the state only sends approximately 2% of income taxes back to local schools outside of the TEEOSA equalization funding.

By the 1988/89 school year, there were significant tax and spending disparities between school districts across the state.  School district property tax levies ranged from 75 cents to $3.25 per $100 of property valuation – with the highest rates in districts with low property wealth.  That meant the owner of property valued at $100,000 for tax purposes would have been paying anywhere from $750 to $3,250 a year in property taxes to the local school district, depending on the location of the property.

Even with the much higher tax levies in low-wealth districts, property tax disparities were so large – and state support did so little to address them – that the districts with the most property wealth had more than five times as much total funding per student as the lowest district.

The ongoing debate both inside and outside the Legislature over improving school district organization and financing prompted the Legislature to create a school review commission in 1988.  In its final report, the commission concluded that “the burden on property for school support is excessive by any standard of measurement, resulting in inequities to taxpayers and a narrow and unstable tax base for schools.”

In 1990, the Legislature passed a comprehensive education and revenue reform measure (LB 1059), known as the Tax Equity and Educational Opportunities Support Act, or TEEOSA for short.  The measure increased state support for school districts by attempting to shift a significant portion of K-12 funding from property taxes to state income and sales taxes.

LB 1059 set the basis for the present state aid formula and replaced the School Foundation and Equalization Act that had been in place since 1967.   The overall goal of LB 1059 was lowering property taxes.  The bill raised state sales and income tax rates to broaden the available financial support for public schools, attempting to lessen the reliance on local property taxes, and created the basic concept for the present state aid formula.

That concept (Needs minus Resources = Equalization Aid) is meant to provide enough state aid to a school district to help make up some of the difference between its needs and the local resources it can tap, such as taxable property.  This difference is called “equalization aid.”

TO BE CONTINUED NEXT WEEK….