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A number of voters in District 38 have inquired about the various exemptions and credits that exist within the property tax system. There are certain classes of taxpayer status that are exempt from taxes, as well as certain types of real property and tangible personal property that is exempt from property taxes. The Property Tax Credit Fund was begun in 2007 to provide direct property tax relief to taxpayers.
One of the most significant exemptions is the Homestead Exemption. Eligible homeowners have a portion of their “homestead” exempt from property taxes based on their income and value of their home relative to the county average. Homeowners can apply for the Homestead Exemption if they are 65 years or older, have a developmental or certain permanent physical disability, or are qualifying veterans. Unlike exemptions based on taxpayer status which simply remove that class of property from the revenue of a political subdivision, the revenue not paid by eligible homeowners who receive the Homestead Exemption is compensated from the state General Fund to the local government. In the 2015-2017 budget $144 million of revenue to local political subdivisions will be reimbursed.
Other exemptions include the increased value of real property due to planting of trees along a highway and of preserving historically significant property. Property owned by state or local governments, agricultural and horticultural societies, educational organizations, religious groups, charitable organizations, and cemeteries is exempt from tax. Those lost revenues are not reimbursed by the state. Non-depreciable tangible personal property, household and personal items, business inventory, livestock, wind generation personal property, and certain data center parts are also exempt from property tax.
The use of Tax Increment Financing, known as TIF, is also a frequently asked question regarding property tax policy. TIF allows cities to issue bonds to cover public costs for private development of residential or commercial projects in areas determined to be “blighted”. The increased value of the redeveloped property generates higher property tax revenue, which in theory is used to pay the costs of the bonds. The statutes regulating the TIF program have evolved significantly since the original adoption of the law authorizing TIF in 1979. The number and cost of TIF projects have risen dramatically over the past decade, from 393 projects costing $25 million in 2004 to 655 projects totaling $55 million in 2014. TIF projects are locally initiated and managed, and the costs and benefits are borne locally. The use of TIF has allowed many communities to promote significant local redevelopment and community improvement. Accusations of inappropriate use of the program have also been made. I encourage taxpayers to engage in local community discussions about TIF projects to understand the benefits as well as the costs of specific projects, as projects vary greatly within and between communities.
The Property Tax Credit Fund uses state General Funds generated primarily from income and sales tax to provide a direct credit to property owners. Each taxpayer receives a credit based on the valuation of their property. In the coming year, $204 million of General Funds will be paid to political subdivisions to cover the credit. That will amount to over $90 of credit for every $100,000 of property value, or about a 5.5% of the typical property tax bill in tax year 2015. The existence and continued growth of the Property Tax Credit Fund is recognition of the imbalance in Nebraska’s tax system.
I have appreciated all of the great questions, conversation, and engagement of constituents regarding property taxes, and look forward to continuing the discussion. Please do not hesitate to contact my office by email at email@example.com or 402-471-2732. For daily updates, please follow me on Twitter @JohnKuehnDVM.
Senator John Kuehn, District 38
The policy challenges regarding reforming Nebraska’s Property Tax system can be broken down into two areas. The first is what functions of government we fund with locally paid property taxes as opposed state general funds. The second is how we equitably distribute the burden of who pays property taxes to support those functions of government.
The first area of consideration is what property taxes pay for. There are many schools of thought regarding “fair” tax policy. This leads to a discussion about the balance of funding government operation through a combination of property taxes, sales taxes, and income taxes. Currently, property taxes make up 39% of total taxes paid, compared to a total of 44% from sales and individual income taxes combined. Changing that distribution to reduce taxes collected on property would require sales and income taxes increases to cover the costs of functions currently funded by property taxes, functions of government that are currently funded by sales and income taxes to be scaled back or eliminated, or a combination of the two. Any reduction in total property taxes collected would most likely have an impact on the state General Fund.
At the center of the local versus state debate in rural areas is the issue of funding K-12 education, which makes up 60% of the average property tax bill. Current statute gives significant control of per student spending to local boards. In the 2013-2014 school year the average cost per pupil across the state was approximately $11,300. By comparison, the average cost for the school districts in Legislative District 38 was about $3,000 per student higher, with a wide range from $10,600 to $19,600. The percentage of that cost funded by local property taxes versus state general funds is determined by a rather complex formula that takes into account the local property tax base, reflecting the local ability to pay, and the needs of the district to perform the functions required by statute. School districts receive equalization aid from the state to make up the difference between the two.
As the value of agricultural land has increased in the past decade, the amount of state equalization aid from the general fund to rural districts has decreased dramatically. For the 2015-2016 school year, less than one quarter of the districts in the state will receive any of the $860 million in state equalization aid. For rural districts, that represents a dramatic shift in the burden of funding education to locally generated property tax dollars. Complicating the discussion is the fact the while only a minority of districts receive state equalization aid, the districts that do receive those general fund dollars educate over 80% of the roughly 300,000 students in Nebraska’s public schools. Re-evaluating the equalization process and increasing the amount of foundation aid each school district receives per pupil is a major step in rebalancing the funding of K-12 education between property taxes and general funds.
Furthermore, the expense incurred by counties and cities that are required by state statute or regulation must also be addressed. State general fund support for cities and counties has decreased significantly over the past decade, while operational requirements have increased. A careful examination of the regulatory burden imposed by state agencies and unfunded mandates in statute is underway. Dramatic increases in the tax revenue by community colleges and natural resource districts also stand out as areas of concern. At the core of these policies is the principle of local control of government. Local political subdivisions have the authority to collect property taxes in response to local needs. Granting budget authority to the state using state general funds gives greater authority to the state. If local control is a priority of taxpayers they must engage with their local boards and understand their spending to preserve local control.
The second area of policy concern is how the property tax burden is distributed among taxpayers and classes of property. In rural Nebraska, the inequity that has been created due to the rapid increase of agricultural land values compared to other classifications of property is at the heart of this discussion. One aspect of tax policy is to look at how “regressive” a tax is, or what proportion of an individual’s income is spent on the tax. For example, sales taxes have the potential to be highly regressive when charged against essential items such as food. A family earning $50,000 annually that spends $600 per month on food would pay a greater percentage of their income on sales tax of food compared to a higher income family earning at $100,000 annual income with the same food budget. Thus, exemptions for sales tax on grocery items are a policy decision to moderate the regressive potential of the sales tax. Conversely, income tax rates that increase as income increases is a “progressive” tax policy.
Since property taxes in Nebraska are based on the value of property, not on income, property taxes can be highly regressive in some instances, such as the tax burden passed through rent charged by property owners to tenants. On the other hand, it is assumed that owners of more expensive homes have higher incomes, so the tax would be more proportional to income. In the case of agricultural land and the improvements involved in agricultural production such as grain facilities, high taxes with decreased earning potential due to low commodity prices are highly regressive, meaning a greater proportion of total income is spent on taxes.
Policy changes to how property is assessed must go hand in hand with redistributing costs between local and state resources to be effective. If the total revenue needs remain the same in rural areas, decreasing valuations alone will likely result in levy increases to generate the revenue required. Most rural states employ a use-value assessment for agricultural land, as opposed to a market value assessment. Additionally, the period of time used to average valuations in many states is longer, which has a leveling effect on the tax burden in the face of volatile commodity markets. Any changes to the valuation process will affect all property taxpayers in varying ways. Carefully analyzing what those impacts will be and helping all taxpayers understand the implications is essential before statutory changes are made to avoid unintended consequences.
Finally, the nature of exemptions for specific classes and types of property from property taxes is also a policy consideration. While exemptions are important to promote certain industries or social priorities, they do shift the burden for funding local political subdivisions on the property owners who are not fortunate enough to receive an exemption. Expanding the tax base reduces the overall burden on all property owners. Accurate data about the economic impact of exemptions is needed to help inform policy decisions regarding their effectiveness and overall effect on local communities.
Nebraska’s property tax system has evolved over a period of decades, as have the economic conditions that have presented the current challenges. Reforming the system is neither a simple nor quick process. Ultimately, the participation of all taxpayers in the establishment of funding priorities and revenue decisions at the local level is critical to a sustainable and equitable property tax system. If you have any questions regarding property tax levies or any other issue across the state, please do not hesitate to contact my office by email at firstname.lastname@example.org or 402-471-2732. For daily updates, please follow me on Twitter @JohnKuehnDVM.
Senator John Kuehn, District 38
While the valuation of property subject to taxation by a political subdivision is dictated by market conditions and subject to the Uniformity Clause of the Nebraska Constitution, the amount of tax collected per $100 of valuation, called the tax levy, is set by each political subdivision annually. An examination of your property tax statement lists which political subdivisions you are paying taxes to and the levy rate. Expressed as a decimal figure, the rate is calculated as a percentage of total valuation collected in taxes.
To illustrate, you own a home with an assessed value of $100,000. The levy for your public school is .95, your community college is .1125, and your natural resources district is .045. Annually, you would pay taxes of $950 to your school district, $112.50 to your community college, and $45 to your NRD. If you own an 80 acre parcel of farmground with a market value of $5,000/acre your valuation for taxation purposes would be 75% of market value, or a total of $300,000. The same rates would apply. Tax levies are also subject to the Uniformity Clause in the sense that the rate must be uniform throughout the political subdivision, regardless of class of property.
The tax levy is under the sole authority of the political subdivision that charges the tax. The board of a political subdivision will establish its budget for the year, reflecting the revenue it must collect from property taxes. Using the total value of taxable property from the assessment and equalization process, the local board sets the levy to match revenue to their budget. The levy can be kept the same, lowered, or raised. A common statement is that a subdivision is “levy neutral”, meaning they have not changed their tax levy from year to year. That does not mean they are collecting and spending the same amount of taxes.
The only control of tax levies at the state level is in the form of limits. Established in state statute, levy caps set a maximum rate a political subdivision can charge. School districts have a levy limit of 1.05, the highest of all political subdivisions. Counties and cities are limited total levy of 0.45, with an additional 0.05 for joint agreements and the option to designate a portion to other agencies within the county or city, such as county fair boards, hospital districts, fire districts. Natural resources districts are authorized to levy up to $0.045, community colleges having a levy limit of $0.1125, and educational service units have a limit of $0.015.
Any political subdivision can exceed the statutory levy limit if approved by a public vote of the people in the subdivision. Public bonds can be issued by most political subdivisions, subject to a vote of the taxpayers. Property taxes collected to repay bonds are outside of the levy limit. Additionally, some NRDs levy additional taxes to meet compliance with the Nebraska Ground Water Management and Protection Act.
Budgetary management and local authority to set property tax levies is a reflection of the value among Nebraska voters of local control. Locally elected officials with the best knowledge of the needs and challenges of a community control the cost to educate a child, maintain local services, manage ground water, and provide vocational education. Local voters have a direct say in whether to issue bonds for school construction, city infrastructure upgrades, or hospital expansion. Local voters determine what the spending priorities are within each local community. As taxpayers and voters, every Nebraskan has an ability to influence the amount they pay in property taxes by engaging in the budget process with their local governments. I encourage citizens to do so.
There are several policy issues at the state level which can address the fundamental process of the property tax system. Next week I will address the state policy issues and the impact they may have on local control, alternatives to revenue sources based on property, and the state budget.
Your voice is important in these conversations. Examine your property tax statements, understand the needs of local spending, and talk to your local officials about the challenges they face. If you have any questions regarding property tax levies or any other issue across the state, please do not hesitate to contact my office by email at email@example.com or 402-471-2732. For daily updates, please follow me on Twitter @JohnKuehnDVM.
Senator John Kuehn, District 38
Property taxes paid on a specific piece of real estate or on tangible personal property is the product of the valuation of the property, determined by the county assessor, multiplied by the tax levy, the rate set by the board of the political subdivision collecting the tax. This week I will discuss the process of valuation of property and its role in your property tax bill.
The responsibility for maintaining the roll of all taxable property and its value lies with the County Assessor, a publicly elected county official. The office of the assessor establishes the list of all taxable property and its owners, as well as the taxes due. The Assessor must establish the “valuation” of the property for tax purposes. In Nebraska, real estate is valued at the market value of the property. Therefore, if the market demand, and therefore prices, of a particular class of property is increased in an area, the valuation also increases. If local housing demand is high for the number of available houses, the actual sales of homes in your area will reflect a higher value of your home. Conversely, if the ag land market stagnates, the lower prices per acre will mean your farmland has a lower value at sale and the valuation will decrease accordingly.
The valuation for property tax purposes is based on the average actual value over the past three years. This rolling average is to prevent large, sudden changes in valuation based on a singular economic event. It does, however, mean that if property values rise rapidly for two years and then plateau, the assessed valuation will continue to rise during the third, fourth, and fifth years until the previous increases are removed from the average. On the other hand, a sudden drop in market value will not be immediately reflected as well. Valuations for tax purposes will rise and fall at a lower rate and over a longer period of time than the changes in actual market conditions.
Determining the value of a piece of property for taxation is subject to the “Uniformity Clause” of the Nebraska Constitution. Certain property can be classified differently for the purposes of determining its value and based on characteristics of that property. Most notable different classifications in property for taxation are agricultural and horticultural land, personal real estate, tangible personal property, and livestock. Under the Uniformity Clause, once actual market value has been determined for a piece of property, the County Board of Equalization ensures the values assessed are uniform for the type and nature of property within a county. The County Board of Equalization is composed of publicly elected members of the County Board of Supervisors. They correct any assessment on a piece of property that is undervalued or overvalued compared to other similar property based on the current market conditions in their county. Property owners who feel their valuations are not consistent with the local market or with comparable property can protest their valuation.
Constitutional amendments passed by Nebraska voters in 1972, 1984, and again in 1990 created a special distinction for agricultural and horticultural land for the purposes of taxation. Agricultural and Horticultural land is assessed at 75% of the actual value and must comply with the Uniformity Clause with other subclasses of ag land, but not with other types of real property. It is important to note that distinction only applies to the land used for production. Homes and improvements are valued at 100% of their actual value whether located rurally or in a town.
Increasing value of property is not in and of itself negative. In fact, increased value of property means greater net worth and owned assets for property owners. If you wish to sell your land, home, or business, rising property values mean your sale proceeds are increased. Many taxpayers see increased valuations and assume an automatic increase of their property tax bill. Without adjustments to the levy rate, that correlation is true. It does not have to be. The levy rate as set by the local board determines the ultimate effect of the value of your property on the amount of taxes you pay.
Next week I will discuss the levy rate, levy restrictions, and the impact on your property taxes. As always, I look forward to hearing your ideas and concerns on the many issues facing the Legislature during the interim and in coming years, particularly regarding property tax reform. Please do not hesitate to contact my office by calling 402-471-2732 or sending an e-mail to firstname.lastname@example.org. For daily updates, please follow me on Twitter @JohnKuehnDVM.
Senator John Kuehn, District 38
Property taxes have been a significant topic during my conversations with constituents. As the primary revenue raising tool for local political subdivisions, property taxes accounted for $3.565 billion in revenue in 2014, roughly 39% of all state and local taxes. Property taxes to fund government were authorized by the Territorial Legislature before Nebraska was even a state, and Nebraska’s property tax policies have evolved over 150 years into a fairly complex system of moving parts, levies, and exemptions.
This column is the first in a series of four to help taxpayers in District 38 understand what property taxes fund, how valuations are determined for property, the principles of the levy rate, and the policy issues that are at the root of so many conversations among taxpayers.
In 1966 a constitutional amendment was adopted by Nebraska voters to eliminate the use of property taxes by the state. Since that time, property taxes have been exclusively levied by political subdivisions, commonly referred to as “local government”. Nebraska statute has authorized over 30 different kinds of political subdivisions, most of which are funded, at least in part, by property taxes. The taxing rate, known as the levy, is set by the locally elected boards that govern each political subdivision. Most subdivisions have a cap or limit on the maximum levy they can charge defined in state statute.
A quick look at your property tax statement will list which political subdivisions are collecting a tax, the levy rate, and the amount of tax collected on your property for that entity. School districts collect the largest component of property taxes, around 60% of the total. On average across the state, counties and cities/villages make up roughly 17% and 10% respectively, with community colleges, natural resource districts, and educational service units comprising the majority of the remaining tax collected. Depending on your locale, the proportion of your property tax bill funding different subdivisions may vary significantly. You may have property in a fire district or sanitary improvement district that also collects taxes. I encourage taxpayers to carefully examine their property tax statement and understand which entities are taxing them and how much. Because property taxes are levied and spent locally, local and regional circumstances change the proportional distribution of your total property tax bill.
The current discussion over the property tax system in Nebraska is the result of the culmination of a number of developing trends over the past decade. Property taxes collected is a product of the valuation of the property multiplied by the tax rate, or levy. If valuations increase, the levy rate can be decreased to collect the same amount of taxes. If the levy rate remains the same or is increased as valuations increase, the total taxes collected will increase as well. Statewide property valuation from the period of 2003-2013 increased by approximately 77%. During that time period, total property taxes levied increased approximately 67%, indicating a large increase in local taxes collected. Taxes levied by community colleges have skyrocketed by 124%, while taxes collected by natural resources districts have doubled in a decade, an increase of 101%. In both cases, total taxes levied significantly outpaced even the dramatic increases in valuation over the past decade.
Moreover, agricultural land values have risen rapidly in the last decade, resulting in a 162% increase in property taxes on farmers and ranchers. Nebraska ag land owners pay the third highest property taxes in a ranking of all 50 states. During that same time period, valuation of residential and commercial real estate has increased at a much lower rate than ag land. For many rural Nebraskans, this has created a significant imbalance in the distribution of the property tax burden among property owners.
Some political subdivisions also receive public funding from other sources of tax revenue, including state general funds from sales and income taxes. Some municipalities have local sales taxes. The funding mix for local governments has historically been a reflection of the view of local control of these political subdivisions, including their budgets, as opposed to state appropriations for locally determined needs. Funding for K-12 education, the single largest component of property tax revenue, is also a complex mix of local resources via property and needs specific to a local district. In theory, the differences among districts between resources and needs is equalized through equalization aid. However, over half of the school districts in the state, located in rural Nebraska, do not qualify for state equalization dollars, shifting almost the entire funding burden to local taxpayers.
Next week I will address the process of property valuation and its impact on property taxes. As always, I look forward to hearing your ideas and concerns on the many issues facing the Legislature during the interim and in coming years, particularly regarding property tax reform. Please do not hesitate to contact my office by calling 402-471-2732 or sending an e-mail to email@example.com. For daily updates, please follow me on Twitter @JohnKuehnDVM.
Senator John Kuehn, District 38
This past week the Nebraska Unicameral adjourned on Legislative Day 89, bringing the first session of the 104th Legislature to a close. Characterized as a session dealing with complex and controversial issues, my first session representing District 38 was eventful.
This session demonstrated the importance of civic engagement by constituents. A number of the issues that faced the Legislature this year were politically charged and accompanied by strong, emotional positions on both sides. The policy decisions were often complex and in some cases quite technical. As I received calls, emails, and letters from many constituents, I appreciate those of you willing to provide your thoughts and opinions in a civilized and cordial manner. The in-person conversations I had every weekend while I was back home during session with so many constituents were valuable to my deliberations on the issues.
Political rhetoric by some has accused the members of this Legislature of being “out of touch” with Nebraskans. I take umbrage with that assertion. By virtue of my age, I will spend more years of my working life in District 38 after my service in the Legislature than the prior 15 years since my graduation from veterinary college. Every vote I cast I am acutely aware that I am shaping the policies, economy, and community that will influence my own life in rural Kearney County well into the future. To illustrate, when studying the gas tax, I balanced the fact my home is 12 miles from the nearest grocery store–I have to drive considerable distance for basic necessities–with the reality that my ability to get my livestock and farm products to market is dependent upon a rural transportation infrastructure maintained by counties. It was through extensive discussion with voters in all seven counties in District 38 that I decided supporting the bill was in the best long term interest of rural Nebraska. I am as impacted by the policy as each resident. This is my home and my future, as well. I approached each issue with that perspective.
With the close of the session, I am anxious to get caught up with work on my cattle operation and teaching summer classes. Although the Legislature is not in session, work continues. Many civic and community organizations throughout District 38 have extended invitations, and I will be meeting with a number of constituent groups during the Interim. In late June, my staff and I will be engaged in a tour of the Republican River basin sponsored by the Nebraska Water Center to get the most recent perspective on local issues with water policy in the region. In July, I will attend the Council of State Governments Midwest Legislative Conference in Bismark, North Dakota. In addition to collaborating with colleagues from around the midwest region, I will also travel to the Bakken Oil Fields for an inside look at the opportunities and challenges presented by the rapidly expanding energy industry. I was also selected to participate in the Bowhay Institute for Legislative Leadership Development (BILLD) in Madison, Wisconsin during August. I am honored for the opportunity to attend BILLD and receive additional training to best serve my constituents.
Each session Senators are able to submit proposals for interim studies. These studies can range in topic and focus with the goal of each to provide background and data to inform future policy decisions. Studies are referred to the committee of purview by topic. I introduced a study to examine mechanisms for sustainable and adequate funding to local public health departments to ensure the departments are able to meet their core responsibilities and functions as set forth in current statute. Two Rivers and South Heartland Health Departments serve District 38, and are the vital front line in our public health system. Together with my colleagues from the Appropriations Committee, we will delve into public health operations and attempt to craft a strategic plan for sustainable state investment. The Appropriations Committee will also be conducting studies on the UNL Innovation Campus and several other budget issues.
It has been an honor to represent District 38 this past year. Although the legislature is not in session, my work as your state senator continues. I strongly encourage you to join me at an event in your community to discuss the issues that are important to you. For more details on my visits or if you can not make it to join me at an event in person, please do not hesitate to contact my office at 402-471-2732 or firstname.lastname@example.org.
Senator John Kuehn, District 38
As the 104th Legislature enters the last weeks of the session, some of the most contentious issues facing the body still remain to be debated. Perhaps the most controversial is LB 268, introduced by Senator Ernie Chambers, which would repeal the death penalty. The bill passed first round debate on General File. Anytime an issue relates to an individual’s life, it is a difficult and emotional topic to discuss. I have heard from a number of constituents and I have taken the opinions of both sides into account during my deliberation. It has only come after a great deal of thought, research, prayer, and reflection that I have made my decision to not support LB 268.
It is an unfortunate reality that there individuals in society capable of committing crimes so heinous and inherently violent that strict penalties are demanded – up to and including life sentences or even death. Direct communication from voters in District 38 has concurred with this principle.
At this time, 11 individuals are on death row in Nebraska. During the first round of debate on LB 268, I had the opportunity to hear the stories of these 11 individuals and the graphic details of the brutal crimes they committed. With regard to the 11 currently sentenced, their guilt is not in question. Neither is the exceptionally violent and heinous nature of their crimes. Unlike other states, Nebraska has been prudent and careful in its application of the death penalty. Our state process has not been subject to erroneous execution.
My first priority is to protect the public safety of constituents in District 38. While various reports have examined the deterrent effect of the death penalty, several resonate with me. In 2009, researchers found a 20% reduction in child murder in states that made the crime eligible for the death penalty. The punishment did not have to be carried out, merely having the penalty on the books reduced child homicide.
I do not disagree with the fiscal argument in favor of repeal of the death penalty. However, the expense incurred to protect innocent lives does not have a price. If having the death penalty accounts for just one less murder in Nebraska, I accept the cost. Although the state of Nebraska does not currently have a legal means of execution, the deterrent effect remains.
In addition, I have heard from a number of county prosecutors from across District 38 who have voiced legitimate concerns about LB 268. Capital punishment serves as a critical tool in the present-day judicial system. The presence of a death penalty affords prosecutors flexibility in dealing with offenders and power to ensure just punishments.
Governor Ricketts has already expressed strong opposition to any potential death penalty repeal. Given that, if LB 268 were to advance, it would need 30 votes to overcome a gubernatorial veto. Every vote on this bill will matter, and it promises to be a difficult decision for each Senator. Regardless of your position of agreement or disagreement, the issue is not taken lightly. Your input is valued on this polarizing debate. In the final weeks we will also be debating a number of social and fiscal issues of importance to Nebraskans. I encourage you to contact my office at 402-471-2732 or by email at email@example.com. For daily updates, please follow me on Twitter at @JohnKuehnDVM.
Senator John Kuehn, District 38
After extensive deliberation among members of the Judiciary Committee, the debate over the legalization of medical marijuana has reached the floor of the legislature with the advancement of LB 643. Advancing with a significant committee amendment, the “Medical Cannabis Act” would permit the regulated prescription of medical marijuana under oversight from the Department of Health and Human Services and medical experts from across the state. The bill creates a registry of users to track those issued prescriptions.
Proponents of the act assert that marijuana and compounds contained in marijuana, called “cannabinoids” offer better potential for treatment of some medical conditions than those products and treatments currently approved by the Federal Food and Drug Administration. Some of these conditions include chronic pain, glaucoma, Tourette’s syndrome, epilepsy, and Crohn’s disease.
As a scientist and clinician, I have many technical and ethical concerns about the claims made about the use of medicinal marijuana. Controlled studies that demonstrate the efficacy of cannabinoids are minimal and results are ambiguous. Anecdotal evidence in specific cases have shown promise, but conclusive evidence supporting these anecdotal claims is lacking. One thing that is conclusive, however, is the dangerous and life-long physiologic effects cannabis use has on developing brains.
Many of the advocates for medical marijuana use children with uncontrolled seizures and the elderly in chronic pain as the greatest beneficiaries of legalization. In the absence of conclusive evidence of its efficacy and safety, we are utilizing these vulnerable populations as test subjects to build that data set. Simply put, this is not an approach I can support.
Diversion of marijuana prescribed for medical use to recreational users, especially young adults, is a major concern for me. The magnitude of the problem of diversion of controlled substances in our rural communities should not be underestimated. Opioid painkillers and ADHD drugs are routinely diverted from the individuals to whom they are prescribed, either intentionally or via theft, and abused by others. To claim it will not be an issue with medical marijuana is to ignore the reality of the problem we are facing with existing controlled substances.
I am not insensitive to the needs of those who have not found relief from currently available therapies. I am a strong proponent of biomedical research, access to clinical trials, and reducing barriers to accessing medical care. However, in the absence of definitive evidence to demonstrate its safety and efficacy, the known disadvantages of legalizing marijuana for medicinal use are too great for me to support LB 643.
Medical marijuana is a contentious issue across the country and I welcome your opinions or concerns regarding its potential legalization. To contact my office, please call 402-471-2732 or email at firstname.lastname@example.org. For daily updates, please follow me on Twitter at @JohnKuehnDVM.
Senator John Kuehn, District 38
Tuesday, April 28 marks the 70th legislative day of the 104th Legislature, first session. On that day, the state budget for the upcoming biennium will be introduced to the Legislature. Covering state operations and spending for the period of the next two fiscal years, the budget proposed by the Appropriations Committee will amount to $8.7 billion. General Fund spending, which is obtained from sales and income tax revenue, will compose approximately $4.3 billion of the total budget. The remaining $4 billion is spending from Federal and Cash funds.
As a member of the Appropriations Committee, I have been actively involved in the development of the budget that will be presented to the full legislature. I am very proud of the work that has been done by the committee to develop and propose a budget that meets the obligations of government while being responsible stewards of your tax dollars. The budget, as proposed, represents a two year average growth rate of 3.1%. This is the third lowest budget growth rate in the past 30 years. Included in that growth rate is an additional $120 million of Property Tax Credit over the biennium, increasing the property tax credit paid to taxpayers by over 40%.
Developing a state budget is no simple task. The Appropriations Committee represents the diverse interests of the state, with 3 members of each Congressional District represented on the committee. I have been impressed by the manner in which the 9 members of the committee have worked together to prioritize interests of the entire state and the deliberate manner in which every budget item is given consideration. Balancing the requests of all state agencies, the budget proposed by the office of the governor, and the concerns of constituents with finite revenues is a demanding process. Setting priorities for spending between state services and strategic economic investment encompasses meeting both the needs of the “now” as well as thinking forward toward the needs of future Nebraskans.
I am proud of the budget that will be brought to the floor for debate. It is responsible, strategic, and reflective of the values of Nebraska taxpayers. I am particularly proud of language in the proposed budget that will increase transparency of state spending by agencies within each fiscal year. We cannot manage what we do not measure, and having accurate financial status at the close of each fiscal year is a significant step forward in conserving your tax dollars. In addition to a significant increase in Property Tax Credit, the tax dollars appropriated demonstrate the state’s commitment to K-12 education. At a time when many states are cutting support for higher education, the proposed budget has important investments in Nebraska’s public universities, state colleges, and community colleges.
Debate on the budget bills will begin on Thursday, April 30. On that day the Nebraska Economic Forecast Advisory Board (NEFAB) will also meet to review the economic forecasts for the state in the coming fiscal years. The NEFAB develops the revenue projection based on the economic forecasts they review and analyze. The budget was developed using the latest forecast projections from the February meeting of the board. Any changes in the revenue forecast by the board could have significant effects on the budget. While Nebraska has a 33 year historical average revenue growth of 5%, any slowing of that growth would require revision of the budget.
I encourage you to engage in the unfolding budget discussion over the coming weeks. As always, I appreciate your input on the budget and any issue before the Legislature. To contact my office, please call 402-471-2732 or email at email@example.com. For daily updates, please follow me on Twitter at @JohnKuehnDVM.
Senator John Kuehn, District 38
Last November Nebraska voters approved an increase to the state minimum wage from $7.25 to $8 in 2015 and another jump to $9 in 2016. Initiative 425 was successful on a platform outlining the need for a living wage for those hardworking single parents struggling to make ends meet. I do not disagree with this sentiment, and I believe every citizen should have access to the means by which to support themselves with reasonable pay for their work.
However, when many considered the wage increase, they did not factor in a vital group negatively affected by the minimum wage: young people. States with minimum wage levels greater than $8 per hour have higher youth unemployment rates and lower workforce participation among young workers when compared to states with lower minimum wage. Teens initially entering the workforce under the age of 18 are subject to safety regulations restricting the tasks they can perform. Additionally, student workers in particular have complicated school and activity schedules, and they often require additional training and oversight in their “first jobs”. Simply put, they require more time and management resources from employers than more experienced workers.
First jobs make a significant difference on the earning potential of young adults who are saving for college, contributing to their families, and active in their communities. A study published in 2014 showed that high school seniors who worked 20 hours per week had annual earnings 20% higher 6 to 9 years after graduation. That critical early earnings period post-high school can be the difference between financial independence or being strapped with debt for many young adults and families throughout their working lives. Given what is at stake for our youth, I am committed to helping incentivize employment opportunities for them.
Throughout District 38 small town business owners have been clear to me about the impact the increased minimum wage would have on their ability to provide jobs for high school students. For that reason, I used my priority designation for this session to guarantee floor debate on LB 599. Introduced by Senator Laura Ebke of Crete, LB 599 seeks to create a separate wage for Young Student Workers. Those under the age of 18 and enrolled in a public, private, or home high school program will be eligible to receive a minimum wage of $8 effective January 1, 2016. In addition, provisions in this bill restrict the decreased minimum wage to just 25% of payroll to avoid employer abuse. Students with dependents or enrolled in a vocational program are not eligible for the wage.
LB 599 does not force high school workers to be paid less. It does not allow employers to create a business model hiring only young, lower paid workers. It does not apply to college or vocational students. It does create incentives for business owners to take a risk and invest in critical first jobs for high school students. It does help provide support for our small town businesses and students who are disproportionately hurt by the increased minimum wage.
This past week, LB 599 advanced through the first of three rounds of floor debate with almost 2/3rds of the Legislature’s support. My colleagues and I recognize our responsibility to provide and maintain vital opportunities for our next generation. This bill is important to our communities, small businesses, and our future workforce.
Good public policy recognizes that sweeping generalized regulations can have negative impacts on specific groups and seeks to correct those injustices. That is the goal of LB 599: to correct a negative situation for youth workers in our state that Nebraska voters would never intend to create. The difference between $9 per hour and $8 per hour pales in comparison to the difference between $8 per hour and $0 income. That is the impact we are talking about.
As always, I appreciate your input on LB 599 and any issue before the Legislature. To contact my office, please call 402-471-2732 or email at firstname.lastname@example.org. For daily updates, please follow me on Twitter at @JohnKuehnDVM.
Senator John Kuehn, District 38
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