Thank you, Chairman Hadley, and good afternoon fellow members of the Revenue Committee. I am Beau McCoy, for the record that is B-e-a-u- M-c-C-o-y and I represent the 39th district here in the Unicameral.
I am here before you this afternoon to introduce LB405 on behalf of the Governor.
Or, as we otherwise refer to it in our office, the Lobbyist Full Employment Act of 2013….
Now with all seriousness, I want to thank all of the Nebraskans here at the Capitol today along with all of those across our state watching the hearing on television and online.
Thanks to the many citizens who have contacted me by letter, email and phone and for those who have taken time out of their busy lives to participate.
Governor Heineman, Senator Ashford and myself asked for a serious and robust discussion on tax reform and today is the first public forum of the many conversations that have already begun.
Today marks the first time in nearly fifty years that our Legislature has taken up the issue of fundamental tax reform to simplify our tax system, make it more fair, and modernize it for our sons and daughters.
The last few weeks I’ve had a number of folks ask me why it’s been so long since we have had a conversation.
My answer is that in many ways it’s ironic that an issue as fundamental to our daily lives as taxes can also be so incredibly complex and difficult to address.
I came to the Legislature, as we all do, determined to make a difference and vowing not to shy away from the most important and substantive issues that affect the lives of Nebraskans.
The four most important reasons why I am enthusiastically engaged on the issue of tax reform sat across from my wife and I at breakfast this morning.
I want our four kids, and all children across Nebraska, to have more and better opportunities than we have had to live, start a business and raise a family in our state.
I want our retirees, like my parents, and retired veterans to stay in Nebraska and continue to contribute to our communities.
Can anyone tell me with a straight face that our current system of keeping our young people and retirees here in Nebraska is working as well as it could and should?
It is time to get serious about this, and this is an important part of the solution.
Tax and business rankings are important, but tax reform really is about the next generation of Nebraska’s leaders; our sons, daughters and grandchildren.
They’re only going to be the leaders of tomorrow if we have the great jobs and lower taxes to keep them here.
We are making significant progress in Nebraska, but we can, and we must do better. If better is possible, good is not enough.
There is a reason why Nebraska is “The Good Life.” We have the ability, opportunity and responsibility to create positive change and make Nebraska, “The Best Life.”
This tax reform discussion can help our state turn the corner and propel our economy well into the 21st century.
Today is about our future, it’s about our young people, our retirees and our hard-working families and small business owners and workers.
I have full faith and confidence in the citizens of our state. They care about our future, and they will engage in this statewide conversation about tax reform.
We need those speaking today to not only share what they may be for or against in the tax reform plan, but also to share suggestions to make our state more competitive and to thrive.
A problem clearly stated is often a problem already half solved.
If you oppose or have concerns about our plan to totally eliminate the individual and corporate income taxes by lifting the sales tax exemptions on $2.4 billion, what list of exemptions would you use?
What does fundamental tax reform look like to you?
I’ve said many times the list we’re using isn’t graven in stone, it’s not the Ten Exemptions.
We will be listening intently this afternoon and we respect and value the varying opinions that will be outlined here today.
But we need to insure the 1.8 million hard working Nebraskans that deserve tax reform are not forgotten.
Let me address a couple of important points regarding what we are discussing today.
LB405 today and LB406 that will be discussed tomorrow represent a one-of-a-kind approach to tax reform that is unique to Nebraska and fundamentally different from the plans being discussed currently in a number of state capitals around America.
I want to be clear, we are not proposing to raise the sales tax rate, and we are not proposing to place sales tax on services.
The fact is that the data specific to Nebraska proves that the sales tax in our state has been a more stable source of revenue than the income tax.
If you look at the graph on the handout distributed to you earlier titled “Growth of General Fund Revenue by Sources” you will see that the blue line representing sales tax has fewer dips and valleys than the red line representing income tax.
The second chart on the reverse side of the handout shows the actual revenue numbers from FY 2002-2003 to FY 2011-2012.
Please direct your attention to FY 2008-2009 when the individual income tax swing was negative by 17.6%, the sales and use tax swing was only negative by 6%.
To determine where we want our state to be revenue wise and economically in the future requires us to closely examine what our state revenue picture looks like now.
Agriculture and manufacturing are huge components of our economy and I know this discussion isn’t easy or maybe even welcome for these industries.
I have a unique perspective on how vital agriculture is to our state as a senator that represents the western suburbs of Omaha and also the small communities and rural areas of Douglas County.
I’m a small business owner in the construction field now, but I was born and raised as a fourth generation ranch kid on our family’s cattle ranch near the Nebraska/Colorado border.
I grew up in the same sod house in which my great-grandparents raised their eight children.
Fixing fence, putting up hay and calving heifers were part of my daily life just like they are today for many Nebraskans.
They say you can take the country boy out of the country, but you can never take the country out of the boy.
It’s true. Agriculture is in my blood, it’s part of who I am.
My family came to America like many of yours, driven to make a better life through hard work and limitless opportunities.
Growing up in agriculture, I learned a good work ethic and the value of working hard until the job is done.
When I was sixteen, I didn’t buy a car, I bought a tractor. I did this so that my brothers and I could start our own haying business and put ourselves through college.
Farming and ranching are not just industries in our state, they are a proud way of life and the bedrock of Nebraska.
We should do everything we can to protect and promote agriculture and manufacturing through this tax reform discussion, and we will.
It is vital that agriculture and manufacturing are at the table as we continue these discussions.
Our citizens are not afraid of tackling tough issues.
We’ve weathered a great number of challenges in our state’s history because we have smart people who will keep working to make Nebraska even better.
Recently, we have faced a few issues in the Legislature when a solution seemed impossible, but people stayed at the table and didn’t give up until the job was done.
I’m ready to roll up my sleeves and work together with you, my fellow committee members, our colleagues and citizens across Nebraska to better our state.
Thank you for your time and attention, Chairman Hadley, and I would be happy to entertain any questions.