The State budget, with a .6% increase, reflects our State’s present financial situation. It’s been my experience that in private or government endeavors, when times are good we too often allow spending excesses and waste to remain in budgets. An economic downturn is the opportune time to examine costs associated with government programs.
-Public school spending will get a 2.3% increase and special education, 1%. As Education Committee Chairman, we protected the small amount of state aid funding that rural schools receive through the Income tax rebate portion of the state aid formula (TEEOSA). North Platte Public Schools fare better than most of the equalized districts; enrollment decreases have more to do with NPPS’s overall funding reduction than budget cuts. It has been disheartening to see that many larger school districts have used some of their increase in funding to give lucrative administrative pay raises instead of focusing on maintaining the quality of programs; senators have taken note of that occurrence.
-Public Welfare programs: Medicaid has had an average annual increase of 5.7% over the last 20 years. It will decrease by .8% this budget cycle. Child Welfare, historical 6.9% increase, 1.8% budget increase; Developmental disability aid, historical 7.5 % increase, budget cut of .9%; and Behavioral Health, historical 6.5 % increase, budget cut of 1.1%. The largest savings of $11 million will be from Health and Human Service’s plan to adopt the same policy that 44 other states already have, reimbursing hospitals at the lesser Medicaid rate in lieu of the higher Medicare payments for individuals who qualify for both. When historical data is taken into account the temporary 2 year budget cuts are reasonable.
-University of Nebraska (UN) and State Colleges: 2.6% historical annual increases, budget cut of .2%. Nebraska is third in the nation in per-capita tax dollar support of our higher education institutions; with that in mind, UN fared well this budget go-round.
-Correctional Services: 3% increase in its operating budget plus a transfer of $75.2 million from the cash reserves to address overcrowding and personnel shortages. With federal law suits looming, these expenditures are necessary.
Overall, I believe the budget is a reasonable response to the present shortfalls in revenues. The Governor and the Legislature worked in a manner that reflected a good interaction between the branches.
LB641 created the 10 member Nebraska Economic Development Task Force. The goal of Senator Watermeier, the sponsor, is to examine the effectiveness of existing programs and coordinate between committees any changes or creation of new programs. I agree with his premise that we show up in Lincoln every January with a multitude of proposed economic development ideas with no coordinated effort to refine the legislation into one cohesive bill. The task force seeks to have the input of seven committee chairmen. I sit on the panel as Education Chair.
This year, we introduced LB599: It would establish that development improvements on land of new infrastructures, redevelopment or new construction intended for business or housing purposes be considered business inventory until the property was occupied or sold. It is an attempt to alleviate burdensome property tax cost to developers who build speculative projects. The bill is still in committee and has the support of the Chamber of Commerce.
I bring this up to contrast my opposition to LB496, which would have added construction cost to Tax Increment Financing (TIF). Tax policy should be universal to all, it should not rely on arbitrary decisions by local elected officials as TIF is. Unlike LB496, LB599 would encourage development without damage to local property tax bases.
A local column writer recently inferred that if LB496 was enacted it would have helped reduce your property tax burden. The legislative proponents had the common sense not to make such a foolish claim. Taking normal housing growth off the tax rolls for 15 years will cause you to pay more in taxes. Someone has to support government operations and it will be you. Present TIF law at least attempts to divert those tax dollars to offset other public cost.
I stand proud of my efforts to defeat LB496 and will debate anyone on the why of it.