NEBRASKA LEGISLATURE
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Sen. Dan Hughes

Sen. Dan Hughes

District 44

With the summer already in full swing, the election campaigning has begun. In the past few weeks we have heard current Governor Pete Ricketts is planning to seek re-election, as well as, current US Senator Deb Fischer. Governor Ricketts has already been endorsed by the Nebraska Republican Party’s state central committee. Other candidates seeking political offices are: Charlie Jansen, who is the current State Auditor will be seeking re-election and Bob Evnen who is running for Secretary of State. At this time there is no declared candidate for treasurer of the State of Nebraska. In the legislature there are six senators that will be term limited out plus one senator who has indicated he will not be seeking re-election. This will again result in a significant number of new senators in the body.

Former Nebraska Speaker of the Legislature, Mike Flood has said he will not be running for governor in 2018. Mike Flood who is a republican from Norfolk made these comments after former Governor Dave Heineman told Lincoln’s KLIN radio that Flood would make a great governor. The former senator announced he would be running for governor in the 2014 election but withdrew the following month due to family health issues. Former Governor Heineman also expressed that he is disappointed that the property tax issue has yet to be solved over these past two years. Governor Heineman was in office for ten years and failed to solve the property tax problem. Part of the way the Heineman administration balanced the state’s budget was to cut state aid to schools and counties which caused local property taxes to increase in order to maintain services. It is very clear in Lincoln that former Governor Heineman is not very friendly to current Governor Ricketts or his administration.

This past week the LR 127 Committee had their first two tours to the Tecumseh State Correctional Institution and the Nebraska State Penitentiary. We had the opportunity to sit down with several members of the corrections state and representatives of inmate groups to discuss issues that they are facing.

These past few weeks I have spent some time traveling around the district. I first stopped in Alma and spoke at the open house/dedication of the Alma Municipal Airport Terminal Building. While I was in McCook I spoke with the Chamber for a town talk over breakfast and stopped by the Coffee with a Cop to speak with constituents. I then had the opportunity to meet with the County Commissioners from two different counties in my district; Red Willow and Furnas. If you would like me to speak at a town hall feel free to contact my office to arrange a time.

The interim is a good time for senators to look deeper into issues that need to be addressed. Next week a few of the legislative committees will begin to hold interim briefings. On Tuesday, June 27 the Health and Human Services Committee will hold two briefings, which are open to the public or you can watch them on NET livestream. The briefings held in the Health and Human Services Committee will be on rate methodology for dual-eligible and a quarterly briefing on Heritage Health. The majority of the other interim hearings will begin in late summer. I will try to keep you updated on hearings that may be of interest to the 44th legislative district.

I mentioned in my last article that I am a member of the LR 127 committee (Nebraska Justice System Special Investigative Committee) besides this committee a number of senators will be looking into issues which also affect our correctional system. LR 114 is an interim study to examine Nebraska’s statutes relating to geriatric or compassionate release laws for elderly inmates. LR 191 Interim study to examine possible legislative reforms to Nebraska’s mandatory minimum sentencing laws. LR 221 Interim study to examine possible reforms to Nebraska’s sentencing laws to accommodate an option of deferred judgment probation. Addressing the issues with corrections is not a simple process, there are a lot of different things that affect the system as a whole and we must not only identify the issues within the facilities but we need to find ways to reduce the recidivism rate and keep people from coming back.

In 2016 the legislature created the Transportation Innovation Act. Created through this act is the County Bridge Match Program, this program targets $40 million to replace or repair structurally deficient county bridges. This program provides financial assistance to counties for construction costs. The first year 68 bridges were selected and of those 6 are in the 44th legislative district. Safe and dependable roads are vital to rural communities.

By the time you are reading this the One Hundred Fifth Legislative Session will have concluded sini die. We completed our work early this year and adjourned on the eighty sixth day. Most of the last few days of the session were spent trying to finish up a few pieces of legislation that had taken a little more time to complete. Several of our final hours were spent on the budget and the efforts to sustain or override the Governors line item vetoes of the budget. I did not vote to override any of the Governors vetoes. I am very aware of everyone who is having to take less tax dollars than they thought they were going to have or are having to live with the same amount of tax dollars as last year. We have been inundated from any corner of the state about the possibility of fewer tax dollars available to spend on state services. But the fact of the matter is that we are facing a one billion dollar deficit and we are just going to have to get along with less. I am still not comfortable with our budget because I am very fearful that our projected revenues will not be met going through the rest of 2017. It is better to make some smaller cuts in spending now rather than having to make much larger cuts in the future. Of course the alternative for several of my colleagues is to raise taxes.

The line-item veto of funding the Medicaid budget does not mean that providers will receive across-the-board rate reductions. The Medicaid aid budget is a block appropriation based forecasted need and Medicaid has the responsibility to manage the program within its appropriation and minimize adverse access-to-service issues for Medicaid eligible individuals and family. An example given by the Department of Health and Human Services is “Medicaid has identified that Nebraska is an outlier in reimbursing certain hospital and professional services for Medicaid/Medicare dual eligible member services up to the Medicare rate. Capping payments at the Medicaid rate, as 44 states do, would achieve the general savings necessary to meet the requirements of the Governor’s veto.” The Department of Health and Human Services also stressed that this does not impact services not covered by Medicare like long-term care, nursing home care, and assisted-living care services. The Medicaid program will work with stakeholders to devise an appropriations reduction strategy that protects critical services like long-term care.

Last week the legislature debated the 2017-2019 state budget bills and gave the final approval on May 9. LB 331 was one of the last three components of the state’s two-year budget, which would create/make funds transfer and lower the minimum cash reserve requirements from 3 to 2.5 percent for the current biennium. This bill initially failed to meet the thirty-three votes needed to pass with the emergency clause meaning no funds could be transferred or created immediately. Some details regarding the 2017-2019 biennium budget are as follows: The Legislative Fiscal Office and the Department of Revenue certification of the February NEFAB forecast projects $533,348,408 net General Fund tax receipts for the month of April 2017. However, the actual net General Fund tax receipts were $477,844,852 which is a difference of $55,503,555. In Nebraska, unlike some other states, the Executive Branch and the Legislative Branch has always agreed to budget from the forecasting board projections. The forecasting board bases their projections off of information provided to them by both the Nebraska Department of Revenue and the Legislative Fiscal Office. In order to meet the fiscal year projection, we would need May and June receipts to increase by 5.35 percent each month, which is unlikely to happen.

This past Tuesday, May 9, I attended and spoke at a press conference, with twelve other senators, about our concerns with the budget bills. I did not like the budgeting bills because I believed that the forecasting numbers were not accurate. The numbers will eventually be lower moving forward because the Ag economy is down as of now. The urban economies have yet to be impacted by the ripple effect however, it is still coming. We have also been under forecast on receipts for fourteen out of the last twenty-two months. Ultimately, the legislature needs to cut more spending.

These bills went to Governor Ricketts’ desk for him to decide whether to sign them or to make line-item vetoes. The governor has stressed his opinion about wanting more cuts, as well as, not lowering the minimum reserve. By the time you read this article we will know what line items he has vetoed and which lines the legislature sustained or over road.

Congratulations to all the recent high school and college graduates from the district! I would also like to congratulate all of the athlete’s from the 44th Legislative District who qualified for the state track meet. Congratulation’s and Good Luck!

On May 2, we debated LB 461 which was the Governor’s and Revenue Committee’s comprehensive tax plan. After six hours of debate it fell short of the needed votes to pass. In its original form I did not support LB 461 but after several hours of negotiating with multiple senators we came up with an amendment that would have provided significant property tax relief, as well as, income tax relief that would have been triggered based on revenue growth of the State of Nebraska in future years. This would have been a good bill but in the end not enough senators were comfortable with the concept of triggers based off the forecasting boards’ projection for revenue growth for the state of Nebraska.

LB 98 was debated on general file for close to six hours and unfortunately ended up two votes short of breaking the filibuster. LB 98 would provide over and fully appropriated Natural Resource Districts with an additional 10-year extension, of an existing sunset date, on a 3-cent levy to attempt to reduce water consumption within their NRD boundaries. Although, we were unable to break the filibuster this year, LB 98 is an important issue that I believe we will need to revisit next year.

This week we are dealing with the final passage of our biennium budget. Although, this budget contains more spending than I am comfortable with, ultimately, the State of Nebraska needs to have a budget in place to begin our fiscal year, July 1.

Each Legislative session senators have an opportunity to extend an invitation to the ministers, in our respective districts, to offer the morning prayer. The Chaplain of the Day gives the invocation in the morning before the start of the legislative work day. There is an effort every year to have a faith leader from each district in Nebraska on at least one day. This past week wrapped up with final Chaplain of the Day Pastor Jack Whitcomb from First Congregational United Church of Christ in Stockville, NE. Other chaplains from Legislative District 44 that volunteered to give the morning prayer are: Pastor Rob Clay from Imperial Bible Church in Imperial, Preacher Wayne Vogel from McCook Church of Christ in McCook, Pastor Johnny Walker from West First Chapel in McCook, Pastor Phyllis Dunlop from First Christian Church in Elwood, and Pastor Jason Dowell from Freedom Baptist Church in Stamford. Again, I would like to thank each Pastor for taking the time to travel to Lincoln and offer the morning prayer to the legislature. If you think your pastor might be interested in volunteering for next year feel free to contact my office for more information.

April 25 the Legislature kicked off debate on the state’s $8.9 billion budget package. The state’s budget is structured on a two-year basis, with the budget passed during legislative sessions held in odd-numbered years. The committee’s budget package contains seven bills, four of those had already been advanced to select file as of last week. LB 328 that would provide for the $12,000 annual salaries of Nebraska’s state senators, advanced 35-0. LB 329 was advanced 40-0 and would fund salaries and benefits for judges and constitutional officers. Also, LB 330 which would appropriate funds for reaffirmed and new capital construction projects was advanced on a 40-0 vote.

LB 332 which was introduced by the Speaker at the request of the Governor and was introduced with the purpose to provide for transfers to/from cash funds and is ultimately sweeping money out of several cash funds. The Appropriations Committee’s budget recommended a series of transfers totaling $170 million from cash funds to the General Fund during the fiscal year 2018-19. During debate last week there were proposed amendments to take less money from a Department of Roads cash fund and ultimately decision to take $15 million each year from the Highway Cash Fund was left in place. There was a proposal to make up the $15 million taken from the Highway Cash Fund by taking the same amount from the Cash Reserve however, it failed. An amendment offered on LB 233 intends to save the state around $35 million by suspending the personal property tax exemption and the Angel Investment Tax Credit. This amendment would assure that LB 233 would take less money from the Cash Reserve Fund.

A few highlights from the 2017-19 budget are: $62 million general fund increase in state aid to schools, $15.4 million increase for Corrections staffing, programs and equipment, $14 million increase in the Nebraska Homestead exemption, $24.7 million in base reductions to state agencies, $13 million reductions to the University of Nebraska, to maintain a roughly 1 percent average budget growth. In order to reach an agreement there will be sacrifices that everyone will have to make in order to maintain the balance of cutting and spending in the package. The remainder of the budget bills are being dealt with this week. We have an additional $55 million short fall as the forecasting board indicated this past month due to a continued slowing of the state’s economy.

We are two-thirds of the way through the legislative session and Senator Chambers has officially been seated as the senator from District 11. Last Thursday, the Legislature accepted the recommendation provided by the special committee appointed to review the residency challenge. In the 2016 legislative race Senator Chamber’s opponent, John Sciara claimed that Chambers did not live in his north Omaha home. Sciara then filed a qualifications challenge against Senator Chambers. The challenger established nothing more than the incumbent has not always been physically present at his home on Binney Street. After hearing testimony and gathering exhibits, the special committee decided that Sciara was unable to prove that Chambers did not reside in his district the year prior to the election. The seven member committee recommended that the Legislature deny the challenge and dismiss Sciara’s petition. The legislature will be reviewing policies and procedures in case a challenge like this happens again.

The past week we also heard LB 640, introduced by Senator Groene. LB 640 would decrease the maximum levy for school districts and direct money in a property tax credit fund to increase state aid to districts that lose money as a result. This fund is supported by state income and sales taxes. The intent of LB 640 is to ensure that funding is distributed more fairly under the state’s school aid formula. Over the last decade we have seen the value on agricultural land increase and rural schools have seen less and less state aid because they are able to rely on property taxes to meet their needs. As a result we have seen a burden put on rural property taxpayers. I did support this bill but do acknowledge that property taxes in some urban districts could increase if LB 640 would be implemented. However, in many cases the property taxes on agricultural land has doubled in the last five years. All in all, this bill did not go anywhere and I ultimately do not see it going anywhere this year.

The legislature wrapped up this past week with debate on LB 461. LB 461 was introduced by Senator Smith and would lower Nebraska’s top corporate and personal income tax brackets, expand the earned income tax credit for low-income residents, cap statewide property tax growth and adjust the way agricultural land is valued for tax purposes. During debate last Friday, senators filed a number of motions to amend LB 461 which will guarantee a lengthy debate. When the Legislature adjourned Friday afternoon we had only made it through the first amendment filed.

LB 72 is designed to enhance access to capital markets for governmental entities by providing that general obligation bonds, notes, and other financing obligations of governmental entities have a statutory lien on bond pledged revenue sources. More simply put this would create a statutory lien on government issued bonds to ensure that bondholders are paid first if the issuing government entity goes bankrupt. LB 72 was introduced because current state law is ambiguous because it was unclear which of a city’s creditors would receive payment first in the event of a bankruptcy, a problem illustrated in 2013 by the bankruptcy of Detroit. Following a bankruptcy, the federal courts will often look toward state law to determine which of a city’s debtors are paid first. With LB 72 it would ensure that the bondholders have priority.

During floor debate it was explained that bondholders are providing a service to cities and other political subdivisions by loaning them money, in exchange for interest in order to build infrastructure projects. LB 72 would guarantee that government-issued bonds are backed by the full faith and credit of the issuing entity. This bill was filibustered during first round debate and thus required 33 votes to end debate and ultimately passed on a 29-14 vote to advance from General File to Select File.

Another controversial bill we heard this past week was LB 68 which would erase the authority of Lincoln and other Nebraska communities to enact gun regulation laws, with a few exceptions for Omaha. During debate it was stressed that this bill protects “the fundamental right to keep and bear arms” by centering authority for gun regulation in the Legislature. This would end the patchwork of local laws that have been putting law-abiding gun owners in jeopardy of violating local regulations as they travel in the state. This bill was also filibustered during the first round of debate and did achieve the 33 vote’s necessary to invoke cloture and ultimately advanced to Select File on a 32-12 vote. On both of these bills, I did support the cloture vote and ultimately voted to advance both bills to the next round of debate.

This week you will probably have heard our discussions are about property taxes, income taxes and the way we fund schools in the State of Nebraska meaning the TEEOSA formula. As of the writing of this article, I am seeing no consensus by the Legislature on any of these issues. I am hopeful during debate on these topics we can come to an agreement that will eventually bring relief to all tax payers in the State of Nebraska.

The appropriations committee is wrapping up their preliminary budget for the 2017-2019 fiscal years, they will give the legislature the final budget on Day 69 which is April 21st. They have a very difficult task. Nebraska’s economy is still growing but only at a 1 percent increase. The Appropriations Chair Senator Stinner is looking under couch cushions for any spare change that he can find. Amazon has voluntarily agreed to collect internet sales tax which will help, but the expected revenue from that will not make a significant impact on our economy.

LB 518 creates The Rural Workforce Housing Act by moving $7.3 million in seed money from the Affordable Housing Trust Fund which presently generates its funds from real estate document fees. Competitive grants would be awarded to nonprofit development organizations in areas with demonstrated housing needs, low unemployment, and the ability to complete projects within two years. This program will require a local one to one match of the grant program.

This past week we discussed LB 68 introduced by Senator Hilgers. LB 68 would override individual city and local ordinances, making firearm regulations consistent statewide. Hilgers introduced this bill with hopes to authorize the state to regulate the registration, possession, transportation, transfer and storage of firearms and ammunition. It would also allow cities and villages to retain the authority to enforce prohibitions on firearm discharge. This bill would remove a heavy burden that has been placed on Nebraska citizens and their right to bear arms, as well as, leaving the cities with tremendous abilities to continue to fight and regulate gun violence.

Senator Stinner introduced LB 222 to revamp the Nebraska Tourism Commission. This bill would expand the commission’s membership from nine to 11 governor-appointed members. Of those 11 members, four would be required to have professional, volunteer or public service experience that is related to the governance duties of the commission and the other seven members would be affiliated with the tourism industry. LB 222 would redefine the commission’s strategic plan to include the following: marketing strategies for promoting tourism, methods to expand existing tourism capacity, a review of revenue in the State Visitors Promotion Cash Fund available for tourism development at the state level, an examination of best management practices for the tourism industry, and recommended strategies to provide technical assistance, marketing services and state aid to local governments and tourism industry in Nebraska. LB 222 advanced to final reading by voice vote.

We have started all day debate and even though this session got off to a slow start we’re starting to get a lot of bills moving.  This past week my bill LB 182 was debated on the floor of the legislature.  This bill would clarify the qualifications for a program that provides financial assistance to cities and rural water districts to build safe drinking water projects.  Also this week the legislature heard two more of my bills, LB 535 and LB 317.  LB 535 provides an exception for filing a statement with the register of deeds when recording an oil, gas, or mineral lease.  LB 317 provides for a re-levy or reassessment of a special assessment for cities of the second class or village.  All of these bills were advanced to select file.

This week, the Natural Resources Committee’s two priority bills advanced to the next stage of debate.  LB 566, which would enter Nebraska into the Interstate Wildlife Violators Compact and strengthen penalties for Game Law violations, and LB 182, which helps cities and natural resource districts that run public water systems to qualify for funding and loan forgiveness from the state’s drinking water loan fund.  The bill did not add new funds, it just clarified that NRDs are eligible for the available federal funding.  Both of these laws will help Nebraska by providing additional tools to keep bad actors from hunting here, and by ensuring public water systems, and the NRDs who run them, are able to use federal funds available for their upkeep.

Another bill to help NRDs did not fare as well this week.  Sen. Friesen’s LB 98 would extend the sunset date of the law that allows a three cent levy authority for districts that are fully or over appropriated until 2026.  The levy can only be used for groundwater management and integrated management activities.  The bill was filibustered by senators who do not understand the value of helping NRDs fund the water management tasks that are needed to help them out of their appropriation statuses.  This is an important tool to generate matching funds revenue to access the state’s Water Sustainability Fund.

I had the opportunity this week to take some of my staff along with me to Imperial for a portion of the Upper Republican NRD’s water conference.  While it was a long time in the car on one day, I was pleased that we were able to travel through the district, so my staff could see the area I proudly represent.

Sen. Dan Hughes

District 44
Room #1210
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2805
Email: dhughes@leg.ne.gov
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