Last Monday Governor Ricketts used his line item veto to pare down the State’s biennial budget. This step was necessary due to decreasing revenues coming into the State’s General Fund. State revenues have been down 11.4% overall for the year. Last week the State Legislature upheld each of the Governor’s line item vetoes. Because I believe even more cuts may be coming later this year, I voted to uphold each of the Governor’s line item vetoes.
After analyzing the Governor’s cuts to the budget, though, I became concerned about the impact that these cuts might have on our nursing homes and other critical programs for those who are most in need. So, I investigated the matter for myself. After talking with the Governor, I have since been assured that his budgetary cuts won’t have any adverse effects on our nursing homes. The Governor’s cuts were made to a block appropriation (a lump sum) for the Department of Health and Human Services (DHHS). Consequently, DHHS will not be reducing funding for our nursing homes; instead, areas have been identified where these cuts may be applied on peripheral programs without any debilitating effects on our nursing homes.
The Governor also cut $11.8 million in Medicaid spending for each of the next two fiscal years. This amounts to a 1.40% reduction in Medicaid spending. However, this will not mean that providers will receive across-the-board rate reductions. Again, the cuts were made to a block appropriation for Medicaid spending in the biennial budget. So, when Calder Lynch, the Medicaid Director, testified before the Health & Human Services Committee on May 18, he assured the committee members that Heritage Health would continue to fund all of their programs and services.
The situation is similar for the Division of Developmental Disabilities. Governor Ricketts’ vetoes amount to a 2.12% reduction for each of the next two fiscal years for the Department of Developmental Disabilities (DD). DD received the largest decrease, so it has been charged with the responsibility of managing their programs within their appropriated funds while minimizing adverse effects to critical services and without limiting access to programs for eligible individuals and families. They are now looking for ways to cut spending without eliminating these programs or services.
The Division of Behavioral Health will get a 1.62% reduction for each of the next two fiscal years. Again, this should not be misconstrued as across-the-board reductions. The Division of Behavioral Health will make cuts in non-core programs, such as training, special projects, initiatives, and administrative costs. Critical services will remain intact and will continue to be funded.
Finally, the Division of Children and Family Services will receive a 0.38% reduction for each of the next two fiscal years. This will not result in across-the-board rate reductions. Instead, Children and Family Services (CFS) will manage their appropriated funds in ways which minimize adverse effects to their programs and services. For instance, CFS plans to change how it administers drug testing contracts in order to garner enough savings to survive the Governor’s line item veto.
As you can see, while the Governor made several necessary cuts to our State’s biennial budget by exercising his power of the line item veto, none of these cuts will have any adverse effects on essential programs and services for those who need them. Instead, each of the departments named above are finding ways to cut spending without eliminating essential programs or compromising the quality of their services. I believe this will be good for Nebraska. In the end our State Government will be run with a higher degree of efficiency.
After I read through my copy of this year’s proposed biennial budget, I knew I would have to speak out. I knew long before the proposed budget ever came out that tax revenues would be down this year. I based my conclusions upon what I saw happening in agriculture. Contrary to the opinion of some of my colleagues in the Nebraska Legislature, I know that agriculture is the engine which drives our State’s economy. Commodity prices have been low, farmers have been struggling to pay their property taxes, and agricultural land valuations have unfairly raised the market value of agricultural land for property tax purposes. With these conditions in place, I figured something had to give.
Two weeks ago I spoke out on the floor of the Nebraska Legislature and pointed out the fallacy in the proposed biennial budget. The problem is that the proposed budget assumes a five percent increase in tax revenues. The economist, Thomas Sowell, pointed out this kind of economic fallacy on the federal level back in December 2012 when he said, “The Congressional Budget Office has been embarrassed repeatedly by making projections based on the assumption that tax revenues and tax rates move in the same direction.” They do not. The State’s budget should be based upon real numbers, not projected increases in tax revenues, which are nothing more than speculative and hopeful guesses. Therefore, I made the suggestion that we should resort to using last year’s budget, save for the Department of Corrections and the salaries of State employees.
Last Wednesday my previous comments on the floor were validated by the hard numbers of our most recent tax receipts. Overall, receipts for the General fund are down 11.4%. Bad economic news for the month of April prompted Governor Ricketts to hold a special news conference on Thursday to address the problem of our budgetary shortfall. According to the Governor, tax receipts have fallen short of their projected income 14 out of the last 22 months, and revenues for April fell short of their projected goal by $55.5 million. After the Forecasting Board revised their projections for the year, it was determined that the State would need $835 million over the course of the next two months in order to put us back on track. However, revenues for May and June from the previous year had only brought in $793 million. So, the reality is that our revenues have been going down, not up. Therefore, it makes no sense to continue spending by a budget which assumes a 5% increase in tax revenues.
It is my firm conviction that State Senators will be called back to Lincoln in the fall to reconcile our budgetary problems. If we wait until the fall, as I believe we will, we will be forced to make deep cuts into our State’s budget. All four appropriations bills have now been approved in the State Legislature. Therefore, it is up to the Governor to make the necessary cuts in order to save a special session of the Legislature later this year. Governor Ricketts may use his line item veto to make the necessary cuts in the budget or he may call the Senators back in a few months to fix the problem.
Political wrangling over the state’s biennial budget began in the Nebraska Legislature last week. Some Senators like to say that we don’t have a revenue problem. Actually, we do! There simply isn’t going to be enough of it to go around. Revenues will likely go down or stay similar to last year. Therefore, increases in the biennial budget can no longer be justified. Budgetary cuts must be made this year. Unfortunately, many of the Senators who comprise our state’s Legislature do not have the guts to make these necessary budgetary cuts.
The Appropriations Committee’s current budget proposal assumes a five percent revenue increase this year. I believe this is a faulty assumption to make. Because revenues will likely be down or be similar to last year, I believe the budget should have been prepared on the basis of actual numbers instead of projected income, which is really nothing more than a speculative guess. Therefore, I introduced an amendment to a budget bill which would have replaced the current budget proposal with last year’s budgetary numbers with an exception made for payment increases for state employees and health insurance increases, which have already been agreed upon through collective bargaining. My amendment, AM 1288, lost by a vote of 19-10-19. This means that 19 Senators voted for the amendment; 10 Senators voted against it; and 19 Senators voted “Present – Not Voting.” The amendment needed 25 “Yes” votes or what we call “green” votes to pass.
In an effort to increase revenues for the State, Sen. Watermeier had introduced LB 44 back in January of this year. LB 44 would impose a state sales tax on Internet sales. LB 44 was debated on Select File on Thursday with no vote ever being taken on the bill. LB 44 is a very controversial bill.
LB 44 puts lawmakers, like me, into a conundrum. If the Appropriations Committee’s budget is to become law, we would need the extra income collected through Internet sales in order to balance the budget and to make ends meet. However, the State’s Attorney’s General office has already declared the bill to be unconstitutional and the Governor has vowed to veto the bill should it ever reach his desk. Complicating matters even further is the fact that my bill, LB 601, would direct any revenues collected through an Internet sales tax to the Property Tax Cash Credit Fund. Therefore, I believe the only real solution to our State’s budgetary problems is to cut spending now!
If our State Senators do not make the necessary budgetary cuts they need to make now, we may suffer a greater budgetary shortfall than we experienced last year. Last year, we fell $900 million short of what we needed to meet the demands of the budget. Consequently, I have told the members of the Legislature from the legislative floor that if we do not make these necessary budgetary cuts now, we will likely be called back for a special session of the Legislature sometime in the autumn months in order to make these necessary cuts then. The issue of budgetary cuts is no longer a question of, “should we?”; instead, it is a question of, “when will we?”
The current budgetary crisis facing the Nebraska State Legislature reminds me of what former President Ronald Reagan wrote in an Opinion article in the New York Times on February 18, 1993: “The problem is not that people are taxed too little; the problem is that government spends too much.”
Last week Governor Rickets signed into law a consolidation bill which included one of my own bills. The Health and Human Services Committee added my bill, LB 342, into Sen. Blood’s priority bill, LB 88. I believe the resulting bill will be very good for Nebraska.
LB 88 will be good for our state because it ensures Nebraska’s participation in the new Enhanced Nurse Licensure Compact (ENLC). The ENLC allows nurses to have a single multistate nursing license so they may practice in their home state as well as in another compact state. For instance, a nurse living in Kimball, who is licensed in Nebraska, would be able to work in both Kimball and in Pine Bluffs without having to obtain a separate nursing license for the state of Wyoming. In the event of a natural disaster, the ENLC also allows nurses from out of state to respond readily in order to help those in need of medical attention without unnecessary interference from state governments.
The main reason we need LB 88 is because it helps us address the current nursing shortage we have in our state. Many of our hospitals, medical clinics, and nursing homes already struggle to find the qualified help they need. The aging Baby Boom population is especially increasing our demand for nurses. The Nebraska Center for Nursing expects half of all of Nebraska’s nurses to retire within the next ten years. Nebraska’s shortfall is projected to be nearly 4,000 nurses by 2020. Membership in the ENLC will encourage nurses living in other states to move to Nebraska. It does this by removing the expensive barrier of repetitive and redundant licensing.
Another benefit of this law is that it amends the Nurse Practice Act to streamline licensure for military spouses. This legislation allows military spouses with nursing licenses, who often relocate every two years, to practice in Nebraska. Because licensing can be very expensive, I do not want the spouses of our military personnel to have to shoulder this burden every time they move to another state.
The Enhanced Nurse Licensure Compact also does much to keep patients safe. All nurses practicing under the multistate license must meet a minimum set of licensure requirements, including a fingerprinted federal criminal background check. The requirements contained in the ENLC represent the highest regulatory standards for licensed health care professionals in the country, and nurses who fail to meet these standards will not be eligible for the multistate license nor the privileges which accompany it.
The clash between East and West finally came to a head in the Nebraska Legislature last week. Two bills that are very important to me were debated on the floor. One had an easy ride, while the other one had a bumpy and rugged ride.
On Thursday my bill, LB 382, advanced to Enrollment and Review for Select File. LB 382 was a bill I introduced which takes highway allocation funds out of the category of restricted funds in order to provide some flexibility for county governments. LB 382 was able to advance in the Legislature because Speaker Scheer placed it on the list of Consent Calendar bills. Only bills that are considered to be non-controversial and which have no fiscal impact on the State’s General Fund are considered for the list of Consent Calendar bills. Thursday was devoted entirely to Consent Calendar bills. LB 382 passed by a vote of 29-0-16. This means that 29 Senators voted for the bill; nobody voted against it, but sixteen Senators voted Present-Not Voting. Four Senators were absent and did not vote. LB 382 had the easy ride.
The legislative match of the week came on Friday when LB 461 came up on the floor for debate. LB 461 is an omnibus bill created by the Revenue Committee, which consolidated income tax relief bills with agricultural land valuation bills, rolling them into one new bill. The bill poked at the clash between those living in our State’s population centers, who want income tax relief and residential property tax relief, and farmers in our rural districts who need property tax relief and agricultural land valuation reform. 24 amendments were proposed for the bill, virtually killing it before it ever got out of the gate. Debate on the bill lasted for three hours, resulting in a stand-off and ending in a filibuster.
This is bad news for farmers in Nebraska. However, I want all of my constituents to know that I am not done pursuing property tax relief and agricultural land valuation reform. I went to Lincoln to fight for two things: Property tax relief and agricultural land valuation reform. These two issues shall forever remain at the forefront of what I do legislatively until they become a reality in our State. Fortunately, my agricultural land valuation reform bill, LB 602, was not one of the bills consolidated into LB 461. My bill remains in the Revenue Committee and can still be voted out. Consequently, the fight isn’t over yet, and I am exploring new strategies and new ways to facilitate property tax relief and agricultural land valuation reform with the sincere hope of making it happen for us this year.
Despite the short week a lot happened in the Legislature last week. Two important bills and one resolution came up on the floor of the Legislature for debate last week.
On Monday LR 6 came up for debate on the floor. LR 6 is a Legislative Resolution introduced by Sen. Laura Ebke, which calls for an Article V, Convention of the States. I receive more e-mails from constituents living in district 47 in support of LR 6 than on any other piece of legislation. I expressed strong support for LR 6 during the debate. However, the resolution was filibustered without a vote ever being taken. Consequently, the resolution likely won’t come up again for a vote this year. The resolution will most likely be carried over to next year’s session.
On Tuesday LB 44 advanced to Select File. LB 44 is a bill which would enforce a sales tax on Internet sales. While the state of Nebraska needs the extra income an Internet sales tax would generate, my primary interest is to divert the revenue from an Internet sales tax to the Property Tax Credit/Cash Fund in order to give our citizens some much needed property tax relief. This was why I voted for this bill and this is also why I introduced LB 601. If passed into law, LB 601 would divert these funds to the Property Tax Credit/Cash Fund.
On Wednesday Sen. Mike Hilger’s firearms bill, LB 68, overcame a filibuster attempt to advance to Enrollment and Review for Select File. This bill would prevent counties and other local municipalities from adopting gun laws more strict than our state laws. The purpose of the law is to prevent a patchwork of differing gun laws across the state. Nebraskans need consistency in their gun laws across the state so that law-abiding citizens can remain law-abiding citizens. The bill gives the Nebraska Legislature the exclusive authority to regulate the ownership, possession, transportation, carrying, registration, transfer, and storage of firearms, ammunition, and firearms accessories. The bill allows local authorities to regulate the discharge of firearms, and to provide zoning designations, and to enforce policies relating to the use of firearms by law enforcement agencies and other city employees.
Last Tuesday my priority bill, LB 432, advanced out of Select File and into Enrollment and Review for Engrossment. What this means is that the bill will be analyzed by Capitol lawyers and finalized for a final vote on the floor. LB 432 takes away the authority of tax asking entities from adding the collection of delinquent taxes into their tax asking ability. Onced passed into law, this bill will offer some much needed property tax relief to property owners in our State.
On Wednesday Gov. Pete Ricketts signed Sen. Dan Watermeier’s bill, LB 46, into law. LB 46 creates a special “Choose Life” license plate, which has yet to be designed for Nebraska’s automobiles. Although the Choose Life license plates will cost an extra $5.00, the extra expense will be donated to charity.
The most controversial bill of the week was Sen. Adam Morfelds’s bill, LB173. This bill would prohibit employers from discriminating against employees on the basis of their sexual orientation or their gender identity. I intended to oppose this bill, but in an unusual twist of events Sen. Morfeld led a filibuster against his own bill. Because no vote was taken on the bill, LB 173 will be held over for a vote in next year’s session.
Another very rare event took place at the Capitol on Friday. A Special Committee of the Executive Board held a special hearing to determine whether or not Sen. Ernie Chambers of Omaha’s legislative district 11 was eligible to keep his Senate seat. Mr. John Sciara, who ran against Sen. Chambers in last year’s election, challenged the incumbent on the basis that he did not reside within legislative district 11 one year prior to the election. The Special Committee of the Executive Board ruled in favor of Sen. Ernie Chambers. However, the most ironic part of the hearing was that the Sen. Ernie Chambers’ eligibility hearing was held in the Sen. Ernie Chambers Judiciary Hearing Chamber.
Last week President Donald Trump signed an order to allow TransCanada to build the rest of the Keystone XL Pipeline. The Keystone XL pipeline is an issue which has created a lot of controversy in our State, so today I would like to address some of the most important questions surrounding the pipeline and clarify why this pipeline will be good for our State.
What will flow through the Keystone XL pipeline? Some people are confused about what will be flowing flow through the KXL pipeline. First, oil flowing through the pipeline will not be 100% Canadian crude oil. Crude oil from Montana will enter the pipeline at Baker, Montana and crude oil from Nebraska will also enter the pipeline at Steele City, Nebraska. This will be good for oil producers in our State.
Second, crude oil, especially the kind from the Canadian tar sands, cannot flow through the pipeline in its raw form. So, the crude oil is mixed with Bitumen in order to form a product known as Dilbit. Bitumen is diluted with one or more petroleum products, usually natural gas, in order to liquefy it for transport through the pipeline. The crude oil of the KXL pipeline will be the same kind of crude oil which currently flows through the Platte pipeline, which runs east and west through Nebraska near the Platte River.
Where will the KXL pipeline go? Crude oil from the KXL pipeline will be transported to refineries in Oklahoma, Louisiana, and Texas. At no point will the KXL pipeline run through the water table of the Ogallala Aquifer. Instead, the pipeline will travel over the Ogallala Aquifer. If the pipeline were ever to spring a leak over the Ogallala Aquifer, the viscosity of the Dilbit would cause it to stop seeping into the ground once it reached soil with a ground temperature of 50 degrees F or below. Last year the Canadian government produced a study which showed that diluted Bitumen floats. So, even if the oil ever reached the water table of the Ogallala Aquifer, we now know that it would float on top of the aquifer.
Who owns the Canadian tar sands? Answer: the Canadians. However, Koch Industries is the largest foreign investor in the Canadian tar sands. Koch Industries is an American company run by the Koch Bros., who hold the lease on 2,000,000 acres of Canadian tar sands. Conoco Philips and Shell Oil follow behind the Koch Bros. as the next largest foreign investors. China is considered a small player in the industry because they hold the lease on only 5% of the Canadian tar sands.
TransCanada has agreed to 57 special conditions for building the Keystone XL pipeline. So, what are some of these conditions? A few that I would like to highlight are these six: 1) the pipeline must be able to withstand a 65 ton excavator from breaking through it; 2) the pipeline must have a cover of four feet of topsoil, except in rocky areas, where it must have three feet of topsoil; 3) the pipeline has to be inspected every two weeks; 4) all pressure rated fittings and components (including flanges valves, gaskets, pressure vessels and pumps) must be rated for pressure ratings commensurate with the Maxwell operating pressure of the pipeline; 5) TransCanada must limit mainline pipeline overpressure protection to a maximum of 110% of operating pressure during surges; and 6) Pipeline markers must be installed and maintained for line of sight markings, except in agricultural fields.
How much property tax will be paid after the Keystone XL pipeline depreciates for income tax purposes? The KXL pipeline is said to depreciate in 15 years. Beginning in year 16, property taxes will continue to be assessed on the KXL pipeline according to centrally assessed standards. For example, the Platte pipeline, which was completed in 1953, and runs through Cheyenne County, pays an estimated $42,000 per year in property taxes.
Will lands in Nebraska be seized by eminent domain? TransCanada is not using eminent domain to seize our precious farmland. The KXL pipeline will be just like any other water, sewer or utility line crossing someone’s property. The landowner shall always retain ownership of the property, and once construction is complete, they will continue to possess economic right to the surface. The landowner shall always be able to use the land for agricultural activities. Easements and agreements will only provide for the right to access the pipeline during construction and for maintenance.
Will the KXL pipeline be safe for the environment? The Keystone XL pipeline will be one of the safest pipelines in the United States. The Platte pipeline has been in existence since 1953 and has never had a spill. The Platte pipeline pumps the same product as will the Keystone XL pipeline. The United States Department of Transportation has determined that transporting oil via a pipeline is 451 times safer than transporting it by rail or by truck. So, the KXL pipeline will provide us with the safest way to move all of this oil.
Finally, will the Keystone XL pipeline be good for all Nebraskans? Once constructed the KXL pipeline will free up space in the Platte pipeline so oil in Western Nebraska can be pumped through the Platte pipeline, making our oil production more competitive. It is very expensive to transport oil by rail or by truck. The KXL pipeline will help us reduce these costs. The construction of this pipeline will come at a time when our State needs increased revenue due to a downturn in the economy. The Keystone XL pipeline will give us some relief by paying property taxes to those counties through which it passes.
This week the Nebraska Legislature ended public hearings on bills. Starting on Tuesday the Senators will spend the whole day engaged in floor debates. Due to the shortness of the session, almost all of the bills which will get debated on the floor will be priority bills. Those bills without a priority status and which get voted out of committee will likely become carry-over bills for next year’s legislative session.
One of the last bills to get a public hearing this year was Sen. Friesen’s bill, LB 389. This bill would modernize Nebraska’s telecommunications laws, allowing for greater investments and more improvements by wireless telecommunications providers. The bill would allow newer technologies to move into the State, especially the kind known as small cells, which would expand coverage to the level of fifth generation (5G) wireless capabilities. LB 389 also ensures that local governments would maintain control over the permitting process, giving them authority to approve or deny an application and to be adequately compensated through application fees and other cost-based fees for small wireless facility attachments.
Although LB 389 received a late hearing, the bill stands a good chance of getting voted out of the Transportation & Telecommunications Committee and advancing through floor debate. Because Speaker Scheer has included LB 389 as one of his 25 Speaker priority bills, the bill stands a good chance of becoming a law. I support LB 389 because I believe it will provide better wireless services for our families, it will enable our schools to better educate our students in an age of technology, and it will help our local businesses to better compete in the global marketplace.
Finally, Sen. Brewer’s bill, LB 502, received its public hearing last Thursday, the last day for public hearings. This bill is meant to restore the constitutional rights of Nebraskans to be able to carry a firearm, concealed or open, without being forced to take a State-mandated test and pay a fee. This bill keeps Nebraska’s current concealed carry permit system, thus retaining the option of issuing permits that would allow state residents to carry while traveling to other parts of the country that honor Nebraska’s current concealed carry permit. This bill does not change the law concerning people currently prohibited from carrying a handgun.
The right to bear arms carries with it a great deal of responsibility. Besides the Constitution, the next best protectorate of gun ownership rights is self-discipline. Discipline is a virtue which every gun owner ought to possess in abundance and exhibit often. As President George Washington said in his first State of the Union Address on January 8, 1790, “A free people ought not only to be armed, but disciplined.” May we never forget that lesson our first President taught us.
Good News! My priority bill, LB 432, has made it out of committee and is now in General File. LB 432 is the bill I introduced readers to last week, which will remove budgeting for delinquent taxes. This bill will give property owners some property tax relief.
Last week we also had a public hearing on my bill LB 568. LB 568 is a bill which creates a new temporary substitute teacher certificate. This idea came to me and was supported by 20 superintendents in the Panhandle, including Travis Miller of the Bayard Public School District who traveled all the way to Lincoln to testify in favor of the bill at the Capitol. Bayard Public Schools should be very proud of the commitment of Mr. Miller.
Many of the schools in western Nebraska are hard pressed to find enough substitute teachers to adequately staff their schools throughout the year. As a result, principals and even superintendents sometimes find themselves teaching classes. I was asked by our superintendents to do two things: lower the educational requirements and extend the length of time that a substitute teacher may teach.
After looking at the requirements for substitute teachers in some of our neighboring states, I decided that Wyoming’s certificate provided the best model for my bill. South Dakota has no educational requirements for substitute teachers, while Colorado requires a bachelor’s degree. Wyoming, on the other hand, requires the minimum of a high school diploma. Although my bill lowers the educational requirements for substitute teachers to the minimum of a high school diploma, individual school districts are not obligated to abide by these minimum standards.
LB 568 extends the number of days that a substitute teacher may teach in a school district from 45 days to 90 days. After I introduced LB 568, the Department of Education decided to extend the old certificate out from 45 days of teaching within a school district out to 90 days as well. So, even if LB 568 never becomes a law, our western schools will find some relief next year.
I also included Wyoming’s requirement of passing two constitutional exams. LB 568 requires applicants to take a course and pass an exam on both the United States Constitution and the Nebraska Constitution. I am happy to report that these two requirements were never challenged during the public hearing on the bill.
Additional requirements for my new Temporary Substitute Teacher Certificate include that an applicant must: Be 21 years of age or older, complete 24 hours of in-service training, complete 30 hours of classroom observation, submit to fingerprinting for a background check, complete the application and pay the required fee of $80.00.
Finally, Don Stenberg, the Nebraska State Treasurer, is holding $170 million for 350,000 Nebraskans in unclaimed property. In order to get your unclaimed property you will have to submit a claim. To check to see if your name is on the list, please visit www.treasurer.nebraska.gov and click on the unclaimed property tab, or you may call my office at (402) 471-2616 and my staff will check to see if your name is on the list.
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