What’s on tap at the Capitol for 2012?


January 3rd, 2012

Lincoln, NE – The Nebraska Legislature begins its 2012 regular session tomorrow, with a major focus expected to be the state’s controversial child welfare reform. But other issues affecting everything from taxes to what goes on in school are also likely to be thoroughly discussed.

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Ask Nebraska legislators what they expect to be the big issues in the coming session, and one subject that’s almost certain to come up is child welfare reform. The state’s system for dealing with children including those removed from their homes for abuse or neglect has been the focus of controversy for years.

Sen. Kathy Campbell says the reforms to child welfare have not worked, and "We want to build a new system." (Photo courtesy Nebraska Legislature)

In 2010, Nebraska began implementing changes including relying more on private agencies, in a reform program known as Families Matter.

Last month, Sen. Kathy Campbell, chairwoman of the Health and Human Services Committee, said the Families Matter initiative has not worked, adding “We want to build a new system.”

The committee’s 18 proposals include returning case management from private agencies to the state and creating a new Department of Children’s Services. Gov. Dave Heineman said it’s an important issue, and he wants to discuss it with all concerned. But he added it appears the 18 recommendations carry a “substantial cost” that lawmakers did not indicate how they would fund.

Speaker Mike Flood says the Legislature will have more funds to work with in 2012, but that may cause even more budget battles. (Photo courtesy Nebraska Legislature)

Funding may not be as big an issue as last year. Twelve months ago, lawmakers entered the session facing a projected one billion dollar budget gap, which they closed through a series of cuts. This year, for the first time in four years, the session begins with stable projections and revenues, said Speaker Mike Flood.

“On its face, people might say Well, that’s much easier.’ And I don’t disagree that we’re in a better situation,” he said. However, he added, sometimes more money means more problems. “We’ll have to figure out what the Legislature wants to do and I have a feeling that the budget is going to be a major issue this session, because there’s more money,” Flood said.

In late October, projections for how much the state will raise from taxes by the end of the current two year budget were increased by 113 million dollars, or about 1.5%. At the same time, projected state aid to schools was cut from $880 million to $830 million, because of higher property values and lower spending.

But Sen. Greg Adams, chairman of the Education Committee, said he doesn’t put a lot of stock in those projections, and doesn’t expect to see budget cuts restored.

“There may be groups on the sidelines that got cut that want to come back with legislation to try to restore some portion of their cuts,” Adams said, while adding, “I don’t think that’s going to happen. If you open the door to one, you open the door to everybody.”

Appropriations Committee Chairman Sen. LaVon Heidemann said the way the school aid formula works, schools still have resources, although it’s from local property taxes. He indicated he’s not inclined to restore state aid.

But Sen. Jeremy Nordquist of Omaha, another member of the Appropriations Committee, said he’s sympathetic to restoring school aid back to $880 million. “Certainly we don’t need to continue to shift the burden to local districts any more than we already have,” said Nordquist. “Many districts have seen property taxes go up and I think any further reduction in what was budgeted will result in higher property taxes around the state.”

Sen. Greg Adams, who chairs the Education Committee, says he doesn't expect cuts to school aid to be restored. (Photo courtesy Nebraska Legislature)

Higher sales taxes for cities are also likely to be discussed this session. A bill left over from last year would allow cities to increase their sales taxes by half a percent with voter approval.

At the same time, tax cuts may also be debated. Flood said there’s discussion of cutting corporate income taxes, or raising the income level where the top individual income tax rate hits, thereby helping the middle class.

Flood said a lot will depend on what happens when revenue forecasts are recalculated in February. If they’re continuing on a steady path, he said he’d be “highly inclined” to consider a tax cut. Flood said he has an open mind, and proposals should be introduced early in the session to give senators the opportunity to consider tax cuts.

Sen. Tony Fulton plans to introduce a bill to require the Pledge of Allegiance in public schools. (Photo courtesy Nebraska Legislature)

Nordquist is skeptical about whether the state can afford tax cuts. If they are considered, he says, he’d prefer they be directed to low income seniors.

Other subjects to be considered this year include a proposal by Sen. Tony Fulton to require the Pledge of Allegiance in Nebraska school classrooms. His proposal would give students permission to opt out if they want.

Fulton said his proposal is an example of an idea brought to him by a regular citizen, and he thinks it’s important. “I’ve had people say Oh, you’re just introducing that because it’s like apple pie, and (you want to) wrap yourself in the flag.’ And my response to that is ‘Well, that’s a good thing, right?'” he said.

Another issue expected to generate debate is how far Nebraska ought to go toward setting up a health insurance exchange – a kind of marketplace where people can shop for insurance policies under the federal health care law. The deadline to apply for funds is June 29, which means the Legislature would have to act before its anticipated mid-April adjournment.

Heineman has said he wants to wait and see if the U.S. Supreme Court rules the law unconstitutional. That decision that might not be released until late June.

Sen. Steve Lathrop says waiting’s a bad idea: “That is simply going to be too late. We need to do something in the upcoming session to address a state-developed health insurance exchange or we’ll have one imposed on us by the federal government.”

Sen. Rich Pahls, chairman of the Banking, Commerce and Insurance Committee, which oversees insurance legislation, said bills will be introduced on health insurance exchanges. But he said he doesn’t know how far they’ll go, adding that other federal health care deadlines have already been extended.

“We’re going to be prepared no matter what,” he said. “I think you’ve been able to ascertain by comments coming from the governor’s office that if need be a special session would occur if we can’t get it handled this session.”

In other words the work foreseen for this session won’t be over until it’s over, and even then, it might not be.

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