Lawmakers wrestle with tax cuts, pipeline, and Medicaid


March 20th, 2012

Lincoln, NE – Debate began on a new tax cut proposal, a new amendment affecting the Keystone XL pipeline was unveiled, and senators argued over Medicaid services for children in the Legislature Tuesday.

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Sen. Tanya Cook. (Photo courtesy Nebraska Legislature)

Sen. Abbie Cornett, chairwoman of the Revenue Committee, described the new tax cut proposal as a “downpayment” on tax relief, and a compromise with critics concerned about its cost. It would save a family of four with the state median income of $48,000 about $52 a year, according to the Open Sky Institute, a group that’s been critical of the bill.

Unlike Gov. Dave Heineman’s original proposal, it would not reduce taxes on income above $58,000 a year for married joint filers. And it would cost the state treasury, significantly less: about $56 million a year when fully implemented, compared to more than twice that under the original proposal.

But lawmakers opposed to the proposal, like Lincoln Sen. Danielle Conrad, said it remains unaffordable. Debate on the bill continued into the evening.

The new pipeline proposal discussed by the Natural Resources Committee says a pipeline company cannot use eminent domain authority to cross the property of unwilling landowners until the governor approves a new route.

It requires the Nebraska Department of Environmental Quality to hold public hearings, and pipeline companies to reimburse the department if they don’t use its review. And it extends the department’s authority to review proposals until Jan. 1, 2013. Sen. Jim Smith of Papillion, the bill’s sponsor, said he expects it to be debated next week.

And on another topic, lawmakers moved ahead with a bill supporters say is intended to clarify that the state must follow federal law in providing Medicaid services to children.

In a public hearing, people complained that the Department of Health and Human Services was being too strict in interpreting what services children are eligible for.

On Monday, Vivianne Chaumont, the Department’s Medicaid director, wrote a letter to state senators. In it, Chaumont said if the bill were interpreted to cover behavioral analysis services for children with autism, that could cost $42 million a year. Omaha Sen. John Nelson picked up on that point. “If we’re going to expand into the area of autism, autism is a very expensive endeavor. So that was my concern. If this is what the amendment, or the amendments and the bill is going to do, then I think we need to have more financial information from a fiscal standpoint. Because if it’s not covered by Medicaid, then it’s going to come out of general funds. That’s what I’m a little concerned about,” he said.

Supporters of the bill argued that because the Department says its already providing all the services required under federal law, there should be no increased cost. Among them was Omaha Sen. Tanya Cook. “In theory the agency is providing this care, so what I’m confused about is how the agency came up with a $42 million fiscal note for something that in theory they’re doing. What we found, through testimony and limited analysis, is that the agency is not providing the services to children that they are eligible for, and encouraging parents to put their children into the child welfare system as opposed to putting on the Medicaid roles, where there would be a 40-60 (state-federal) match,” she said.

With supporters vowing to get an updated cost estimate before the next round of debate, senators gave the bill first round approval on a vote of 33-0.

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