Wind energy tax exemption is again debated


May 30th, 2013

Lincoln, NE – On most bills, the final round of voting is a formality, without debate. Not so on the wind power bill by Omaha Sen. Steve Lathrop.
The bill would give large wind power companies a sales tax exemption. Senators who want to encourage more small-scale wind projects argued for an amendment requiring companies to spend in Nebraska up to 20 percent of the money they make selling power. Sen. Al Davis of Hyannis said that would help the state leverage its wind power into bringing business here:

“You can’t tell me that if we are going to be a $600 million investment in Nebraska, you need to have an engineering firm in the state that is willing to work on the project,” said Davis. “That some firm in California is not going to say let’s not build an office in Omaha because that’s not going to be an important thing. We have the resources and we are in the driver seat. Let’s not give our resources away,” said Davis.

But Lathrop said imposing buy local requirements upfront would backfire:

“Will you by putting a requirement someone has to buy Nebraska magically see someone who builds blades for these developments open shop?” said Lathrop. No, they are not going to open shop unless or until wind energy development takes off,” said Lathrop

Twenty one senators voted to pull the bill back from final passage to consider the buy local amendment, four short of the number needed. Senators then passed the bill on a vote of 38-2. Gov. Dave Heineman, who has heavily criticized it, would not say if he would sign or veto the measure.

Heineman did sign a bill by Sen. Brad Ashford aimed at reforming the juvenile justice system. Ashford says the idea is to switch from an emphasis on punishment to one of treatment for juveniles who commit crimes, and their families. Heineman called it one of the most important bills of this legislative session.

Meanwhile, State Auditor Mike Foley is questioning $6.5 million worth of spending by the Nebraska Department of Health and Human Services. The spending was in a program where the state pays health insurance premiums if it determines that’s cheaper than Medicaid.

The so-called HIPP program is used, for example, to help pay for policies of high need children born with significant birth defects. It’s available without regard to parents’ income, and used by more than 600 people. Foley said he audited 70 cases, and found problems in 55. He said HHS ignored its own regulations in not completing even one analysis to see if the private insurance was less costly than Medicaid. And he said there were duplicate payments, payment errors, and other financial discrepancies. Foley traced the problem to payment approvals by one low-level employee without proper supervision:

“This shocking level of mismanagement really was the perfect storm and I think created all kinds of problems for the department. And it’s going to take them a good long while to get it cleaned up,” Foley said.

HHS Director Kerry Winterer said the department will beef up its internal auditing. Vivian Chaumont, the Department’s Medicaid Director, said the department will examine whether the program should continue. And she said department officials agree with most of Foley’s recommendations.

“They point to significant failings in the HIPP program and for that I apologize to the citizens of Nebraska. This is not the level of performance that I expect from Medicaid,” said Chaumont.

Chaumont said a new person is now administering the program under direct supervision. She declined to say whether anyone had been fired, citing the privacy of personnel decisions.

The disclosure comes one week after Gov. Dave Heineman reduced Foley’s budget with his line item veto power, in a move Foley said would lead to laying off three staff members. The auditor said that would hurt the work of his office:

“The reality is you can only do so much work when the personnel is being reduced,” said Foley. “And there’s going to be a reduction of this type of work that we’re doing. And I think the public has a right to know when we have these kinds of problems. And I think the public has some expectation that when you spend 8 billion dollars in the state budget there’s going to be a level of oversight — an effective level of oversight. And that effective oversight is now being diminished,” said Foley.

Heineman said the auditor could make do with less money:

“I believe very, very strongly he could be more efficient. He said he could do that in the past and I’m confident he’ll do it in the future,” said Heineman.

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