Property tax, prisons, health among issues facing Unicameral in 2015

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January 6th, 2015

Property tax, prisons, health among issues facing Unicameral in 2015

(Property tax, prisons, health among issues facing Unicameral in 2015)

Property taxes, prisons, and health care are among important issues that will be discussed in this year’s session of the Nebraska Legislature, which opens Wednesday. The 49 senators will confront these and a host of other issues in a session over the next six months.

Lincoln, NE – Ask different senators what they expect to be the important issues in the Nebraska Legislature this year, and you get some similar answers: “Property taxes,” Sens. Al Davis of Hyannis, Kathy Campbell of Lincoln, and Colby Coash said.

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Of course, you get different answers, too. Sen. Galen Hadley of Kearney mentions fixing the Departments of Correctional Services and Health and Human Services. And Sen. Jeremy Nordquist of Omaha lists Corrections and property taxes as key issues.

Gov.-elect Pete Ricketts says property taxes are his top priority.

But despite all the support from senators and the governor-elect, making a significant dent in property taxes may be difficult.

For example, Ricketts proposes expanding an existing property tax credit program. Last year, that program saved the owner of a $100,000 house about $70 of the roughly $1800 he or she owed, using the average statewide tax rate. The program cost $140 million, mostly collected through income and sales taxes.

There’s also expected to be a proposal to lower ag land valuations. That could help some farmers and ranchers, while shifting property taxes onto homeowners and businesses.

Another proposal, to limit how much property taxes could increase in a single year, may have to wait for voters to approve amending the state constitution in 2016.

Meanwhile, Sen. Al Davis is considering a fundamental change in how to pay for schools, the single largest user of property tax dollars. “I’m kind of looking at a local income tax per district, which would offset property taxes,” Davis said.

Davis argues it’s a matter of fairness. “You could have a million dollar farm or you could have a million dollar stock portfolio. The two are treated completely differently,” he said. “The stock portfolio is not assessed any kind of property tax; the farm is, even though that farm may not generate much revenue, especially now that we’re back in to low commodity prices.”

Davis acknowledges such a proposal would generate opposition to a new tax.

Meanwhile, Sen. Jim Smith of Papillion wants to cut income taxes. For the first two years, he’d use savings from the cash reserve to make up for lost revenues.

After that, Smith says, savings would have to be found elsewhere. “We would begin to require some modest budget cuts as well to help to fund it,” he said.

Critics say if the plan had been in place for the last 10 years, it would have required budget cuts equal to what the state spends on education and public safety. Smith says that ignores the boost cutting taxes gives the economy. “When people keep more of their money, they use that money wisely and they spend it in different ways that spur economic activity. And so I believe that we actually grow the pie, as opposed to keeping the size of the pie stationary,” Smith said.

Sen. Galen Hadley is running for the job of speaker of the Legislature, who sets the agenda. He says income tax changes may take a back seat this year. “I’m certainly not downplaying the income tax thing. But I think our first goal will have to be doing something with property taxes,” he said.

Sen. Colby Coash, also running for speaker, agrees property taxes and changes to Nebraska’s overcrowded prison system will be top priorities.  Senators will consider using more probation to keep inmates out of prison.

Coash says building more prison space may also be in the mix. “I don’t see anybody saying (let’s add) 1,000 beds. But I could see us adding capacity within some of the institutions we already have,” he said.

One issue sure to be debated again is expanding Medicaid. Supporters want the state to accept federal money to cover about 54,000 more Nebraskans. Critics say the state’s 10 percent eventual share of the cost would take money away from other needs.

Sen. Kathy Campbell says supporters will try linking expansion to reforming the current program. “That’s what states are doing. They’re using those federal dollars…to say, ‘Okay, what works best in our state to serve people on Medicaid?” she said.

Another issue sure to generate debate is driver’s licenses for people who entered the country illegally. Omaha Sen. Jeremy Nordquist says he’ll introduce a bill to allow such licenses. “We’re the only state that doesn’t do it for the ‘dreamers’ – the youth. And now that the president expanded that, that’ll cover more people,” Nordquist said.

Nordquist is referring to President Barack Obama’s executive action to prevent deportation of an estimated 5 million people nationwide.

Lawmakers must also approve a budget – deciding where roughly $8 billion in taxpayer money goes over the next two years.

With the turnover produced by term limits making more than one-third of the senators new this year, Coash says, it’s hard to predict what will happen. “This is a new governor with 18 new legislators and we’re going to negotiate basically 50 people’s budget priorities – 49 senators and a governor – as to what we should be spending money on,” he said. “It’s a little bit of an unknown right now.”

How that — and other — unknowns are resolved, should become clearer between Wednesday and when the Legislature adjourns in mid-June.

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