Taxpayers Legislative Agenda

www.afpnebraska.com

Spending
Three spending bills have been adopted by the Legislature and signed by the Governor: LBs 131, 968 and 969 that totaled over $7 billion in state government spending.
4 3 2 1 0

State Spending
(in billions)

LB 131 allowed for Cash Reserve funds to be transferred to the state General Fund to be used for construction projects at the University of Nebraska, additional funding for K-12 special education and additional monies for the Roads Operations Cash Fund, among other projects.

Nebraskas state budget is done on a biennial basis. This means the two-year budget for state government is constructed in the Legislatures 90 day session while tweaks to the budget are adopted during the 60 day short session. The Unicameral is set to conclude the short session in April and has adopted LB 968 as a mid-point adjustment to the state budget. LB 969 also sought to adjust the budget passed in 2011 by creating cash transfers for specific programs. Additional funding was transferred to the Roads Operation Cash Fund as well as a diversion of $3.8 million from the General Fund to the Ethanol Production Incentive Cash Fund. In sum, the mid-biennial adjustment represented by these three bills is meant to ensure the state has the appropriate funds in place to pay its obligations, as well as to inject new priorities into the states finances.

A-Bills
Appropriations bills (A-Bills) are any piece of legislation that will require additional spending to implement. Twenty-six A-Bills were introduced this session. Issues ranged from $900 (Sen. McGills LB 787) to conduct inspections of state prisons to $4.4 million (Health and Human Services Committees LB 540) to provide family planning services to Medicare eligible individuals who are at or below 185% of the federal poverty line.

1992-1993 1993-1994 1994-1995 1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

The total cost, according the legislative fiscal notes, to implement all 26 A-bills this session would be $11,210,986.
Cash Reserve Historical Chart Beginning Balance 0 37,046,760 35,574,209 22,302,064 23,730,085 17,684,929 50,423,929 40,037,043 31,937,043 26,937,043 17,437,043 27,750,505 20,481,804 18,189,565 40,962,684 132,583,702 145,700,124 142,159,429 170,236,099 110,066,099 59,142,545 87,028,337 177,167,720 273,616,790 516,087,791 545,545,797 578,191,863 467,201,626 313,201,626 434,058,718 341,208,718 341,208,718 Ending Balance 37,046,760 35,574,209 22,302,064 23,730,085 17,684,929 50,423,929 40,037,043 31,937,043 26,937,043 17,437,043 27,750,505 20,481,804 18,189,565 40,962,684 132,583,702 145,700,124 142,159,429 170,236,099 110,066,099 59,142,545 87,028,337 177,167,720 273,616,790 516,087,791 545,545,797 578,191,863 467,201,626 313,201,626 434,058,718 341,208,718 341,208,718 341,208,718 Balance as % of revenues 4.7% 4.5% 2.7% 2.7% 1.7% 4.4% 3.5% 2.3% 1.8% 1.1% 1.7% 1.2% 1.0% 2.0% 6.3% 6.9% 5.9% 6.9% 4.7% 2.4% 3.2% 5.8% 8.2% 15.1% 15.6% 17.2% 14.6% 8.9% 11.9% 9.0% 8.8% 8.5%

Taxes
Support LB 970 Signed by Governor One of AFP-Nebraskas top priorities this legislative session was passing the Governors tax relief package (Sen. Cornetts LB 970). The package included three components: reduce state personal income tax rates, reduce the top corporate income tax rate and elimination of the states Death Tax. Literally thousands of AFP-NE members contacted state senators via phone calls and email expressing their support for LB 970. While many senators expressed skepticism that the state could afford tax cuts (look at the chart showing the steady increase in state spending and decide for yourself whether we can afford to lower taxes). LB 970 has been sent to the Governor and is poised to become law. The compromise version of LB 970 does not lower corporate income tax rates nor repeals the Inheritance Tax, but it will lower the personal income tax rate for Nebraska

Fiscal Yr FY1983-84 FY1984-85 FY1985-86 FY1986-87 FY1987-88 FY1988-89 FY1989-90 FY1990-91 FY1991-92 FY1992-93 FY1993-94 FY1994-95 FY1995-96 FY1996-97 FY1997-98 FY1998-99 FY1999-00 FY2000-01 FY2001-02 FY2002-03 FY2003-04 FY2004-05 FY2005-06 FY2006-07 FY2007-08 FY2008-09 FY2009-10 FY2010-11 FY2011-12 est FY2012-13 est FY2013-14 est FY2014-15 est

families. The income tax cut will cost the state $56 million in lost annual revenue and keep more money in our pockets. While we are pleased that some tax relief will happen this session, more should have been done. With the state set to grow spending over the two-year budget cycle of 2011-2013 by nearly $190 million; implementing the full tax relief package by refusing to increase spending could have gone a long way in funding significant tax relief.

To reiterate, while we support overall spending cuts by refusing to increase spending over the two-year budget cycle, the Legislature could have funded significant tax relief and further cut personal income taxes, corporate taxes and eliminate the State-Local Tax Burdens, All States Local Death Tax.
State United States Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming District of Columbia Rate 9.8% 8.5% 6.3% 8.7% 9.9% 10.6% 8.6% 12.0% 9.6% 9.2% 9.1% 9.6% 9.4% 10.0% 9.5% 9.5% 9.7% 9.3% 8.2% 10.1% 10.0% 10.0% 9.7% 10.3% 8.7% 9.0% 8.7% 9.8% 7.5% 8.0% 12.2% 8.4% 12.1% 9.8% 9.5% 9.7% 8.7% 9.8% 10.1% 10.7% 8.1% 7.6% 7.6% 7.9% 9.7% 10.2% 9.1% 9.3% 9.4% 11.0% 7.8% 9.6% Rank (1 is highest) 40 50 38 14 6 39 3 23 31 32 22 28 13 25 24 19 30 42 9 12 11 21 7 36 34 35 15 49 44 1 41 2 16 26 18 37 17 10 5 43 48 47 45 20 8 33 29 27 4 46 Per Capita Taxes Paid $4,160 $2,967 $2,973 $3,140 $3,281 $4,910 $4,011 $7,256 $4,091 $3,897 $3,350 $4,399 $3,276 $4,596 $3,396 $3,688 $3,911 $3,059 $3,037 $3,832 $5,218 $5,316 $3,565 $4,651 $2,678 $3,425 $3,216 $3,960 $3,311 $3,765 $6,751 $2,997 $6,157 $3,583 $3,892 $3,652 $3,259 $3,761 $4,190 $4,647 $2,742 $3,042 $2,752 $3,197 $3,349 $4,181 $4,392 $4,408 $3,034 $4,427 $4,205 $6,076 Per Capita Income $42,539 $34,911 $46,841 $36,228 $33,238 $46,366 $46,716 $60,310 $42,688 $42,146 $36,738 $45,725 $34,973 $46,079 $35,767 $38,688 $40,302 $32,959 $37,109 $37,835 $52,130 $53,029 $36,880 $45,220 $30,689 $37,853 $36,784 $40,349 $44,241 $46,828 $55,303 $35,780 $51,055 $36,650 $41,088 $37,600 $37,464 $38,527 $41,672 $43,372 $33,954 $40,082 $36,157 $40,498 $34,596 $41,061 $48,210 $47,361 $32,299 $40,321 $53,931 $63,492

Support LB 976 Status: Revenue Committee AFP-Nebraska supports eliminating the state income tax on seniors retirement benefits. LB 976, introduced by Sen. Nordquist, is currently being held in the Revenue Committee. According to the Kaiser Foundation Nebraskans spend over $3 billion every year to provide health care services to seniors. With much of the funding for senior services coming from government, it makes more sense to let seniors keep their money rather than taxing their income to create more government programs. We believe individuals do a better job providing for themselves than government can; lets reduce the tax burden and make it easier for Nebraskas seniors. Oppose LB 357 Status: Sent to the Governor Sen. Ashford and the Unicameral voted to allow municipalities to raise the local sales tax. Simply put, this is a terrible idea. According to the Tax Foundation, Nebraska has the 15th highest state and local tax burden in the nation. That is higher than all of our neighboring states. Nebraskans already pay enough to fund state and local government. LB 357s half-cent increase would cost the typical family an extra $100 annually. Nebraska needs to lower the tax

burden to be more competitive with our peers and encourage families and small businesses to invest in our state. Support LB 745 Status: Sent to the Governor Omaha Mayor Jim Suttle proposed an Occupation Tax in 2010 that created immense controversy. Local governments can already unilaterally raise the local sales tax option by 1.5%, raise property taxes, raise wheel taxes, and raise other taxes and fees. Allowing local government to also institute an Occupation Tax just gives politicians too much taxing authority. It is also a major contributor to Nebraskas extremely high local property tax burden. Sen. Fischers LB 745 ensures the Occupation Tax would receive a vote of the people before new local taxes are imposed. Support LB 903 Status: Revenue Committee Taxing youth sports is Big Government at its worse. Seb, Cornetts LB 903 would exempt youth sports from the sales and use tax. It is absurd that state government would be taxing youth groups. It is counter-productive to tax youth sports in order to fund government programs that encourage youth sports, yet that is whats happening in Nebraska. For example, every year the state allocates hundreds of thousands of dollars through the Game and Parks Commission to award grants and funding for programs that serve youth, such as canoeing, the Cowboy Trail and the State Comprehensive Outdoor Recreation Plan. Why force families to pay taxes on youth sports to fund government programs that encourage youth to play sports? We fully support common-sense government we support LB 903.

Healthcare
Oppose LBs 835 and 838 Status: Banking, Commerce and Insurance Committee

To date Nebraska has received over $5.5 million from the federal Department of Health and Human Services to study implementation of a state health care exchange. Unfortunately, health care exchanges cannot operate effectively under the matrix of the Obama administration's health care law.

Much like pushing a square peg through a round hole, exchanges cannot offer market-based flexibility in a structure that is dominated by federal bureaucracy and government regulation. When simple decisions like the format of an exchange website require approval from D.C., it is clear that the federal government will run roughshod over the states. Passing an exchange is simply embracing the implementation of President Barack Obama's health care law. There are serious doubts as to whether the federal government will be ready to implement the Affordable Care Act by 2014 assuming the U.S. Supreme Court does not rule the law unconstitutional. According to the independent Congressional Budget Office the cost of the Presidents plan has doubled to over $1.6 trillion and individual premiums under the new law will be "27 percent to 30 percent higher." It would be a mistake for Nebraska to cooperate with such an expensive, anti-free market program.

Labor Reform
Support LB 867 Status: Sent to the Governor Sen. Karpiseks LB 867 would bring Lancaster Countys retirement match for government employees down from 150 percent to 100 percent. A 2011 study reported that government workers, on average, received 69% greater benefits than retirees in the private sector. The reason is that government employee pensions provide much greater employer contribution rates than are seen in the private sector. Nebraskas cities and counties are cash strapped because of the significant funding burden employee pensions place on budgets. A 1-to-1 match is common in the private sector and should be as well in government. Support LB 1170 - Status: Government, Military and Veterans Affairs Committee Sen. Mark Christensen introduced LB 1170, known as Paycheck Protection, legislation that institutes a firewall between union membership dues and political activities. According to the James Madison Institute, labor reform experts believe as much as 80 percent of union dues are spent on non-administrative related activity. And according to analysis by the Center for Responsive Politics, Big Labor gives more than 90% of its political support to only one political party.

Over 90% of union members are not Democrats, and certainly over 90% of union members will not vote for a purely Democrat ticket at local, state and federal elections. The basic premise of Paycheck Protection is to protect union members from funding political activities that they do not support.

Energy
Support LB 1161 Status: Final Reading Sen. Smiths LB 1161 allows for the state of Nebraska and the Department of Environmental Quality to proceed with pipeline route evaluation with the goal of building the Keystone XL pipeline through Nebraska while avoiding the original Sand Hills route.

Keystone XL v. Solyndra
Courtesy: Platte Institute for Economic Research

Keystone
Federal Loan Guarantees $0 Jobs Directly Created 13,000 Energy Created (annual megawatts) 138,700,000

Solyndra
$529 Million 1,100 Jobs Lost 300

Benefits of support the Keystone XL Pipeline include: 20,000 new jobs (13,000 construct ion & 7,000 associated manufacturing) $585 million in new tax revenue Keystone XL is safe newer technology, concrete barriers and thicker pipe There already is a pipeline going through Nebraska, the original Keystone Pipeline has been operational for years in Eastern Nebraska, without a spill Legislation already exists to protect Nebraskans; LB 629 was signed into law last session that holds TransCanada financially responsible for any damage Gasoline prices are projected to increase throughout the summer, potentially topping $5/gal and yet the Obama Administration refuses to build the Keystone XL Pipeline that will expand production and decrease energy costs. Nebraska must send a strong message by passing LB 1161 that we want to build the pipeline.