Taxpayers Legislative Agenda

7/28/2019 Taxpayers Legislative Agenda

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Taxpayers Legislative Agenda

2013


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www.afpnebraska.com

SpendingThe Unicameral has not yet seta biennial budget for 2013-15.However, the AppropriationsCommittee has released a

preliminary budget documentthat provides insight into whatthe final budget document maylook like. In fiscal year

2013/2014 state spending isprojected to grow by 4.8%over the previous year and by FY 2014/15 spending will have grown another 4.8%.

Remarkably, a 4.8% annual increase in spending is significantly lower than the pre-session estimate of 6.7% in FY13/14 and is slightly lower than the Governorsrecommendation of 5.1%. However, the Governors recommendation for FY14/15is lower than the Appropriations Committees preliminary 4.8% increase. Thus,the Appropriations Committees biennial budget remains comparable in its level of

spending as the Governors recommended budget, yet still remains smaller than thepre-session biennial estimate.

In sum, state spending is growing at an alarming rate. In the current yearNebraskas General Fund is $3.6 billion. By next year spending will increase to$3.8 billion and in four years state spending is projected to grow to $4.4 billion, a21% increase over current spending rates.

By comparison, the current rate of inflation is 2% and the ten-year average inflation

rate is 2.47%. The increase in state spending is significantly outpacing inflation,as well as population growth. The Nebraska Department of EconomicDevelopment projects our state population to grow by less than 0.8% by the end ofthe decade. State government spending, in order to keep pace with inflation and

population growth, would still be significantly less than annual increases of 4.8%.

Nebraska state government is simply spending too much, too quickly.

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92-1993

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93-1994

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94-1995

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95-1996

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96-1997

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97-1998

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98-1999

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99-2000

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00-2001

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01-2002

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02-2003

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03-2004

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04-2005

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05-2006

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06-2007

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07-2008

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08-2009

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09-2010

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10-2011

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11-2012

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12-2013

State Spending(in billions)


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A-Bills and Prioritized LegislationAppropriations bills (A-Bills) are any piece of legislation that will requireadditional spending to implement.

During last years short session, twenty-six A-Bills were introduced with a cost of$11,210,986. This year we do not yet have a full listing of all A-Bills, but of the 79legislative bills prioritized by either a state senator or legislative committee thetotal General Fund cost in FY13/14 is $74.5 million.

For example, LB 366 prioritized by Sen. Cook would duplicate programs alreadyoffered by federal, state and local governments and provide adult GED programs ata cost of over $2 million annually. And LB 553, prioritized by the RetirementCommittee, would increase the states contribution rate to government pensions

and cost taxpayers $16.8 million annually.

TaxesSupport LB 613 Select File

One of AFP-Nebraskas top priorities this legislative session was passing theGovernors tax reform package (Sen. McCoys LB 405). The package includedthree components: eliminate the individual state income tax, eliminate the corporateincome tax and widen the sales tax base.

AFP-Nebraska testified in support of this plan and we continue to be a strongproponent of tax reform. We also readily admitted that LB 405, as introduced,would need to be significantly amended in order to be the best tax policy.

Instead of amending LB 405 the Revenue Committee, at the request of the billssponsor and the Governor, killed LB 405 and turned its focus to LB 613. Thislegislation creates a tax modernization committee that will evaluate Nebraskascurrent tax code, and with the help of public input during the interim, will makerecommendations for tax reform during the 2014 legislative session.

AFP-Nebraska will continue advocating for either eliminating or greatly reducingour state income tax burden. States with low to non-existent personal andcorporate income tax burdens consistently out-perform states, like Nebraska, with ahigh tax burden.


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Low tax states routinely post greater Gross StateProduct Growth, Population Growth, State andLocal Tax Revenue Growth and Income Growththan states like Nebraska with a high tax burden.Eliminating Nebraskas personal and corporate

income tax will position our state to compete fornew economic investment and good-paying

jobs. Eliminating the personal income tax willalso create a median increase of $1,051 for

Nebraska families.

Support LB 266 Status: Revenue Committee

Last year the Unicameral voted to override Gov.Heinemans veto and allow municipalities to

raise the local sales tax. This year Sen.Chambers has introduced LB 266 to undo thissales tax increase and return the top rate to 7%instead of 7.5%.

According to the Tax Foundation, Nebraska hasthe 15th highest state and local tax burden in thenation. That is higher than all of ourneighboring states.

Nebraskans already pay enough to fund stateand local government. The current half-centincrease costs the typical family an extra $100annually. Nebraska needs to lower the tax

burden to be more competitive with our peersand encourage families and small businesses toinvest in our state. We support Sen. Chamberseffort to repeal the sales tax hike.

Support LB 474 Status: Revenue Committee

Occupation taxes across Nebraska have become a way for local government to ineffect increase the local sales tax rate. Occupation taxes have simply been lumpedon top of the state and local sales tax and have been targeted to raise general funddollars for local governments; this also is the purpose of the local option sales tax,not the occupation tax.

State-Local Tax Burdens, All States

State Rate

Rank

(1 is

highest)

Local

Per

Capita

Taxes

Paid

Per

Capita

Income

United States 9.8% $4,160 $42,539Alabama 8.5% 40 $2,967 $34,911

Alaska 6.3% 50 $2,973 $46,841Arizona 8.7% 38 $3,140 $36,228

Arkansas 9.9% 14 $3,281 $33,238

California 10.6% 6 $4,910 $46,366

Colorado 8.6% 39 $4,011 $46,716

Connecticut 12.0% 3 $7,256 $60,310Delaware 9.6% 23 $4,091 $42,688

Florida 9.2% 31 $3,897 $42,146Georgia 9.1% 32 $3,350 $36,738

Hawaii 9.6% 22 $4,399 $45,725Idaho 9.4% 28 $3,276 $34,973Illinois 10.0% 13 $4,596 $46,079

Indiana 9.5% 25 $3,396 $35,767Iowa 9.5% 24 $3,688 $38,688

Kansas 9.7% 19 $3,911 $40,302Kentucky 9.3% 30 $3,059 $32,959

Louisiana 8.2% 42 $3,037 $37,109Maine 10.1% 9 $3,832 $37,835

Maryland 10.0% 12 $5,218 $52,130Massachusetts 10.0% 11 $5,316 $53,029Michigan 9.7% 21 $3,565 $36,880

Minnesota 10.3% 7 $4,651 $45,220Mississippi 8.7% 36 $2,678 $30,689

Missouri 9.0% 34 $3,425 $37,853Montana 8.7% 35 $3,216 $36,784

Nebraska 9.8% 15 $3,960 $40,349

Nevada 7.5% 49 $3,311 $44,241New

Hampshire 8.0% 44 $3,765 $46,828

New Jersey 12.2% 1 $6,751 $55,303New Mexico 8.4% 41 $2,997 $35,780

New York 12.1% 2 $6,157 $51,055NorthCarolina 9.8% 16 $3,583 $36,650

North Dakota 9.5% 26 $3,892 $41,088Ohio 9.7% 18 $3,652 $37,600Oklahoma 8.7% 37 $3,259 $37,464

Oregon 9.8% 17 $3,761 $38,527

Pennsylvania 10.1% 10 $4,190 $41,672Rhode Island 10.7% 5 $4,647 $43,372SouthCarolina 8.1% 43 $2,742 $33,954

South Dakota 7.6% 48 $3,042 $40,082Tennessee 7.6% 47 $2,752 $36,157

Texas 7.9% 45 $3,197 $40,498Utah 9.7% 20 $3,349 $34,596Vermont 10.2% 8 $4,181 $41,061

Virginia 9.1% 33 $4,392 $48,210Washington 9.3% 29 $4,408 $47,361

West Virginia 9.4% 27 $3,034 $32,299Wisconsin 11.0% 4 $4,427 $40,321

Wyoming 7.8% 46 $4,205 $53,931District ofColumbia 9.6% $6,076 $63,492


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Sen. Krists LB 474 would prohibit local government from merely tacking on theoccupation tax on top of the sales tax, as well as prohibit using the occupation taxas a sin tax on alcohol or tobacco.

Oppose LB 104 Status: General FineSen. Lathrops LB 104 would spend over $5 million of taxpayer money annually tofund tax incentives for green energy programs that simply do not work. Handingover taxpayer money to fund energy companies who have a questionable trackrecord creating jobs is a bad investment for Nebraska.

Green companies which received federal stimulus money and went bankrupt: A123, received $249 million in DOE grants Abound Solar, $400 million in stimulus loans Beacon Power, $43 million in DOE loans Ener1, $118.6 million in stimulus grants Solyndra, $535 million in DOE loans

Oppose LB 439 Status: Revenue Committee

This bill would increase the cigarette tax by 120% and tax on other tobaccoproducts by 55%. Local occupation taxes, such as Omahas occupation tax ontobacco products would be in addition to this massive tax hike.

Increasing the tobacco tax by 120% is treating smokers as a cash cow for morerevenue for government to spend. Tobacco users already pay a significant tax

burden. In 2012 Nebraskans paid $233 million in state and federal taxes oncigarettes. In fact of the average cost of $6.30 for a pack of cigarettes, the actual

product cost is $2.84 and the government tax burden is $3.46. Roughly 55% of thecost of a pack of cigarettes is paid in taxes. Increasing that burden and singling outa group of Americans for participating in a legal activity is overkill.

HealthcareOppose LB 577 Status: General File

We are opposed to Sen. Campbells LB 577, legislation to adopt Medicaidexpansion, for the simple reason that we cannot afford it.

Medicaid expansion would cost the federal government $930 billion from 2014 to2022. It is unknown how the federal government can fund nearly $1 trillion inadditional spending without gradually shifting those costs onto the states.


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The cost of Medicaid expansion in Nebraska would be devastating to our state

budget. Gov. Heineman estimates that Medicaid expansion would cost Nebraska asmuch as $766 million over 10 years. Andif the federal government does reduce the

federal Medicaid match that number couldgo up dramatically.

One of the key components of ObamaCareis the vast expansion of the Medicaid

program, which cannot be done unlessstates voluntarily participate.

The federal government is out in force

pleading with states to cooperate byoffering to fund 100% of the costs forMedicaid expansion for the first threeyears. After that the states will be askedto take on a percentage of the cost.

While promises of federal funds forMedicaid expansion are made today, thatis no guarantee of funding in the future.

In 2011 President Obama proposed $72billion in Medicaid cuts and reducing thefederal support of state Medicaid costs by$15 billion. In 2012 the President again

proposed cutting $70 billion fromMedicaid by revising the federal match tostate Medicaid programs. And the WhiteHouse 2013 budget proposes to cut $351

billion from entitlement programs over 10 years.

When the federal government is forced to confront its spending problem; whetherduring the debt limit crisis of 2011, the fiscal cliff crisis of 2012 or thesequestration crisis of 2013 entitlement programs the Medicaid program isroutinely scrutinized for cost savings.

Cash Reserve Historical Chart

Fiscal Yr

Beginning

Balance

Ending

Balance

Balance as% of

revenues

FY1983-84 0 37,046,760 4.7%

FY1984-85 37,046,760 35,574,209 4.5%

FY1985-86 35,574,209 22,302,064 2.7%

FY1986-87 22,302,064 23,730,085 2.7%

FY1987-88 23,730,085 17,684,929 1.7%

FY1988-89 17,684,929 50,423,929 4.4%

FY1989-90 50,423,929 40,037,043 3.5%

FY1990-91 40,037,043 31,937,043 2.3%

FY1991-92 31,937,043 26,937,043 1.8%

FY1992-93 26,937,043 17,437,043 1.1%

FY1993-94 17,437,043 27,750,505 1.7%

FY1994-95 27,750,505 20,481,804 1.2%

FY1995-96 20,481,804 18,189,565 1.0%

FY1996-97 18,189,565 40,962,684 2.0%

FY1997-98 40,962,684 132,583,702 6.3%

FY1998-99 132,583,702 145,700,124 6.9%

FY1999-00 145,700,124 142,159,429 5.9%

FY2000-01 142,159,429 170,236,099 6.9%

FY2001-02 170,236,099 110,066,099 4.7%

FY2002-03 110,066,099 59,142,545 2.4%

FY2003-04 59,142,545 87,028,337 3.2%

FY2004-05 87,028,337 177,167,720 5.8%

FY2005-06 177,167,720 273,616,790 8.2%

FY2006-07 273,616,790 516,087,791 15.1%

FY2007-08 516,087,791 545,545,797 15.6%

FY2008-09 545,545,797 578,191,863 17.2%

FY2009-10 578,191,863 467,201,626 14.6%

FY2010-11 467,201,626 313,201,626 8.9%

FY2011-12

est 313,201,626 434,058,718 11.9%

FY2012-13

est 434,058,718 341,208,718 9.0%

FY2013-14

est 341,208,718 341,208,718 8.8%

FY2014-15

est 341,208,718 341,208,718 8.5%


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Current entitlement spending is unsustainable and expanding the Medicaid programas allowed by President Obamas health care law and proposed by LB 577 wouldonly put the program at greater risk.

Support LB 564- Status: Judiciary Committee

President Obamas federal health care law not only costs over $2 trillion inunfunded government spending, it violates the constitutional right to freedom ofconscience.

Sen. John Nelsons LB 564, the Health Care Freedom of Conscience Actguarantees individuals and institutions within the state of Nebraska the right todecline participation in health care functions which violate their respectiveconsciences.

The federal government does not have the right to demand individuals orinstitutions violate their most deeply held personal beliefs; yet multiple mandates inthe Affordable Care Act, known as ObamaCare, forces participation in health care

programs that violate their beliefs. Passage of the Health Care Freedom ofConscience Act is a strong protection against federal government overreach.

Education ReformSupport LB 14 Status: Revenue Committee

Sen. Krists LB 14 makes private and parochial education more affordable for

every family without using government spending.

Nebraskas children deserve to receive the very best education. LB 14 providessignificant incentives for private financial contributions to make private and

parochial schools more affordable for families who choose to attend those schools.

Every student deserves to go to the school of their choice and LB 14 makes thatmore affordable by providing tax incentives for private philanthropy for privateeducation tuition support.

Support LB 470 - Status: General File

Sen. Scheers LB 470 provides important tools to ensure that administrative

expenses in our public schools are easy to find, easy to understand and easy to

track. While administrative expenses are a necessary function of operating a school

district, each dollar spent outside of the classroom deserves maximum scrutiny.


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There is a need for greater transparency. Consider for a moment the incredibly

generous compensation packages offered to a few public school administrators in

Nebraska:

Salary Comparisons

Superintendent of Fillmore Central Public Schools $143,804

Superintendent of Dundy County Stratton Public Schools $175,393

Superintendent of Lincoln Public Schools $267,394

Superintendent of Omaha Public Schools $306,091

Salary of Average Nebraska Teacher $39,456

Salary of Governor of Nebraska $105,000While administrative positions are necessary to the success of our schools; it is

important the public has easy access to the financial data to ensure each dollar is

well spent.

Oppose LB 512 - Status: Education Committee

Sen. Scheers LB 512 would allow the State Board of Education to adopt thecommon core standards in particular subject areas Common Core is anationalized standard for K-12 curriculum.

Local public schools would lose their relevancy if standardized curriculum andacademic instruction are to be adopted in Nebraska. Local control is what makesour public school systems the best in the nation; Nebraska encourages localcommunity and family involvement in our schools and in the formation of ourcurriculum.

Nationalizing the curriculum and giving responsibility for the formation ofacademic instruction to bureaucrats in Washington, D.C. runs counter to the valueswhich make Nebraskas K-12 system one of the highest performing in the nation.

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Taxpayers Legislative Agenda