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28.02.2017 13:10    Comments: 0    Categories: Chamber News      Tags: eggs n issues  

Eggs N IssuesSenator Matt Williams spoke to over 40 constituents at the Cozad Generation Center during the only Egg N Issues of this legislative session.

He said this session has been overshadowed by a significant revenue shortfall totaling $910 million. The interim budget already cut $135 million from the budget, with about $750 million left to cut. They are in the process of creating the new biennial budget for the next 2 years.

At the end of last year, the budget was balanced with a surplus of $5-6 million dollars for their ‘rainy day’ fund but it didn't take long to find out that the state’s revenues were dropping fast.
Part of the shortfall was due to commodity markets and farmers making less money which means less income coming into the state. Part of it is due to the poor recovery from the economic crisis of 2008-2009 of which the national and state economy has never fully recovered.

We are fortunate to have a constitutional requirement to have balanced budget in our state.

The budget cuts would lead to no new spending on government programs and a reduction in funds to programs and groups that were expecting funding, he said.
Senator Williams shared that the first 30 days of the session had been spent by debating rules and rules change concerning whether or not senators want to change the 33 vote threshold to end debate on a filibuster.
Two protected areas in Governor Pete Rickett's budget proposal that would not be cut or at least not by much, are funding for K - 12 education via state aid and funding for the Department of Corrections, which is seeking to reduce prison overcrowding.

Out of 13 schools in the district, Lexington is the only school district receiving equalization aid. Senator Williams believes that their legislative commitment is to the states education but he feels the state is woefully behind in what the state does to contribute to education.

We still have significant over crowding in our prisons system which is improving slightly due to LB 605, which requires non-violent felons to go through probation and drug court if needed. Legislature was able to put around $2.5 million back into the budget due to the savings coming from sentencing non-violent felons to probation and drug court rather than sending then to corrections.
University of Nebraska and HHS will have programs trimmed.

Historically, the legislature likes to have a 3 legged tax stool in our state, meaning 1/3 of our tax would come from income tax, 1/3 from sales tax and 1/3 from property tax, however, over the last 10-12 years that has shifted. 45% of the total taxes now are reliant on property tax, with sales and income tax much less.

One of the political realities that they are dealing with to fix this, is a group that is unwilling to consider anything that could be looked at as a new tax. The dilemma is if you have a revenue shortfall and you can’t look at new forms of taxation, how do you fix it and reduce property taxes.

Some argue changes in sales tax are not really a tax increase if those increase revenue dollars that come from that go to offset another tax. The Governor has two proposals, LB337 and LB338.

The income tax proposal closes some of the rate gaps and creates a system of phasing in a reduction in the rates over time, based on future economic triggers.

The state is being pushed really hard to become more competitive. The state chamber and other organizations believe that our level of income tax, in particular the corporate income tax, makes us somewhat non-competitive in bringing new people in. Senator Williams felt that property tax was more of an issue than income tax and the constituents present at the meeting were in agreement with him.

He shared that he has not had a constituent complain to him about state income tax. Property tax is the biggest concern.
The Governor’s property tax proposal, which changes how ag property is valued, by valuing it on an income production basis. If it were phased in now it would decrease the property value by 2% which would be barely noticeable. Senator Williams does not think that is enough and feels we need to fight hard for a larger reduction and better system with the property tax situation.

The revenue committee heard two proposals on the sales tax issue last week. Senator Williams feels that those proposals will be fought hard by the governor and the legislative representatives whose districts have lower income and less owned property.
One proposal will remove some of the exemptions from sales tax, primarily in the service area, and the other proposal is a 1% increase in sales tax. Both take a portion of the revenue generated and build a voucher system for low income people but the balance goes directly to real estate tax reduction.
An organization gaining momentum that includes Dawson Area Development, many of the education associations in the state, along with Farm Bureau, Farmers Union, Independent Cattleman's Assoc., etc. are linking up and recognizing that the issue isn’t cutting and reducing the quality of education; the issue becomes how to fund education properly and fairly in Nebraska, said Senator Williams.

“When we look at taxes, the one sure way of improving our situation is finding ways to grow our state. So committing our time and efforts to economic development activities builds people, builds jobs, and it builds revenue. We have seen a lot of that in Dawson County over the last few years. We have not seen that universally across the state at the same level,” shared Williams.

There were proposals in front of the legislature last week that Senator Williams felt would hamper our economic growth and would restrict our ability to use tax increment financing in ways our communities have traditionally been able to use it with success. There was very little support for the last three. However,  Senator William asked the constituents to be vigilant so ‘we won’t lose tools that would help us to remain competitive in growing our communities and state.’
The main stumbling block that is keeping us from creating economic development is a lack of affordable workforce housing, said Williams.

Senator Williams said his bill, LB 518, would seek to address the need for affordable housing in rural areas.

His bill would propose the establishment of an affordable housing trust fund, which would have access to $10 million. This money could be awarded via grants, which could then be invested into workforce housing, as long as the grant recipient could match the grant funds dollar for dollar.

The funds could be only be used in rural areas (pop. under 100,000) for housing  and could be used by the economic development, to buy land for housing, rehab of existing housing, rental units, loan guarantee, help people with downpayment grants and more. He is hoping that this proposal will move forward to address this issue and spread awareness of the housing shortage in rural areas.

Those present at Eggs N Issues expressed their sincere appreciation to Senator Williams for representing his district so well and his dedication to the issues that are important to our district.


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