The Nebraska Legislature wrapped up its work for the year this week. Lawmakers approved a budget that loosened the purse strings that were tightened in recent years, and took several major initiatives. But this session may be as notable for some things the senators did not do, as for what they did.
In his speech marking the end of the session, Governor Dave Heineman highlighted some major points of agreement between him and most senators. “We agreed on the most important funding issues, including a tuition freeze for the University of Nebraska and our state colleges, increased funding for K-12 education, special education and early childhood education, funding for a new central Nebraska veterans home and rebuilding the cash reserve,” Heineman said.
The budget approved by the Legislature spends $7.8 billion over the next two years, an average increase of just more than 5 percent per year, compared to 3 percent in the previous budget and one that shrank one percent before that. In the same speech, the governor pointed to one of the main points of disagreement: expanding Medicaid.
Expansion would benefit people with incomes below 138 percent of the federal poverty line: a couple with no kids, and income below $22,000, for example. An estimated 54,000 Nebraskans would have benefitted, with the federal government paying all the cost for three years, declining to 90 percent by 2020.
The governor argued even the state’s 10 percent share would cost hundreds of millions of dollars. And while most of the 49 senators appeared to support expansion, a sufficient minority opposed it in a filibuster that would have taken a two-thirds majority to overcome.
In his speech, Heineman applauded that resistance. “I want to personally thank the many senators who questioned the affordability and sustainability of expanding Medicaid, thereby protecting middle class families from a tax increase or reductions in the funding for their children’s education,” he said.
Supporters of expanding Medicaid held a kind of pep rally the day before Heineman’s speech. They argued the cost to the state budget would be far outweighed by what they estimated would be $423 million a year in federal money pumped into the state’s economy.
Lincoln Sen. Kathy Campbell argued the issue was not about numbers and money. “This is about the poorest of the poor. This is about working Nebraskans. This is about the man who waits too long for care, and faces cancer which is then far advanced,” she said. “These people and countless other Nebraskans deserve and will get our best work in the months ahead. And that’s what all the senators here pledge.”
Medicaid expansion is just one major issue senators will study between now and January. Another is how to prioritize and pay for water conservation projects which could cost $1 billion over the next 20 years. A third is a tax study. That is all that remains from another thing the Legislature decided not to do this year, which was to pass the governor’s proposal to abolish state income taxes.
Heineman proposed to make up for the loss of revenue by doing away with sales tax exemptions on everything from farmers’ seeds to manufacturing parts. The Revenue Committee killed the bill following strong opposition from ag and business groups.
Committee Chairman Sen. Galen Hadley of Kearney, who will head the tax study, promised a comprehensive look. “We’re going to look and see how property taxes, sales taxes and income taxes work together. Does that mean every single person in Nebraska’s going to have their tax burden lowered? No. But it’s possible that certain areas might have the tax burden lowered,” Hadley said. For example, “if we feel that property taxes have become too high, maybe we lower property taxes. But to make up revenue, we have to look to where we can get that,” he said.
Hadley suggested one area to look at would be taxes on services, like home repairs. There will undoubtedly be other ideas, and considerable disagreement, as the study progresses.
The Legislature also approved major changes in policies affecting young people. It reformed juvenile justice to emphasize treatment, rather than incarceration, and increased funding of services for young people and their families. Responding to a U.S. Supreme Court decision, it got rid of mandatory life sentences for those who commit murder before they turn 18, creating the possibility of parole after 20 years. And it offered medical and housing assistance to young people age 19 and 20 who “age out” of the foster care system.
For younger children, lawmakers increased early childhood education funding, raised income limits for subsidized child care, and moved toward a quality ranking system for child care providers.
One other thing the Legislature did not do is abolish the death penalty. With the return of Omaha Sen. Ernie Chambers the effort acquired new momentum. But on this issue, as with Medicaid, a filibuster by a determined minority prevented a straight up or down vote.
Some observers objected the Legislature was becoming gridlocked and dysfunctional like Congress. But Gretna Sen. John Murante, who supported abolishing the death penalty but not expanding Medicaid, said the filibuster is an appropriate tool. “I don’t see anything wrong with it. We have a one house legislature, and it should be more difficult to pass highly controversial bills,” he said.
Sen. Ken Haar of Malcolm said one other big thing the Legislature accomplished was approving tax incentives to lure big wind power projects to the state. And he added school funding to taxes and water projects as major areas to be studied.
But in words that might extend to other subjects as well, Haar cautioned against expecting magical solutions. “I don’t see in any of these three areas where it’s going to be a new car with a brand new paint job. It’ll be a fixer-upper,” Haar said.
The Legislature is schedule to reconvene, and start kicking the tires of more proposals, in January.