"Historic" horseracing squeaks ahead; income taxes and prison construction discussed

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March 5, 2014 - 5:34pm

Nebraska lawmakers debated expanding gambling and education reform Wednesday. Meanwhile, behind-the-scenes maneuvering took place on cutting income taxes and expanding prisons.

Debate Wednesday was dominated by whether or not the state should expand betting at state racetracks by allowing so-called “historic” horseracing. Those are races that have already been run, displayed on video terminals without identifying where or when they were run.

Supporters say the proposed constitutional amendment would help preserve jobs in the ailing horseracing industry, and generate revenue for the state. Opponents say playing the video racing terminals, which show only a small portion of each race to make faster betting possible, is more like playing a slot machine than betting on a horserace.

Sen. Dave Bloomfield of Hoskins said he’s not necessarily opposed to expanded gambling. But he said this particular proposal is not honest. “Don’t bring me a slot machine and tell me it’s a horse. I’m not the brightest guy in the room. But I can tell the difference between a horse and a slot machine,” he declared.

Omaha Sen. Steve Lathrop said Nebraskans are already gambling in casinos, like those in Iowa. “They’re taking all of their Nebraska money and going across the river and spending it there,” Lathrop said. “I look at this bill as an opportunity to intercept some of those cars, to intercept some of those people and have them stay in the state if that’s the pastime they chose to engage in.”

Senators voted 25-18 for second-round approval. Sen. Ernie Chambers, who opposes the proposal, promised a filibuster on final reading, which would take 33 votes to overcome.

Earlier Wednesday, lawmakers gave second-round approval to a plan aimed at improving some of the state’s worst-performing schools. The proposal by York Sen. Greg Adams would give the State Board of Education authority to intervene in three schools, chosen based on test results, to try and turn them around.

“I’m trying to strike what I perceive to be a very delicate balance, between giving the state board and the commissioner the authority to and the flexibility to get into schools that are not up to speed and get ‘em turned around, and yet not going at it with a chainsaw,” Adams said.

Senators adopted an amendment Adams said could let the state board replace administrators of failing schools. Senators advanced the bill on a voice vote.

Behind the scenes, senators were considering what to do about income taxes. Omaha Sen. Burke Harr introduced a bill to cut income taxes, but when it was projected to reduce state revenues by more than $500 million over the next two years, he termed that unaffordable.

Wednesday, Harr discussed figures recently received from the Department of Revenue showing the cost of different options. They show that raising the amount of income that individuals could make before they’re bumped into the next income tax bracket -- by $4,000 for couples, for example -- would reduce state revenues by $87 million per year by 2020.

On the other hand, cutting taxes so the top rate declines from nearly 7 percent to six and a quarter percent, and other rates go down by the same percentage, would reduce revenues by $382 million.

Harr said that highlights choices senators have. “The question is where and how we want these tax breaks to go,” he said. “The governor talks about we want tax breaks for those making $60,000-120,000. We want to attract those type of jobs. And I think that’s exactly the right focus we should have.”

“If that’s the focus, then I think raising the tax brackets so it takes longer before you reach the top bracket probably would help those individuals the most,” Harr declared.

On the other hand, Harr noted, business groups want the top tax rate reduced. “If the issue is, do we want a top tax rate that’s lower so that those who do the recruiting see what our top tax rate is, lowering the top tax rate is a better way of doing it,” he said.

Harr said he’ll talk to other senators to see what they want to do. Sen. Galen Hadley, chairman of the Revenue Committee, said enacting any of the alternatives could cut into the state’s cash reserve or take away from other spending priorities.

Also Wednesday, Gov. Dave Heineman reacted to information from the Department of Correctional Services on possible prison construction projects. The department said a consultant has identified additions to the Lincoln Correctional Center, the Omaha Correctional Center, and the Lincoln Diagnostic and Evaluation Center as priorities.

Department spokeswoman Dawn Renee Smith said there are no cost estimates for the projects, and no decisions have been made. “We’re not saying that we should build,” she said. “We’re saying if that’s determined to be necessary, what would that look like?”

Heineman said that he is “strongly opposed” to building a new prison. The governor said no decision about prison construction should be made until the consultant finishes the report later this year, and lawmakers decide on a long-term strategy in consultation with the Council of State Governments.

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