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2016 LIBA Legislative Priorities

The following are the legislative priorities identified by the LIBA Board of Directors for the 2016 session of the Nebraska Unicameral:

Eliminate the Personal Property Tax on Nebraska Businesses. The Legislature’s efforts last year to reduce the personal property tax were a big first step. The implementation of LB 259’s reduction will result in an average of $162 in savings per personal property tax payer. But the complete elimination of the personal property tax is the important end goal. Although the 2015 number will be less as a result of LB 259, in 2014, Nebraska businesses paid more than $217 million in personal property taxes. The personal property tax not only costs businesses financially, but it is also very costly in terms of the time and effort necessary to complete and file the appropriate tax returns, which are filed individually in each county in which a business owns personal property. Many of Nebraska’s nearby states do not impose any tax on personal property, including Iowa, South Dakota, North Dakota, and Minnesota, and others nearby are working to phase such taxes out. Indeed, experts report that there has been a national trend to shift away from personal property taxes, including states like Kansas and Maine that are working to phase their personal property tax out. LIBA supports the elimination of the personal property tax and asks Nebraska legislators to look for ways to phase out this tax that directly impacts Nebraska’s existing and new businesses.

Protect Nebraska Public Entities from Unnecessary Penalties in the Affordable Care Act. As of 2018, employers, including public entities, that provide “Cadillac” health insurance plans will be required to pay a punitive tax to the federal government. In real terms, for example, the City of Lincoln has projected the punitive “Cadillac Tax” will result in a health insurance penalty to the city of more than $700,000 per year. The Nebraska legislature must address this major threat to public finances by adopting some statutory provision that prohibits public entities from providing health insurance benefits that will result in taxpayer dollars being used to pay a punitive tax to the federal government.

 Utilize ACT Testing to Better Assess the College Readiness of Nebraska High School Juniors.  Nebraska students are currently administered the NeSA test as juniors in high school. Administering tests to measure academic progress can be extremely helpful if done properly and effectively. Unfortunately, administering the NeSA test to high school juniors does not appear to be the best way to effectively measure our students’ educational attainment, particularly as compared to students from schools across the nation. The ACT provides a broad exam that is ubiquitously recognized as a way of measuring educational attainment and college readiness. Because of the widespread understanding of what a score on the ACT means, ACT scores provide a solid metric for assessing our education system. The pilot program that has allowed nearly all juniors in Lincoln Public Schools to take the ACT test has been a success because it has provided benchmarks for comparing schools in the LPS system with one another, while also providing a means of comparing LPS students’ performance with other students across the state and nation. Because of the pilot program, we are now able to report that the average ACT score for LPS students of 20.7 is lower than the national average score of 21.0, but the LPS college readiness rating of 29 percent is higher than the national average rating of 28 percent. We can also make a quick comparison of LPS to private schools and know that the LPS marks are both lower than the Lincoln Pius X average score of 24.3 and college readiness rating of 45 percent. Simply knowing these numbers allows us to determine where we are in our education efforts. If Nebraska high school juniors throughout the state were given the ACT exam in place of the NeSA exam we could better measure the college readiness of Nebraska students and determine how our educational efforts match up with other states. LIBA urges our lawmakers and the State Board of Education to work together to make the ACT a statewide metric to better measure our educational success and our students’ college readiness.

Adjust the State Aid Formula to Avoid Penalizing Schools for Reducing Their Levy. The formula which determines the amount of state aid Nebraska school districts are eligible to receive provides an incentive for school districts to maintain a maximum property tax levy, even in years in which property tax relief might be possible cialis in italien kaufen. For example, using the current TEEOSA formula, were Lincoln Public Schools to levy at less than the statutory maximum, state aid funding in future years would be jeopardized. LPS officials have told us that even a minor reduction in the LPS levy from $1.05 to $1.035 – a one-and-a-half-cent reduction – would result in a loss of about $325,000 in state aid. Providing districts with leeway to reduce their levy without the threat of lost funding would benefit tax payers, and LIBA asks that our legislators consider such a proposal to help address the serious issue of statewide property tax relief.

Reduce or Eliminate Unfunded Mandates. State law directly dictates many functions of county government and further requires the provision of certain state services on the county level. Even so, the state does not pay for counties to carry out many of these requirements. The practice of requiring counties to perform state-mandated functions without any financial assistant from the state is directly responsible for Nebraska counties’ heavy reliance on property taxes. According to Lancaster County officials, taxpayers annually fund through property taxes more than $21 million worth of state-mandated services, including such expenses as nearly half-a-million dollars to house and support state probation services. Policy requiring that state-mandated programs be funded by state revenue, rather than by county property taxes, will work to provide consistency in county fiscal budgeting and will help relieve the burden of property taxes on Nebraskans.

Close Nebraska Defined Benefit Pension Plans and Move New Employees to Defined Contribution Plans. Nebraska’s defined benefit pension programs at all levels have accumulated more than $1.8 billion in unfunded liability. This is an unacceptable risk for Nebraska’s taxpayers and Nebraska employees who depend on these funds for their retirement. It is time for Nebraska’s policy makers to address the issue by working to find ways to place employees on defined contribution plans, shifting the risks of economic returns away from the taxpayers.

Require Earmarked Roads Funding Be Spent On Roads. In recent years, some municipalities have begun to spend tax revenues earmarked for the repair and construction of roads – such as gas tax revenue and Build Nebraska Act dollars – on related, but ultimately nonequivalent infrastructure projects like bike paths and sidewalks. For example, the City of Lincoln’s Capital Improvement Plan 2014-2020 (CIP) acknowledges the need for about $3 million worth of funding for repairs and maintenance to city sidewalks in 2016-2017. In the CIP, the City has identified about $1 million of funding to complete those repairs. The $1 million of identified funding is comprised entirely of “State Highway Allocation Funds,” which are state sales and fuel tax proceeds diverted to the City for roads projects. While trails and sidewalks are noteworthy amenities, roads are the critical infrastructure that connects our state and allows us to complete our day-to-day activities. LIBA asks for a renewed emphasis on building and maintaining Nebraska’s roads, and urges Nebraska’s legislators to work to ensure that funds earmarked for road construction and repair are actually spent on traffic-carrying roads.