LINCOLN — State lawmakers gaveled in their 2012 session Wednesday at the State Capitol, a session that will see lingering concerns over budgetary issues and a showdown over how best to care for abused and neglected children.
For the first time in four years, state tax revenues are outpacing spending in state government, and there’s no need to slash spending.
But several senators expressed caution about whether Nebraska has more money to spend during the 60-day session, which will extend into April.
“This isn’t 2007, when we were flush and things looked good. We still have some challenges ahead,” said State Sen. Lavon Heideman of Elk Creek, who heads the Legislature’s budget-writing Appropriations Committee.
That means there may be some talk this year, but no action, on a top priority of the state’s business community: reducing state personal and corporate income taxes.
“It would be great to make a change in our income taxes,” said Omaha Sen. Steve Lathrop. “But we have to make sure we’re not providing a short-term tax break that we can’t afford in the future.”
On the first day of the session, lawmakers introduced 77 bills and one proposed constitutional amendment.
Proposals included those that would exempt tanning services from sales tax and prohibit commercial truckers from texting while driving.
The constitutional amendment would change term limits for state legislators from two consecutive, four-year terms to three terms.
Another bill would require public approval, via the ballot box, before a city could impose an occupation tax, like the restaurant and bar tax approved last year by the Omaha City Council.
Right now, cities can enact occupation taxes on hotel bills and restaurant tabs without voter approval unlike sales taxes leading to complaints that such taxes are “hidden.”
Valentine Sen. Deb Fischer said her Legislative Bill 745 would promote openness in government.
“Elected officials need to be more forthright with their constituents,” Fischer said.
Leading the list of priorities for 2012 will be addressing the state's troubled child welfare system, which despite a recent reform effort is costing more money and is not improving outcomes for abused and neglected children.
"The system's broken, and we have to fix it," said State Sen. Bob Krist of Omaha.
Senators are also planning at least a look at reducing individual and corporate income taxes and at relaxing legislative term limits.
Gov. Dave Heineman is promoting job creation as his top issue.
It's clear, however, that the struggling effort to privatize the state's care of 6,100 children who are state wards — a program begun by his administration — has also caught Heineman's attention.
The governor told reporters Tuesday that he has read the highly critical legislative report on the "Families Matter" program three times since it came out last month and has talked with the key players in the system, although he's not ready to say what possible changes he'll support.
"I want to continue those conversations before we come forward with a plan of action," Heineman said.
The Legislature's Health and Human Services Committee recommended a slate of sweeping changes, including returning the management of child welfare cases to state workers instead of private contractors, establishing a new Department of Children's Services and setting up a "Children's Commission" to develop a more coordinated plan.
Krist and several other senators said this is the year to turn the system around, though some lawmakers want to hear more about the nearly dozen bills expected on child welfare.
"I'm kind of leery about starting new agencies or committees," said Valentine Sen. Deb Fischer.
Norfolk Sen. Mike Flood, speaker of the Legislature, said the state budget is always at the top of the Legislature's priority list, and 2012 will be no exception.
He said the health of the state budget will influence an "honest discussion" about state income tax relief and whether or not the state's cash reserves have rebounded enough. That will compete with the child welfare issue, Flood said.
Scottsbluff Sen. John Harms, who sits on the budget-writing Appropriations Committee, said he wonders where the money will come from to address the child welfare woes, given the state's long-term budget outlook, which shows a $346 million budget gap looming in 2013.
"You can always fund something — it just depends on your priorities," Harms said. "But you might have to move it from somewhere else. Hopefully, we can find somewhere to trim back."
The year will bring more talk of allowing cities such as Omaha, through a public vote, to increase their sales tax by a half cent to deal with budget problems.
But Heineman promised, as he did last spring, to veto the proposal, calling it a tax increase.
"Omaha needs to do what state government has done: Tighten your belts," the governor said. "That's what Nebraska families and businesses have done."
The State of Nebraska levies a 5.5-cent sales tax. Cities currently can levy up to a 1.5-cent local sales tax, but Omaha Sen. Brad Ashford wants to allow a half-cent more.
Ashford said Tuesday he agrees with Heineman that now is the wrong time to increase taxes.
But the veteran Omaha senator said his sales tax proposal wouldn't be a tax increase, but rather an incentive for Nebraska's many governmental subdivisions to merge services and shift to fairer taxes, like sales taxes, and reduce fees or property taxes.
Ashford has been a longtime advocate of city-county government merger in the Omaha area. He said he plans to amend his half-cent sales tax bill to require cities seeking the extra tax revenue to lay out a plan for voters to create new efficiencies and reduce other taxes.
"It's not about raising taxes," he said. "It's primarily to promote efficiency in government, reduce spending and level out taxes."
One efficiency option in Omaha would be to spend the additional sales tax revenue to finance the $1.76 billion federally mandated reconstruction of the area's sewer system. That, he said, would reduce sewer fees.
"If a city doesn't have a plan, then the way I envision it, they can't put it up for a vote," Ashford said.
Contact the writer:
402-473-9584, paul.hammel@owh.com
Copyright ©2012 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
