Center for Rural Affairs April 11, 2005 Nebraska Legislative Update

-- from the desk of Jon Bailey, Director Rural Research and Analysis Program
Center for Rural Affairs

Legislative Update
April 11, 2005

Budget Update: Medicaid

Medicaid – the federal/state health insurance program for low-income adults and children people with disabilities – took center stage in the Legislature last week. The Legislature undertook first round debate on LB 709, a bill that establishes an advisory committee to conduct public hearings and study the future of Medicaid in Nebraska. Sponsored by Sen. Erdman, the bill mandates a final report with policy recommendations for the Legislature to consider in 2006.

Medicaid is the second-largest portion of the state budget and the fast-growing. The Medicaid program is a federal-state partnership, with abut 60 percent of the program's funding coming from federal funds.

Supporters of LB 709 assert that unless something is done soon to control Medicaid costs, there will be little state funding left for other items in about 20 years at current spending patterns. Some Senators – notably Sen. Byars – stated that Medicaid should not be studied in a vacuum, that other aspects of health care finance should be studied and that ways to require employers to provide health care benefits to employees should be examined.

LB 709 was unanimously advanced to second round debate.

State Politics

The 2006 campaign began in earnest on April 11, 2005, when Governor Heineman took the first step in seeking election to the office by forming a campaign committee. In an interview with the Associated Press, Governor Heineman stated he would make his official campaign announcement later in 2005 or in early 2006. Heineman had received $5,000 in campaign contributions by April 5; once that figure is received, a campaign committee must be formed and filed with the Accountability and Disclosure Commission.

Third District Representative Tom Osborne has said he will make an announcement on his political future within the next couple of months.

Bills Update

Any bill designated a Priority Bill will also have a “P” attached to its number (for example, LB 123P). The chief sponsor of the bill is listed in parentheses.

The words Support or Oppose after a bill description indicate where the Center for Rural Affairs has taken a position on the bill. If neither word is indicated, the Center has not taken a position at this time.

NOTE: Once a bill is Indefinitely Postponed (killed) or signed into law, we will remove it from the Legislative Update list.

Rural Development

LB 28 (Connealy) – The “Endow Nebraska Act.” The bill would provide a tax credit for a contribution to a qualified charitable organization. The bill sits on Select File. Support

LB 273P (Cunningham) – Would create the “Building Entrepreneurial Communities” program through a grant program for each of the next two years. The bill remains on General File, though it is bracketed until April 19 and cannot be brought up for consideration before that date. Support

Agriculture/Livestock

LB 71P (Stuhr) – Would re-authorize the Agricultural Opportunities and Value-Added Partnership Act (formerly the LB 1348 grant program). This program was terminated through budget cuts in 2001 and 2002. This bill would reauthorize the program through 2009. Sen. Stuhr has designated this as her Priority Bill. The bill awaits a vote on Final Reading. Support

LB 132 (Cunningham) – This bill modifies the Nebraska Pasteurized Milk Law by providing exemptions to small-scale dairies and processors to the often-expensive bottling and processing requirements, and by allowing dairies and farmers to advertise on-farm sales of non-pasteurized milk (currently, the sale of non-pasteurized milk cannot be advertised). The bill sits on General File. Support

LB 346P (Agriculture Committee) – Would modify several provisions of the Beginning Farmer Tax Credit Act all with the goal to increase utilization of the tax credit. The bill sits on General File. Support

Education/Schools

LB 126P (Raikes) – Would mandate the “assimilation” of Class I schools (elementary-only schools) into K-12 school districts for the 2006-07 school year. The bill awaits action on Select File. Oppose.

LB 129P (Education Committee) – An overhaul of the formula for state aid to schools. The bill is pending in the Education Committee.

Taxes

LB 309 (Connealy) – Would establish the Small Business Rural Microenterprise Tax Credit. The bill would provide for $2 million worth of tax credits annually for small business (with five or fewer employees or beginning farmers/ranchers) in areas with declining population or low incomes or federal enterprise zones. The bill is pending in the Revenue Committee. Support

Business Tax Incentives

The Revenue Committee is still developing a bill to advance to the floor.

Other

LB 208 (Stuthman) – Provides for the appropriation of $1.75 million annually for the next two years to the state’s five federally qualified health clinics to provide services to the uninsured (the clinics are in Omaha, Lincoln and Scottsbluff). The bill is pending in the Appropriations Committee. Support

LB 550 (Jensen) – Requires a plan to be submitted by December 1, 2005, for the financial support of community health centers and emergency medical services in the state. The bill awaits action by the Health and Human Services Committee.