Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to

Tuesday, April 26, 2005

Center for Rural Affairs April 25, 2005 NE Legislative Update

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

Legislative Update
April 25, 2005

Budget Update

As expected, the budget to be officially released later this week by the Appropriations Committee will result in a political and financial tug-of-war that will dominate the remainder of the 2005 session.

Simple math shows the magnitude of the debate:

$22 million = apparently the amount of money available in the next two years for spending not in the Appropriations Committee budget

$91 million = the price tag for bills on the floor of the Legislature with at least a chance of becoming law

$32 million = the potential cost of the business tax incentive package being put together by the Revenue Committee

Obviously, the business tax incentive reform package could eat up all of the available funding slack left by the Appropriations Committee budget.

The budget process and debate is also complicated some by the meeting of the Economic Forecasting Board on April 29. At that meeting the Forecasting Board will provide their final revenue receipt numbers, which could be higher or lower than those used by the Appropriations Committee in fashioning their budget; if significantly different than the Appropriations Committee numbers, new revenue forecasts could change the tenor and intensity of the budget debate – more funds to accommodate more spending requests or even less money to compete for.

Governor Heineman has made it clear he wants an economic development bill that reforms the business tax incentive programs passed this year. The Revenue Committee also apparently wants something, but so far has been unable to advance a consensus bill out of committee. It seems the primary issue in the committee – besides the cost – is the support of the business community. Sen. Landis, chair of the Revenue Committee, has said he will not move forward with the tax incentive package unless the business community supports it.

Add to all of this opposition by some Senators to any increased spending for the business tax incentive package, particularly if funding for it comes at the expense of programs for vulnerable populations. In a debate on April 25 over a bill to increase the documentary stamp tax to fund housing for the mentally ill, Sen. Beutler, a member of the Appropriations Committee, warned that funding for the tax incentive package would come excessive cuts in the state budget (made up by increased local property tax), cutting state funding to higher education or higher state taxes.

In response, Sen. Chambers said any legislation that provides tax breaks for the wealthy while denying funding for programs for the poor would have to pass “not over my dead body, but over my live, determined opposition.”

Bills Update

Again, no action was taken last week on any of the bills listed below.

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


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


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.


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


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. The Appropriations Committee budget adds $875,000 to compensate the federally qualified health clinics for the increase in services provided uninsured patients. 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.


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