Sheehy on the trail to promote governor’s plan

The bitter cold winds blowing through Sidney ushered in Lt. Gov. Rick Sheehy yesterday when his plane landed at the Sidney Airport.

Sheehy stopped in Sidney to give an overview of the plans Gov. Dave Hieneman delivered during his State of the State address to Nebraskan residents Tuesday morning.

This stop was one of many on the Lt. Governor’s agenda, with the purpose of discussing proposals within the budget for the next two fiscal years as well as preparing citizens across Nebraska to take part in tax reform talks that will be taking place during the 2013 Legislative session.

“Since 2005, our administration and the Nebraska legislature have worked together to make a positive difference for Nebraskans.

“We have positioned Nebraska as a state making significant progress and we are going to continue that. Nebraska is a special place and our job is to ensure Nebraska is prosperous today and in the future. We are on the right path and that path starts in a quality education.”

The Lt. Gov. said education is among the state’s top priorities, claiming the administration and legislature understand that education is the great equalizer and in order for the state to continue in the right direction educating the youth and young adults are essential to growth and vitality.

Nebraska’s state government will show the citizens the esteem in which they hold education will be with an increase in state aid for Kindergarten to 12th grade from $852 million to $895 million during the 2014 fiscal year and then raise the aid to $939 million during the 2015 fiscal year. In addition there will be a proposed 5 percent increase in aid to special education within the same two years.

“Our students of today are the leaders of tomorrow. It is critical to our future that they have affordable access to a quality higher education.” Sheehy said. “Last week Gov. Hieneman, University of Nebraska President J.B. Milliken and Nebraska State College Chancellor Stan Carpenter announced that the University of Nebraska and Nebraska’s state colleges are prepared to implement a two year tuition freeze for Nebraska students if the budget is approved.”

If the budget is approved by May 20 then a recommendation for a freeze on tuition will be made by the University of Nebraska campuses of Omaha, Lincoln, Kearney and the University of Nebraska Medical Center as well as Chadron State, Wayne State and Peru State colleges.

According to Kory Gilbertson, of Radcliffe and Associates in Lincoln, the budget proposed by Gov. Heinemann will increase state aid to higher education institutions within Nebraska “by a little more than 4 percent for the next two years in exchange for the university and state colleges agreeing to freeze tuition,” for those years.

In other words, the state budget will aid in offsetting the cost to the higher education institutions participating in a tuition freeze within the state.

Sheehy said they are also proposing the same type of budget increase to include the six community colleges within Nebraska, in hopes those institutions will also adopt a tuition freeze.

Sheehy repeated “educating our students of today for the jobs of tomorrow is only half the formula for continued success.”

The other part of the solution for continued success is to create jobs within Nebraska that are enticing enough for people to both relocate to Nebraska as well as stay within the state.

“Working together with the legislature we passed the Nebraska Advantage, and it has been incredibly successful,” Sheehy said before continuing one of the most important aspects of Nebraska’s economy – Agriculture.

“Agriculture is an important part of our economy and agriculture remains relatively strong in Nebraska. We are second in cattle and feed, third in corn production, sixth in soybean production and the second leading ethanol production in the country.”

After boasting the agricultural numbers Sheehy dove into the demands in which he says the healthcare policy will have on the state and its next biennial budget.

“The state of Nebraska and every state in America is require by law to implement President Obama’s new federal health care law. The financial impact is enormous,” Sheehy said.

He stated the new healthcare law particulars will “cost more than $170 million dollars in federal and state funds over the next eight years to implement just the technology required by the new federal health care law.”

According to Sheehy, the more important cost of the new healthcare law that citizens should be aware of is the state will be burden with $72 million in the current budget to help grow the current Medicaid program.

Money Sheehy states that “should be going to state aid education or higher education.”

The last, but key issue, which prompted Sheehy’s visits across the state, is to discuss the tax reforms that will be taking place.

This is an issue according to Sheehy that has not been on the table since 1960, but is exceptionally pressing in this day and age as economic growth can make or break a state.

He began by saying, “Taxes in Nebraska are too high. Nebraska has good schools, affordable homes, a strong work ethic and a low unemployment rate, but taxes are too high in Nebraska. High taxes impede economic growth. High taxes aren’t attractive for entrepreneurial growth and high paying jobs.”

Sheehy quoted the Small Business and Entrepreneurial Council as saying Nebraska’s top personal income tax rate as being the 35th highest in America as of 2012, saying this rating is not beneficial to small business or small business growth within Nebraska.

“This is a burden on small businesses because 90 percent of small businesses pay taxes as an individual not as corporations. Our personal income tax rate is higher than every one of our neighboring states,” Sheehy said. “Additionally 23 states exempt a portion of or all retired military pay, but Nebraska does not, 43 states exempt a portion of or all social security income from taxation but Nebraska does not.

“According to the Tax Foundation Nebraska’s tax climate is 31st out of 50 states that is mediocre at best. We are not even in the top half of all states,” Sheehy said, following up by citing the ratings of the neighboring states; Wyoming and South Dakota being number 1 and 2 within this category.

Sheehy admitted the rankings are of some importance, but said it is truly about Nebraska’s future generations regarding economic growth through job security and creation of jobs that will keep people in Nebraska.

Sheehy proposed the questions of whether or not the citizens of Nebraska are willing to change the current business climate through tax code reform that makes the tax code “more modern, fairer and simpler,” moving Nebraska into a “top 10 business state.”

According to Sheehy a climate that would entice a wider variety of industry and career opportunities in Nebraska, in turn allowing for a better and stronger economic growth.

The solutions proposed an elimination of the “$5 billion sales tax exemptions.”

Sheehy said under the tax codes in Nebraska the state allows for more exemptions than collected within a fiscal year.

“Is that fair to our small businesses and working Nebraskans? Imagine if we eliminated just half of the current exemptions, what would that mean for our citizens? Nebraska wouldn’t need an individual income tax or corporate income tax,” Sheehy said. “Without the individual income tax or corporate income tax there would be no income tax on working Nebraskans. Social Security and military retirement income would no longer be taxed; there would be no tax on small businesses.”

In talks with some business leaders around the state, over the course of the past few months, Sheehy said the question was posed to them as to if they were willing to give up sales tax exemptions in an effort to eliminate or even lower the two taxes on the chopping block.

According to the Lt. Governor, business leaders were open to such discussion.

“They want simplicity and fairness; they want a modern tax code that rewards productivity, profits and job creation rather than having their lawyers and accountants spending time mining the tax codes for exemptions. Our tax system should not favor one industry over another.”

Sheehy said the state government recognizes that “change is not easy, especially when it involves taxes, but this is the discussion that our state needs to have.”

The discussion is pertinent to have due to changes both Nebraska and the world have seen economically and technology wise, Sheehy said.

But most importantly because it has been just over 50 years since Nebraska has reformed its tax laws and according to Sheehy it is time to update and modernize Nebraska’s tax codes to ensure economic growth and Nebraska’s ability to compete with the rest of America.

“Our tax reform proposal is revenue neutral and budget neutral,” Sheehy said. “We need a tax climate that rewards middle class families for their hard work.”

Revenue and budget neutral means the state government implements a taxing procedure that allows the state to bring in the same amount of money despite changes to the tax code.

“Legislation will be introduced that provides alternative options for eliminating many business sales taxes exemptions that could lead to the elimination of individual income tax and corporate income tax,” Sheehy said, “or at least lower Nebraska’s individual and corporate tax rates. This will provide a starting point for our discussions.”

Sheehy assured taxation of food will not be on the agenda of items to be taxed.

The state government recognizes and understands the discussions will be difficult, Sheehy said, but these talks are a necessity to Nebraska’s future.

“We welcome and look forward to your input. We are prepared to work with you and all Nebraskans that together we can develop a better tax system for Nebraska,” Sheehy said. “The choice is ours, this is about Nebraska’s future.”