LB 401 (1997)
May 29, 1997
SENATOR WILL: Any objection to passing over 752A? Seeing none, so ordered, 752A is passed over. That brings its to LB 401. Mr. Clerk.
CLERK: Mr. President, 401. Senator Bruning, first item I have are Enrollment and Review amendments, Senator.
SENATOR WILL: Senator Bruning.
SENATOR BRUNING: Mr. President, I move to adopt the E R amendments for LB 401.
SENATOR WILL: You've heard the motion to adopt the E R amendments. All those in favor say aye. Opposed no. The E & R amendments to 401 are adopted.
CLERK: Mr. President, Senator Robak has the next amendment. I've been instructed that Senator Robak ... Senator Schimek is going to be handling this for Senator Robak, and there's a request, Mr. President, to withdraw AM1727 and substitute therefore AM2250.
SENATOR WILL: Is there an objection to the substitution? Seeing none, Senator Schimek, to open on the substituted amendment. (See page 2041 of the Legislative Journal.)
SENATOR SCHIMEK: Thank you, Mr. President and members of the body. I'm certain that you probably remember this issue from the day that Senator Robak introduced it. And what this substitute amendment does is it really limits the provisions of this amendment to federal civilian employees only. And let me just refresh your memory a minute. Federal tax returns allow social security recipients to exempt part of their social security income, depending on their other income. And folks who receive a federal civilian pension are taxed on the entire amount of that pension. These two scenarios affect the state income tax obligation, because our state return is based on the federal adjusted gross income. Obviously we can't change the federal law to exempt a portion of federal civilian pensions from federal taxation as the social security benefits are exempted. So this amendment would simply allow federal civilian retirees living in Nebraska to exempt part of their federal civilian pension from state income tax, using the same formula as social security recipients use for federal tax computation. And I ... for those of you who have been in the body, I'm sure that you remember that Senator Hall introduced this bill a number of times. The concept has been heard by the Revenue Committee on it number of occasions. And I don't know about you, but I've had it number of calls over the years on this issue. This particular provision, or this particular approach has been used in other states. And the information that Senator Robak's office provided me says that 38 states make some allowance for federal pensions or senior age status. Eleven states, including Kansas, to our south, exempt the total amount of civil service annuities. Under this amendment federal retirees would not be able to file for this exemption until the year that he or she is 65 years of age, and that would occur on the first day of the calendar year. I should note that federal programs, in case you don't know or don't remember the discussion from earlier, federal programs were in lieu of social security. Now on fixed income some of these folks can't take an exemption for even a portion of their income attributed to their federal employment. I guess, with that, because we have discussed this issue a little bit, I would stop there and be happy to try to answer any questions that you might have.
SENATOR WILL: Thank you, Senator Schimek. You've heard the
opening on the Schimek amendment to the bill. Senator Chambers, your light is on from the last bill. Do you wish to address the Schimek amendment?
SENATOR CHAMBERS: Mr. President, members of the Legislature, when Senator Robak brought this amendment to my attention and asked me would I support it, I told her that I would. And I was talking to Senator Schimek, but I want to be crystal clear on what the amendment is that's before us now, 'cause I understand there was a substitution, or maybe I misunderstood. But, Senator Schimek, could you tell me what this amendment will do.
SENATOR WILL: Senator Schimek, would you respond?
SENATOR SCHIMEK: Yes, there was.... Yes, Senator Chambers, there was a substitute amendment, and it differs from the original amendment that Senator Robak introduced in that this just refers to federal civilian employees rather than military and civilian employees.
SENATOR CHAMBERS: And how many employees, does anybody have an idea, would be involved, roughly even?
SENATOR SCHIMEK: I don't have that information at my fingertips, I will try to see if staff has it.
SENATOR CHAMBERS: Okay. But what is being done for these employees under the amendment?
SENATOR SCHIMEK: What it would do, it will allow them to be treated similarly to social security benefits, in that it would exempt their civil pensions from state income for state income tax purposes.
SENATOR CHAMBERS: Thank you, Senator Schimek. I'm going to support the amendment. But if those people don't get any more for their ... from their benefits than I'm going to get on my social security, it's not even worth the effort. Senator Schimek, I get ... when you get my age, they will have sent you, something from the government telling you what you'll get when you start claiming social security. And I think it's designed to make you have a stroke or a heart attack, because you've been
paying money in all these years (laugh). Senator Tyson, if you can get 11 cents a pound for aluminum cans, and a pound ... to get a pound of aluminum cans you could fill up this whole Chamber and you might have about three pounds. So if you could get 11 cents a pound for aluminum cans, I could buy about ten pounds of aluminum cans with what I'm going to get per month from my social security. Oh, 15 cents a pound, oh 50 cents. Then I could buy about a pound and a half.. But just because I am in such dastardly straits, I am not of a mind to see other people similarly situated. I doubt that that much money is going to be involved if we adopt this amendment. I'm not aware of enough facts, relative to the numbers of people or actually the dollar amounts that would not come to the state that currently are coming. But let me ask Senator Schimek this question, and I believe I know the answer. Senator Schimek, these would all be retirees?
SENATOR SCHIMEK: That is correct, they would be ages 65 and over. And I do have a little bit more information for you, Senator Chambers.
SENATOR CHAMBERS: Okay, well do you mind sharing it?
SENATOR SCHIMEK: According to Senator Robak's staff there are 13,000 federal retirees living in Nebraska. What I don't have is a breakdown as to how many of those would be civilian employees or military employees.
SENATOR CHAMBERS: And.... Oh, go ahead.
SENATOR SCHIMEK: And I do have a breakdown on the actual money that we're talking about here, if you would like that.
SENATOR CHAMBERS: Yes, I would.
SENATOR SCHIMEK: Okay. It would ... originally, the way the bill was written, it would have cost 3.7 million one year and 3.8 million the next year. As it is, with just the civilian...
SPEAKER WITHEM PRESIDING
SPEAKER WITHEM: One minute.
SENATOR SCHIMEK: ... pensions included, it's 1.371 million, and 1.406 million.
SENATOR CHAMBERS: Thank you, Senator Schimek. But this final question, and I don't want to seem unfeeling, but when we are practical and consider the age of these people, that number is going to diminish gradually, isn't it?
SENATOR SCHIMEK: Yes, it will.
SENATOR CHAMBERS: Okay, thank you.
SPEAKER WITHEM: Senator Wickersham.
SENATOR WICKERSHAM: Thank you, Mr. President. I'm rising in opposition to the amendment that is being offered. It is based on a bill that has been offered in the Revenue Committee. It was not advanced. It's been presented in the Revenue Committee on a number of occasions. And I don't recall that it's ever made it to the floor of the Legislature. And there are good reasons for why it has not made it to the floor of the Legislature. The comparison of a pension plan and social security is entirely inappropriate. Social security is not a retirement plan, it is not a pension plan. It was never intended to be that, it's not funded like that. It doesn't produce income levels that are appropriate for that purpose. Social security is not a pension plan. To suggest that someone who is receiving benefits from a pension plan should be treated like someone who is receiving social security is entirely inappropriate. There are other problems with what is being proposed in this amendment. You heard that in the substitute amendment we are now confining the benefit that would be conferred by the amendment to civilians, civilian employees who are former employees of the federal government. The bill, as it was originally presented, also included military retirees. And I would suggest to you that there's another category of persons that might fit within the rationale of this bill, and those are persons who are currently employed in the state of Nebraska by the State Patrol. State Patrol members are not eligible to participate in social security, based on their state employment. Should they be treated differently? I think that argument will
be made to us in very short order, if we adopt this amendment, and if we then pass the bill. Now it is true that other states have offered a reduction, or a credit, or an exemption, or any ... there are variations, for these federal employees. Some states have actually gotten themselves in trouble because what they did was grant an exemption or a deduction for their state retirees, and then there was a federal lawsuit, and the federal government said if you're going to grant an exemption, or a reduction, or a credit for your state employees, you have to do the same thing for the federal retirees. This is not a simple issue, and I doubt that it is going to be confined to just a few people, as may be suggested to you. It is more complex than that. And I'm, quite frankly, apprehensive about where all of it might lead, and how much ultimately it might cost. This would be an ongoing cost, an ongoing reduction in revenue. Senator Chambers suggests that this is confined perhaps to a few people who are already of some advanced age and may eventually disappear altogether, but that is not our immediate concern. We have other people that would claim ... there would be some concern, I suppose, if you were one of those people. Thank you. But maybe I'm taking the Cudaback tack here, I guess. (Laughter.) But at any rate, it is not... it is not a worthwhile suggestion to believe that we could support this kind of amendment, 'cause over time all the people that it would benefit will be gone due to age and the natural processes. That is not, I suggest to you, the reason for adopting this kind of an amendment. We will have other people that would claim the similar benefits. I think it is inappropriate for us to do what is being suggested.
SPEAKER WITHEM: One minute.
SENATOR WICKERSHAM: We do not need to confer what is actually a state benefit on federal employees to enhance their retirement. That will cause us all kinds of problems, and I'm quite opposed to this amendment. Thank you.
SPEAKER WITHEM: Senator Schimek.
SENATOR SCHIMEK: Thank you, Mr. President, members of the body. Next thing we know, Senator Wickersham, you're going to try to slip your cemetery bill as an amendment to this amendment.
(Laugh.) One of the things that I should mention that relates to the question that Senator Chambers asked, I think, is that beginning in 1985, these federal employees were allowed to participate in social security. So it really does impact... it really does impact a certain group of people, those that were hired before 1985. So therefore, the fiscal impact would decrease as retirees ... because their retirees are a defined group, and the number wouldn't increase beyond those now employed and hired before '85. And that is really all I wanted to say at this point. Thank you.
SPEAKER WITHEM: Senator Janssen.
SENATOR JANSSEN: Thank you, Mr. Speaker, members of the Legislature. one question of Senator Schimek, if she would answer, please.
SPEAKER WITHEM: Senator Schimek.
SENATOR SCHIMEK: I will try.
SENATOR JANSSEN: Senator Schimek, I believe I heard Senator Wickersham state that military personnel would fall into this category. Is that retired military people?
SENATOR SCHIMEK: Not under this substitute amendment, Senator Janssen.
SENATOR JANSSEN: Okay. They would be out then.
SENATOR SCHIMEK: That is correct.
SENATOR JANSSEN: All federal employees, or just military?
SENATOR SCHIMEK: Just civilian employees would be covered by this amendment.
SENATOR JANSSEN: All right, thank you, that's all I wanted to know.
SPEAKER WITHEM: Senator Chambers.
SENATOR CHAMBERS: Mr. Speaker, members of the Legislature, Senator Cudaback is known to say he doesn't get any respect around here. Well, I probably will fit into that category also, because I'm about to say that after listening to what Senator Wickersham stated, and not having any knowledge of how this operates prior to listening to what he said, it makes sense that it's not quite as simple as I had been led to believe. So I am. not so sure that I'm in support of this. Senator Wickersham, could you state again what you said about this having been a bill, which committee it was before, and what had happened.
SPEAKER WITHEM: Senator Wickersham.
SENATOR WICKERSHAM: Well, there was a bill in the Revenue Committee...290 ... it was LB 296, Senator, it was introduced this year by Senator Robak, was considered, was not advanced by the committee. The bill is broader than the amendment that's now being brought to us. The bill would have included the military personnel that Senator Janssen was asking about.
SENATOR CHAMBERS: Okay. So the amendment is not the same as the bill. Was Senator Schimek correct in saying that, the way the amendment is crafted, it will apply to a specific group of people which will not be enlarged over time?
SENATOR WICKERSHAM: I believe that is correct, yes.
SENATOR CHAMBERS: So then we will eventually have this group diminish to the vanishing point?
SENATOR WICKERSHAM: To the...
SENATOR CHAMBERS: I'm trying to be more delicate than you were.
SENATOR WICKERSHAM: To the extent that we do not have others come forward to claim the same benefit.
SENATOR CHAMBERS: Let me ask Senator.... Maybe you can answer this question. Does this amendment apply to people who worked ,in Nebraska, or who have moved to Nebraska after retiring?
SENATOR WICKERSHAM: The amendment would be indifferent to the
place that you worked, you might have had all of your income taxed in another jurisdiction and then come here and receive from us the benefit of the exclusion that is being sought.
SENATOR CHAMBERS: Thank you. I'd like to ask Senator Schimek a question. Senator Schimek, were you aware of that?
SPEAKER WITHEM: Senator Schimek.
SENATOR SCHIMEK: Yes.
SENATOR CHAMBERS: Okay, thank you. These are things that I was not aware of, and they do have an impact on my view of the amendment at this point. I doubt that the amendment will go, so I'm not going to be that 25th vote, one way or the other. But Senator Wickersham did do a service for me by bringing information that I did not have. I am not being insensitive to the interests of these people, but the way I understood it, and maybe I just didn't listen carefully when it was first brought to my attention, that this would relate to people who had worked in Nebraska, had retired in Nebraska. But I did not know that it could apply to anybody. And since it could, there is no way for us to know how many people will be in this class at any given time, there's no way to know if it will diminish. And since we're dealing with the tax law of the state, I would want to be clearer than I am right now, or than I was at the time I said I would support it. With the information I've been given, it takes me away from the column of those who support it, but I'll listen and see if there is additional discussion that will bring me back. Senator Schimek, is there any way to craft this so that it would apply only to people who had worked in Nebraska...
SPEAKER WITHEM: One minute.
SENATOR CHAMBERS: ... and retired in Nebraska?
SENATOR SCHIMEK: I don't think so, Senator. I mean because what we're really trying to impact here is people who pay taxes in Nebraska. So it doesn't matter where you've lived or worked before, if you're paying taxes in Nebraska, this would apply to you.
SENATOR CHAMBERS: But these people wouldn't pay these particular taxes, would they, the ones we're talking about...
SENATOR SCHIMEK: What do you mean?
SENATOR CHAMBERS: If this... if this...
SENATOR SCHIMEK: If they would have an exemption very similar to what those who pay ... or those who have social security income would pay. It's, to me it is a question of fairness and equity. For instance, if you have a couple over 65 with an income of 35,000, consisting of social security, nonfederal governmental or private retirement benefits or investment income, and pay no state...
SPEAKER WITHEM: Time, Senator. Senator Coordsen.
SENATOR COORDSEN: Thank you, Mr. Speaker, members of the body. Question of Senator Schimek, if she would respond, please.
SPEAKER WITHEM: Senator Schimek, will you respond?
SENATOR SCHIMEK: I will try.
SENATOR COORDSEN: Senator Schimek, are you absolutely certain that all of these retirement fund deductions were ... have had the Nebraska state income taxes paid on them, if they were earned during a time when we had, since 1967?
SENATOR SCHIMEK: I'm not sure I can answer that, Senator Coordsen.
SENATOR COORDSEN: Okay, thank you. That's always been my problem with this particular issue, because it's been around for a long time. I think as everyone here knows social security is deducted after your state and federal income tax amount are computed. So you have already paid both federal and state income tax on social security. There either is several ways ... there either are several ways of treating the deductions for federal pensions, or there exists some confusion. I would hope that the members of the body listed as Senator Wickersham
quite clearly articulated our problems we had in Revenue Committee with this. Most private pension plans that are provided by the federal government, in that their Keogh Plans, or IRA's, or those sorts of things, are deducted from taxable income before the federal/state tax is computed. And then when you receive the income from those plans then those are liable for federal/state income taxes. And that is the opposite of social security income. It is not and has not been, and I have received mixed messages as to how the deductions for employee contributions to federal retirement plans has been treated over the years. Until we can clear that up, I certainly am not going to support this amendment, and I would give the rest of my time to Senator Wickersham, so he can again state the position and objections to this amendment. Senator Wickersham, if you wish.
SPEAKER WITHEM: Senator Wickersham.
SENATOR WICKERSHAM: Thank you, Mr. President. Senator Schimek raised a question of fairness. To my knowledge, the benefits that are paid out pursuant to the federal pension plans are not exempt from federal income tax. So if it is...if there is an element of fairness in this issue, then if the federal government does not perceive the same fairness issue for the pension plan that they sponsor and that they provide for their employees, then is it incumbent upon the residents and the citizens of the state of Nebraska to pay for some fairness that the federal government does not seek or see fit to extend to its own employees? I would suggest to you that it is not incumbent upon us as citizens of the state of Nebraska to provide a benefit for retired federal employees, when the federal government has that obligation for itself, and if it has not chosen to do that, there is no obligation on our part to do that. Now, as I've stated before, a variety of states have gotten themselves into trouble because they attempted...
SPEAKER WITHEM: One minute.
SENATOR WICKERSHAM: ... to do for their retirees what is being suggested for the federal retirees, and that is enhance their benefit with an income tax deduction, with a credit, with an exclusion, however you want to style it. That ultimately got them into trouble. There was, as I've indicated, federal
litigation and it wound up that many states had to make significant refunds to federal employees for taxes that had been collected on past retirement benefits. It simply makes no sense to attempt to leverage up a pension benefit with a tax exclusion. If you're going to have pension plans, you fund them straight up, straight out, you pay out the benefits. And typically the pension plan benefits are taxable.
SPEAKER WITHEM: Time, Senator, but your light is on next, if you care to continue.
SENATOR WICKERSHAM: Thank you. To reiterate again, it makes no sense to me, whether it's a state pension plan or whether it's a federal pension plan, to attempt to leverage up the benefits of that pension plan with an income tax deduction or exclusion. And that doesn't make any difference, whether it's a federal pension plan or a state pension plan. The portion of a pension plan that comes out and typically is not subject to tax is the portion that was paid for with after-tax dollars when the contributions were made. I can see really no rationale for what is being suggested, except that it would be an opportunity for citizens of the state of Nebraska, who may not have ever received any benefit from the past employment of these federal employees, to enhance their retirement benefit. And to argue that we're supposed to do that, because it conforms with social security, is totally in opposite to what the function of social security was and is, it is not a pension plan. If it was a pension plan, you wouldn't have a separate federal plan, and you wouldn't have all the separate state plans that we maintain, and you wouldn't have all the private plans that we maintain. It is perfectly obvious that social security is not a pension plan, and it is not appropriate to compare the treatment of social security benefits to the treatment that we would give to benefits received under a federal pension plan. I hope the body rejects this amendment.
SPEAKER WITHEM: Senator Schimek.
SENATOR SCHIMEK: Yes, thank you, Mr. President, members of the body. This is, of course, an area that I'm not as familiar with as Senator Wickersham and Senator Coordsen, but I will attempt to present the other side of the argument. And I guess, Senator
Wickersham, you make some cogent points. But we don't have any ... we don't have any authority over federal tax policy. We have authority over state tax policy, and that's really what this amendment applies to is state tax policy- And it's my impression that under this amendment the state income tax form would be revised so that the amount would be calculated the same as the social security is on the federal form. One of the things that I wanted to go back to, Senator Chambers, is from the information that I have been presented, if you are a retired couple over 65 and you have approximately a $35,000 income consisting of nongovernment employee type income, it's social security, private retirement benefits, investment income, et cetera, you wouldn't pay any state income tax. If you are a federal retiree with the same income, you would pay $822 in state income tax. And that...on that basis I would say that we're not treating people the same or equitably. And that is what ... that's the reason for this amendment. Now I don't know all the intricacies of the tax policy, I just know what I think is fair and what's riot fair. With that, I guess I would be happy to try to answer any other questions that you might have.
SPEAKER WITHEM: Mr. Clerk.
CLERK: Mr. President, Senator Bruning would move to amend Senator Robak's amendment. (See FA412 on page 2472 of the Legislative Journal.)
SPEAKER WITHEM: Senator Bruning.
SENATOR BRUNING: Mr. President, members, my amendment would add members ... retired persons from the military and members of the Nebraska State Patrol to Senator Robak's amendment. And this would basically reinstate LB 296 as it was set up in the first place, although it does add the State Patrol. And it, excuse ,me, in my mind if we add these people to this particular amendment, we are much more likely to entice them to stay in the state, to enhance the Nebraska economy by staying here, by spending their money. And in fact, I've received a large number of letters, I want to say 50 or 60, from retired military persons in my district who have said we need this amendment. We're thinking about moving to Kansas. We're thinking about moving to another state that does exempt military pensions and
other income from income tax. So I filed the amendment. I plan to withdraw the amendment here in just a moment and wait to see if the Robak amendment is adopted. At that time, I will refile the amendment; but at any rate, I think we need to include federal military retirees and State Patrol retirees as well. So with that I'll withdraw the amendment, Mr. Clerk.
SPEAKER WITHEM: So we're withdrawing the amendment?
SENATOR BRUNING: Yes.
SPEAKER WITHEM: Okay, it is withdrawn. Back to debate on the amendment. Senator Schimek, there are no further lights on, you would be recognized to close.
SENATOR SCHIMEK: Thank you, Mr. President. I think I probably better ask for a call of the house. It doesn't seem to be too many people on the floor right now.
SPEAKER WITHEM: You think you'd better, does that mean you are?
SENATOR SCHIMEK: Yes, I would like to, please, thank you.
SPEAKER WITHEM: The question is, shall the house go under call? All of those in favor vote aye, opposed vote nay. Record, Mr. Clerk.
CLERK: 4 ayes, 0 nays to place the house under call.
SPEAKER WITHEM: The house is under call. Members currently not excused please return to the Chamber. The house is under call. Unauthorized parties please leave the floor. Senator Schimek, there's four minutes left in your closing. Do you want to wait till a few more people get here or do you want to begin your closing now?
SENATOR SCHIMEK: I'll go ahead and begin. Thank you, Mr. Speaker. I will try to give you a brief synopsis of the amendment. It would exempt federal government civilian pensions from state income, for state income tax purposes using the same formula that allows Social Security benefits to be excluded from federal adjusted gross income. And I guess this matter has been
before us before. It's been an issue for as long as I can remember. And the reason it's an issue is because people who did get federal pensions and couldn't take out Social Security do end up getting hit on their income tax harder than those people who get just Social Security benefits. And I gave an example a while ago of a couple over 65 with about a $35,000 income who have Social Security and other kinds of investment income. They don't pay any income taxes. Those who get federal pension benefits with the same income would pay, according to the information I have, about $822 in income taxes. So it seems to me that there is a disparity there that needs correction. This amendment would apply only to those employees who were hired before 1985. So you would have a diminishing fiscal note on this over the years as these people retire. With that, I would simply ask for the adoption of the amendment.
SPEAKER WITHEM: Senator Schimek, you need to check in. Senator Bohlke, Senator Dwite Pedersen, Senator Kristensen. Senators Bohlke, Kristensen, and Dwite Pedersen. Senator Bohlke, Senator Dwite Pedersen and Senator Kristensen. Senator Schimek, the Sergeant at Arms have been diligently trying to find the three absent senators and seem to be unable to. What's your preference? Proceed with a vote. The question is the adoption of Amendment 2250 as offered today by Senator Schimek. All those in favor vote aye, opposed vote nay. Have you all voted who care to vote? Record, Mr. Clerk.
CLERK: 17 ayes, 14 nays, Mr. President, on the adoption of Senator Robak's amendment.
SPEAKER WITHEM: The Robak amendment is not adopted. Call is raised. Mr. Clerk, next item.
CLERK: Mr. President, the next amendment I have is Senator Janssen's AM2201. I might indicate to the membership that this amendment is in order because of the Speaker's authority in rule, under the major proposal rule. Senator Janssen, AM2201. (Appears on page 2105 of the Legislative Journal.)
SPEAKER WITHEM: Senator Janssen.
SENATOR JANSSEN: Thank you, Mr. Speaker, members of the
Legislature. This is a simple amendment. Basically the amendment would remove all of the current provisions of the bill dealing with changing the income tax and instead reduce the sales tax rate in this state from 5 percent to 4.5 percent. I offer this to you as I believe it is a better option for addressing any expected revenue surpluses rather than reducing the income tax. I was listening to the debate on General File when this idea occurred to me and I believe that it addresses many of the concerns that were raised during that debate by several people on the floor. If we're dead set on reducing some form of state taxation this session to deal with the anticipated revenue surpluses, I believe that a reduction-in the sales tax rate is a more logical approach than the reduction of an income tax rate for a number of reasons. Number one, it's faster. This amendment would take effect July 1 of this year. People won't have to wait to start to see their tax savings as they would have to with an income tax cut. Number two, the change from the sales tax is easier to implement than changes in income tax. Rather than requiring numerous accounting changes and so forth, you just need to cross out the number on the form the retailers use from 5 percent to 4.5 percent and inform the retailers of the necessary changes. Number three, it better maintains flexibility. If the forecasts are incorrect, then the Legislature has the flexibility -to address this again and changes can be done quickly since it takes less time to change the rate in the sales tax than it does in the income tax. Number four, the change in sales tax would help Nebraska to become more competitive with retailers in our neighboring states. As of January I of 1997, the Federation of Tax Administrators showed that Nebraska was tied with Iowa at 5 percent as having the highest sales tax among Nebraska and our neighboring states. Next in line was Kansas at 4.9 percent, then South Dakota and Wyoming at 4 percent and finally Colorado with 3 percent. A reduction in the sales tax rate might actually bring people driving across our eastern and southern borders towards Nebraska to buy their goods. It would also make the decision to shop in South Dakota and Wyoming a little less tempting for those on the northern and western borders. Number five, this amendment would generate approximately the same amount of tax saving as the other amendment did, the one on General File did. Under the April forecast, the Department of Revenue has estimated that a half a percent, reduction in the
sales tax rate would equal 72.26 million in 1997-98, that would be for 11 months; and 82.9 million in '98 and '99. But most of all, the sales tax option is fair. Reducing the sales tax would help all people, not just those that pay the income tax. Therefore, it would truly help all people that help contribute to the state's estimated revenue surplus to share in the benefits of that surplus. The anticipated surplus over the next two years does not just come from income tax revenue but from sales tax revenue as well. In fact, it is arguable that the revenue surplus is actually coming from a slow increase in sales tax revenues since the increase in the sales tax rate since 1999 or 1990. If you look at the adjusted revenue figures for sales tax and income tax from 1990 to 1996, they both have about an average growth rate for this period of 5.6 percent. I believe that we must discuss this fact that increased collection of sales taxes have also put us in a position of having an anticipated revenue surplus and whether cutting the sales tax rate is not a wiser option. I believe that we need to spend some time discussing on the floor the option of cutting the sales tax rate rather than the income tax in Nebraska. Reducing the sales tax makes sense and is a fair method of returning any revenue surpluses to the people if that is what the body feels must be done. Thank you, Mr. Speaker, for time and I'm looking forward to some discussion on this amendment.
SPEAKER WITHEM: Thank you, Senator Janssen. Senator Will.
SENATOR WILL: Thank you, Mr. Speaker, members of the body. I rise in opposition to the Janssen amendment. I applaud Senator Janssen for bringing this concept because, frankly, he does make a very good point in his analysis of the sales tax and what a sales tax decrease could accomplish. The sales tax in all the literature is identified as the more regressive tax of the major taxes that are levied particularly when you have the number of exemptions that we have in the state of Nebraska. And he talks about the administrative ease with which a sales tax cut could be implemented and he's correct with that as well. However, I think we need to maintain our focus on LB 401 and the purpose behind that and that is a reduction in the income tax rate. We have reached a point where the Governor and various other individuals that are interested in reducing the income tax have made a good case, I believe, that we have additional revenue
that enables us to make the cut that would be proposed under LB 401 and the amendment that is coming. That this is something that, in fact, would address what is a surplus in revenue that has occurred that would return some dollars to those individuals that have paid them in and, in fact, paid them in to a degree that is far and away above that that was anticipated by the forecast that had been done by the various state entities that predict the revenue that's coming in. The fact is our economy has been more robust than has been expected beyond our wildest dreams, in fact, and we have additional revenue. We can adjust our income tax rate, and I would be the first to suggest that in the future at least an adjustment in the sales tax rate might be appropriate as well. But at this late date, without this being a proposal that came before the Revenue Committee and the Legislature in general, I think our best plan at this point is to stick with the course and pursue the most appropriate form of LB 401 to reduce income taxes to, in fact, make sure that we don't reap benefits that we were not expecting at the expense of the income taxpayers of the state of Nebraska. I think if we do do an across-the-board cut combined with the type of credit that is being proposed in the amendment that will be forthcoming that that is probably the Most appropriate way to address the budget surplus that we have combined with, as a matter of fact, some selected replacement revenues for property taxes that are out there that have been proposed, one of which admittedly is mine. And I think there is room to do both, an income tax cut and do some replacement revenues and still leave us with an adequate reserve. I would hope that that's the course that we pursue. I think that the Governor, myself, a number of other individuals have set their sights on an income tax cut for several years now. I think it's something that we can afford that we can do within reason and that we ought to do. And so I would hope that the body and again I applaud Senator Janssen. This is a concept that is certainly worthy of discussion, but I would hope that the body would reject the Janssen amendment, support the subsequent amendment to LB 401 and advance the bill.
SPEAKER WITHEM: Thank you, Senator Will. Senator Chambers.
SENATOR CHAMBERS: Mr. Speaker and members of the Legislature, since as we stated over And over whenever we talk about the sales tax it is the most regressive tax that can be imposed,
some relief in the sales tax area is the most just tax break that can be given if one is to be given. Senator Janssen pointed out all of the reasons why it is much easier to implement a cut in the sales tax. Everybody who spends money would feel that and gain benefit from it. Senator Wesely indicated that it wouldn't benefit the wealthy as much and Senator Schellpeper I said if they spent more they would because they get more of a tax break. And it also would put more money into circulation, it would fuel the economy. And they say when the economy is going good rich people do well so they can help feather their own nest. But in all seriousness, this is an amendment which deserves to be considered but it really is not going to be. I think Senator Janssen knows that. I looked at this piece of paper that I would call the intimidating paper that Senator Wicker... I wonder if Senator Wickersham is the one who passed that one around with the names of all those assassins and hit persons on it. Senator Wickersham, did you hand around this packet of paper called an amendment?
SENATOR WICKERSHAM: Senator Chambers, we will eventually come to that amendment and I will introduce that amendment and speak on its behalf.
SENATOR CHAMBERS: Oh, it hasn't been introduced yet?
SENATOR WICKERSHAM: Yeah, it has been introduced. It will be...
SENATOR CHAMBERS: Oh, okay, thank you. And Senator Wickersham, I tried to count the number of signatures but I lost my place as I became more and more intimidated and my fingers shook. I probably counted the same name more than once or maybe counted two names as one. How many signatures are on here?
SENATOR WICKERSHAM: Senator, I really haven't attempted to count them. I am just hoping that no one in their enthusiasm signed it twice.
SENATOR CHAMBERS: Thank you. Whenever you have great wealth, you don't pay attention to exactly how many dollars, just so you know you got a lot of them. I think this amendment was probably signed by so many people to discourage opposition to it, to make
it appear that the income tax cut is a foregone conclusion and to try to get others not to even brook a different or alternative approach. But I'm very grateful for the fact that Senator Janssen would have none of that. We who believe in a more equitable system of taxing must put forth this effort that Senator Janssen is leading. the way on. When we get to that income tax provision, we'll have a chance to talk about the miscalculation, the misprojections, by the psychic review board. Where is Senator Raikes? He used to be one of those psychics, didn't he? I wanted to ask him did he take his turban and store it in a trunk before he joined the Legislature hoping that nobody would know? Oh, but he's dragging his psychic predictions behind him and I'm going to have a chance to have him explain that esoteric mysterious methodology that they go through, Senator Dierks, to come up with a miscalculation of over $30 million. But at any rate, not at any rate, Senator Wickersham hopes it's his rate and I hope it's the rate that Senator Janssen is offering on the sales tax. We know that we are engaged in a great political struggle over this income tax cut. The Governor has made his threats about what he will do and it probably has taken root, his threatening that is. And the Legislature...
SPEAKER WITHEM: One minute.
SENATOR CHAMBERS: ... is going to do what he insists on. Somebody told me that he really showed how serious he is because he vetoed out $11 off some program. And I said you mean $11,000 and I was told $11 and another place $80 so he really is being serious ... oh, and he went after the Barber Board for $800 1 understand thinking that I still actively barber and that will somehow hurt me. But if anything, it might cut the ability of the Barber Board to conduct inspections so it might help me if I were barbering which I'm not because I spend so much time with my fellow wizards, Senator Wickersham. But it's regrettable that the people who might still be watching our proceedings could not be in this room to vote. I'm sure they would much rather have a break...
SPEAKER WITHEM: Time, Senator.
SENATOR CHAMBERS: ... in the sales tax, oh, you said time.
SPEAKER WITHEM: Time.
SENATOR CHAMBERS: 6:31 p.m.
SPEAKER WITHEM: Thank you very much, Senator. Senator Wickersham.
SENATOR WICKERSHAM: Thank you, Mr. President. I'm somewhat tempted to wait till 6:32 to begin so that we aren't in the same time zone or warp zone as Senator Chambers. The amendment that we have offered to us by Senator Janssen, of course, is not the subject matter that I hope we're going to be addressing tonight which is a reduction in the income tax rates and in certain other tax benefits that relate to the income tax. It is an issue that I'm not sorry that Senator Janssen has brought to us to consider the sales tax rates in the state of Nebraska, but the fact of the matter is that we still collect less sales tax in the state of Nebraska than we do income tax at the current time. And if we're going to have a reduction in state revenues, I believe it is more appropriate for us at the present time to reduce income tax rates or income tax collections because you'll see in the amendment that will be offered later there's a combination of things that affect rates and other components, all of which reduces income taxes. But while we're still collecting more income taxes than we are collecting sales taxes in the state, I believe it is appropriate to maintain our focus on the income tax if we're to have a reduction in state collections. And I am of the mind that we should and could and I hope will reduce state collections over the next two years. If we do not, we'll collect revenues that we do not need for state operations; and those dollars are better left in the hands of the taxpayers of the state of Nebraska. It is true that what Senator Janssen is offering is an alternative to the proposal and as he calculates it, it would reduce revenues by approximately the same amount; but it would certainly produce different reductions for taxpayers across the state of Nebraska unrelated to their ability to pay or the rest of our tax structure. And again, I believe it is more important to reduce the tax that we collect the most dollars from and that is the income tax. So I would hope that you would oppose the Janssen amendment.
SPEAKER WITHEM: Mr. Clerk, I understand you have an amendment.
CLERK: Mr. President, Senator Janssen would move to amend his amendment. (See page 2473 of the Legislative Journal.)
SPEAKER WITHEM: Senator Janssen.
SENATOR JANSSEN: Mr. Speaker, members of the Legislature, this amendment would allow ... we would allow this to end in two years and that would coincide more with what the income tax proposal was. So I ask for your comments on this and see what people think about it.
SPEAKER WITHEM: Thank you, Senator Janssen. Is that the conclusion of your opening?
SENATOR JANSSEN: Yeah.
SPEAKER WITHEM: We're now debating the Janssen amendment to the Janssen amendment. We'll go through the list. Most lights were on prior to the filing of the amendment to the amendment. Senator Schrock, do you wish to discuss the amendment to the amendment?
SENATOR SCHROCK: Mr. Speaker, members of the Legislature, I would like to discuss the amendment to the amendment and the amendment briefly. I wished I would have saved it, but about a month ago I was reading in one of our state legislative magazines and it said the national average sales tax rate in the nation is 8.2 percent. We're probably about right on target in the Midwest, but there are some states that have a very high sales tax rate. And I think what Senator Janssen is trying to do is laudable, but I guess I cannot support it and I just wanted to pass that information on. The average sales tax rate in the nation is 8.2 percent.
SPEAKER WITHEM: Senator Janssen, your light is on next to discuss your amendment to the amendment.
SENATOR JANSSEN: Thank you, Mr. Speaker, members of the body. If, as I said before, this would coincide with the sunset of the
income tax, you know. And as Senator Chambers had mentioned during his discussion, you know, wild dreams about what's going to happen with our economy. You know, even the wildest dreams don't always come true either. And I can just see us, you know, in a couple of years coming back and saying we're going to have to raise this income tax up again and maybe possibly we'll have to raise it on just a little bit further. Can you imagine the gnashing and screaming and hollering we would hear from our constituents and from the people behind the glass? I can just about imagine what would happen back there. But on the other hand, if you had to raise that sales tax another half a percent, I don't think you would see that., I don't think you would have any problem with moving the sales tax back and forth. As Senator Schrock said, the average in the United States is 8.5 percent. I don't expect to see that here. Another thing you have to think about, there are a lot of cities, towns, and villages that have imposed a half or one percent increase in their sales tax to generate revenue to raise revenue for the cuts in 1114. So if that city has raised their Bales tax a half a percent and we come and drop ours a half a percent, they'll see no increase, they'll see no increase in their sales tax and that makes it a lot more lucrative for people to come and buy in those cities. And if they're buying more if the people do in the towns like, cities like Omaha and South Sioux City where the can be more competitive with their sales tax rate than the people in the same type of business across the state line or across the river, maybe, just maybe we'll see some of those people coming to Nebraska instead of wearing out the bridges going over to Iowa for the playthings they have there. Maybe they'll come back to Nebraska and spend some dollars buying a pair of shoes or new coat. Can you imagine what the difference ... what would happen if everyone had to, if everyone had to pay their sales tax in one chunk at the end of the year? What would happen? People would say, well, then for goodness sakes let's lower that sales tax rate. I didn't realize that I was paying that much sales tax. Most people that consumers of the goods are the ones that are paying it. You know, and proportionately the person with the high income buys the Cadillacs and the Lincoln'. The people like Senator Chambers and I buy the old clunkers. We don't pay that much sales tax.
SPEAKER WITHEM: One minute.
SENATOR JANSSEN: So you have to look at it and I've been on both sides of the fence. I know what it's like to pay sales tax on the big cars. I know what it's like to pay sales tax on the medium size cars and the small cars. But proportionately, everyone is getting the same break. And I still believe and I will continue to believe that this is the best way to lower the revenues if that's what we want to do in this state and give it back to all the people, not just a few. Thank you.
SPEAKER WITHEM: Thank you, Senator Janssen. Senator Schellpeper followed by Senators Elmer, Chambers, Will and Vrtiska.
SENATOR SCHELLPEPER: Thank you, Mr. Speaker and members. I rise to support the Janssen amendment and also the Janssen amendment to the amendment because I think it's probably the more just and fair way to go. I think the comment was made that there's a lot more income tax collected. I think if you look at the figure it's almost identical. There's a little bit more income but not that much of a large amount collected. I think if you look at what this body could do in future years the sales tax basically is controlled by this body whether we go up or down as was mentioned whereas income tax is really controlled by outside of the glass and that's really right. We control more or less the sales tax in this body. Last Sunday I was watching TV, an Omaha station, and Governor Nelson was on talking about the income tax cut and how much the people of this state are wanting an income tax cut. And as I go through my district, I don't find anybody that wants the income tax cut. They're saying cut my taxes but they're talking property tax. He also made the comment that he wouldn't sign LB 806 unless there was property tax relief. There won't be property tax relief for a lot of people in my district. But I think we need to do something with this additional revenue. I think the sales tax is a more fair way to go but, Senator Janssen, I think you can see by the interest on the floor that it's not going to happen, the income tax is going to go. There was a package put together and everything was kind of brought together for the income tax with the income tax with the transferring some money with the rebate and everything was all put together with your ... and if you pay your own health insurance, that will be ... you can deduct
that so all those things put together made the bill acceptable to a lot of people and so I don't think it's going to happen. But this is by far the most fair and just way to go. So even though it won't pass, it should pass. Thank you.
SPEAKER WITHEM: Senator Elmer.
SENATOR ELMER: Thank you, Mr. Speaker. You know, I agree with Senator Schellpeper and Senator Janssen on this. The fairest thing, the most competitive thing, our income tax rate compares very favorably and competitive position with those states around us that have an income tax. I understand South Dakota has no income tax. We lower our tax some, we're still not going to compete with South Dakota on income tax. If we want to help those people who paid and paid and paid and those that don't have income, the sales tax way is the way to go. Income tax you pay only if you make income, so I'm sure that we're right in our analysis that we feel this is fair, we feel like this would be the best way to go, but obviously in the comments that I've heard unless we can be very persuasive, this option will be listened to but will fail. I'd urge people to think about it. If the opportunity arises in the coming session or the next biennium and our economy continues to grow, then instead of increasing the income tax deduction or extending it to consider at least making a portion of the return that we're going to give to our taxpayers reducing their burden to support government come from sales tax reduction. Thank you, Mr. Speaker.
SPEAKER WITHEM: Senator Chambers.
SENATOR CHAMBERS: Mr. President, members of the Legislature, I think I've been unfair to the Governor. I'm looking at these veto cuts. I am overwhelmed. I really am. Senator Janssen, you know, it really takes somebody with a lot of time on his hands to cut $50 out of the Public Service Commission's cash fund, program 64, 50 bucks. I'm going to contact the Public Service Commission and tell them if they want that made up I'll give them that out of my pocket. So then I do look ... where's Senator Dierks? Senator Dierks, $11 from the cash fund of the Department of Agriculture. That shows how little they think of the area we operate in. These are vetoes. He vetoed $11 from the Department of Agriculture's cash fund. What do you think of
that? I'd like Senator Dierks to answer that.
SPEAKER WITHEM: Senator Dierks, care to respond?
SENATOR DIERKS: Well, yes, Mr. Speaker. You know, $11 in agriculture is a pretty big amount, Senator Chambers, so we're all pretty devastated with that.
SENATOR CHAMBERS: You know what I'm willing to do? If you give them five, I'll give them six and we'll make that up for them. Then I go over here to the Commission on Law Enforcement and, you know, he's over here preaching to us about being tough on crime. We have a Commission of Law Enforcement. Their General Fund appropriation is cut by $20. What do you think of that, Senator Janssen? That's what the Governor's people are doing. Then FF, I guess that's foolish fund, fun fund, or it might be federal funds, $49 from the Commission on Law Enforcement and he wants to say he's hard on crime. Members of the Legislature, this is the man who's giving you leadership on this income tax cut. How many millions of dollars, Senator Schrock, do you happen to know because I don't see many more people in here. Senator Schrock, do you know how many millions of dollars this tax cut will result in reducing the state's money by? I was trying to see if Senator Wickersham is here. Do you happen to know, Senator Schrock?
SPEAKER WITHEM: Senator Schrock, do you care to respond?
SENATOR SCHROCK: Somewhat over $100 million I believe.
SENATOR CHAMBERS: That's a good ballpark figure and that's close enough. Members of the Legislature, if I were talking about cutting the income taxes by $100 million, I certainly wouldn't try to make up for it by cutting $20 here, $50 there, $800 from the most innocuous board around, the Barber Board, $800 from them. How many $20, how many $50 cuts, how many $800 cuts is it going to take to get up to $100 million? On the other hand, if somebody is dealing in the stratospheric realm of hundreds of millions of dollars, why and how can 'that person find time to cut budgets by $20? That's foolish. Parents don't even do that to their children. You wouldn't dare cut your child's allowance by $20, $11 maybe as they did the Ag
Department but not $20 as they did law enforcement. Senator Janssen, can you see how our battle is uphill? Somehow this session lost touch with reality and things are not making any kind of sense to me. If there is really an interest in doing something for the people, the sales tax is where the cuts should be made. I haven't heard anybody, speak...
SPEAKER WITHEM: One minute.
SENATOR CHAMBERS: ... against that premise, but they're saying that there should not be an adoption of Senator Janssen's amendment. And that's because Senator Wickersham with some of his colleagues have put together this amendment that we're going to have presented to us at some point. And I'm curious to hear what they're going to tell us and how they're going to justify it. I'd like ... oh, the Speaker is in the chair. When he gets out of the chair, he will probably be speaking on this. There's a question that I want to put to him, too, as just an ordinary member of the Legislature. I just don't know what to say beyond what I have said, so I think I'll just stop right here.
SPEAKER WITHEM: Thank you, Senator Chambers. Senator Will.
SENATOR WILL: Thank you, Mr. Speaker, members of the body. Briefly, I rise to oppose the Janssen amendment to his amendment for a couple of reasons that I won't take too long to explain. Number one, I don't believe that we should be taking a lot of time fine tuning an amendment that I oppose to begin with. And secondly, that I doubt very much it will be adopted. Secondly, I do think something that Senator Chambers said earlier was incorrect in that he is absolutely correct and I admitted that the first time I spoke in that the sales tax is regressive. But I doubt very seriously that individuals that might be watching tonight would be applauding the Janssen amendment because study after study that I have looked at shows that the sales tax, as far as perception goes, is one of the more agreeable taxes that people pay primarily because they pay it in small increments and whereas the income tax is paid in a lump sum and, therefore, tends to be less agreeable to the populace as a whole. -And admittedly particularly that's the federal income tax, but the state income tax and property tax both generally register as more disagreeable than the sales tax. That's not to say that
this is not a legitimate issue that Senator Janssen has raised. I think it's something that ought to be discussed. I'm simply saying I don't think this is the time or the place. This is something that ought to be brought up, ought to be discussed all session, not adopted as an amendment on Select File. So for that reason I would urge the body to oppose the Janssen amendment to his amendment and the underlying Janssen amendment.
SPEAKER WITHEM: Senator Vrtiska.
SENATOR VRTISKA: Thank you, Mr. Speaker, and members of the body. I just rise to discuss for a moment. I heard Senator Schrock say that the average in the country was 8 percent on sales tax. I'd like him to know that I know some people who live in those states and they have the lowest property tax, much, much lower than Nebraska has. And I think the issue here is the equity between the various methods of taxing. Where they have a higher income and sales tax, they obviously have a much lower property tax. And following up with what Senator Wickersham said, that seems to be where the biggest outcry in Nebraska is is in regard to taxes is property tax. I also... I could support Senator Janssen's bill except I know exactly what will happen if we lower income tax across the state. These local option sales people have these local option sales tax, they will all jump on the bandwagon, everybody will raise their local option sales tax and everybody knows what happens then. The big communities where the sales are get the money and the little communities that don't have very many sales end up with nothing. And I've always been opposed to local option sales tax for that reason, but there's nothing I can do about it because that seems to be the attitude that we've had in this state for many, many years and I suspect it will continue. But I just had to comment that we always talk about equity between the taxes and the only way you're going to get equity is to leave some of the taxes at the level they are and hopefully in that method be able to lower property taxes. I have two daughters, one has a new home in Minnesota and one has a house that's 50 years old in Lincoln. The one in Lincoln pays more money on...pays almost as much money as the one in Minnesota showing you what the difference in property tax is. But by the same token, they pay a great difference in the amount of sales and income tax also. So it all equal out except it's from who it's taken. Thank you.
SPEAKER WITHEM: Senator Janssen.
SENATOR JANSSEN: Thank you, Mr. Speaker, members of the Legislature. You know I just... it boggles my mind to know how anyone could really vote against a cut in the sales tax when everyone pays sales tax and this would affect everyone. it would affect everyone from the guy that buys the $100,000 automobile down to the young person that buys a pair of socks in the department store. It affects everyone. And I received a letter the other day from a constituent. I've known this gentleman for a long, long time. They said, thank you so much for your negative vote on LB 401. To me this bill is just a farce for trying to solve our tax problem. Our problem is not the income tax, but it's the property tax problem. Reducing the income tax would only help a few people that really don't need any help anyway. And the people that really need the help aren't going to get enough refund to even make it pay. In fact, he said it would cost almost as much to refund as the total amount was. Well, he's a little misled there. And he said I hope you will continue to stand firm on 401 and I'm sure you will. The people of your district certainly appreciate a senator who votes his convictions as well as those convictions of his district. I said this is an elderly gentleman who's worked hard all of his life and still works hard, but I appreciate a letter like that. I appreciate the fact that he knows that the small amount that will be refunded most people won't see it anyway. I'm sure it will be given as a credit on your next year's income tax when you file it. But the people who see the half percent on that sales tax, how can you argue against it? I just... I don't see any other ... any way that you can say that this is not a good way to reduce the expected surplus that we have in revenue. So I ask you again to support the amendment to the amendment and then the amendment. With that, I give the rest of my time to Senator Chambers.
SPEAKER WITHEM: Senator Chambers, you have about two minutes of your own and then ours is the next light on. With your permission , we'll just run the clock straight through.
SENATOR CHAMBERS: Thank you, Mr. Speaker. I appreciate that. I'd like to ask Senator Will a question or two.
SPEAKER WITHEM: Senator Witek ... Senator Will.
SENATOR CHAMBERS: (Laugh) I cannot top that. Senator Will...
SENATOR WILL: I will respond.
SENATOR CHAMBERS: And I'd like to go into some of your earlier irresponsible inflammatory statements that you made. Senator Will, and you're the only one who can talk about taxes and sound inflammatory and a lot of people are irresponsible, but when you talked about these studies saying that people-would rather pay sales tax than income tax, where did you get this study and who conducted it?
SENATOR WILL: These are studies I've read over the years, Senator Chambers, that have been in journals of taxation and...
SENATOR CHAMBERS: And who wrote those?
SENATOR WILL: ... that have...
SENATOR CHAMBERS: Were they organizations or individuals? I don't mean you have to give a name.
SENATOR WILL: They were ... they obviously were written by an individual, but they were organizations that specialize in studying taxation.
SENATOR CHAMBERS: And would they usually be commissioned by some political subdivision trying to give an argument for raising the sales tax by showing that it's less painful?
SENATOR WILL: I would say, Senator Chambers, I've read a number of these studies. I'm sure some of them were commissioned by people that had a particular bent. Others I think were scholarly studies that were simply measuring the psychology of taxpayers.
SENATOR CHAMBERS: Do you think there might be people who don't earn enough money to have to pay income tax or be in other categories where they might have a substantial amount of money
like those Senator Schimek spoke of earlier but who don't have to pay state income tax? Do you think there are people like that in this state?
SENATOR WILL: Oh, I'm sure there are because of the various exemptions and deductions that are out there.
SENATOR CHAMBERS; So this income tax cut would not benefit them, would it?
SENATOR WILL: No, not if they... if you don't pay income tax, an income tax cut doesn't benefit you.
SENATOR CHAMBERS: If there were a cut in the sales tax, that would benefit them, though, wouldn't it?
SENATOR WILL: Virtually anyone that makes retail sales purchases would benefit from a sales tax cut.
SENATOR CHAMBERS: But you're against a tax that would benefit the many in exchange for a politically-based irresponsible tax that would benefit the few and especially the wealthy?
SENATOR WILL: Well, I'm against it in this context, Senator Chambers. I'm not necessarily against a cut in the sales tax, but that's not the purpose behind LB 401 and is not something I would support at this time.
SENATOR CHAMBERS: When you talk to people without mentioning a particular tax by name and you hear people talking about taxes being too high, if you could break it down into a rough percentage basis, what percentage will bring up income tax, state income tax?
SENATOR WILL: Of anyone that would bring up a tax on their own?,
SENATOR CHAMBERS: Yes.
SENATOR WILL: State income tax probably 5 to 10 percent.
SENATOR CHAMBERS: Right, probably less than that but I'll let you have that. What's the other tax they talk about?
SENATOR WILL: Motor vehicle tax is a big one and property tax in the state of Nebraska are probably the two that I hear the most.
SENATOR CHAMBERS: And in a sense we could say those two merge, the motor vehicle tax and the property tax because both of them are taxes on property. So we have not, in my opinion, been fair to the public with what we did on LB 271 dealing with motor vehicle taxes. We have not been fair on that, in my opinion. We're about to do something on 401 which is not going to be fair. That's my characterization. But we are dealing with something which even you admit is not the subject that people bring up when they talk about taxes being too high and that's an income tax cut. Isn't that true?
SENATOR WILL: It's true. Well, first I want to clarify, Senator Chambers, just for the record that...
SENATOR CHAMBERS: Sure.
SENATOR WILL: ... I agree with you on LB 271.
SENATOR CHAMBERS: Oh, I know that, right.
SENATOR WILL: You remember that I've been voting with you on that bill.
SENATOR CHAMBERS: Yes, you have.
SENATOR WILL: The... if you're talking about just a sampling, an anecdotal sampling of people that I have talked to with respect to the state income tax, you're characterization would be correct that this is not the majority of the people that I talk to, and I'm being honest about that.
SENATOR CHAMBERS: I understand, that's why I asked you, Senator Will, because you will be even if it might go against somewhat the position that you're advocating. How much impact do you think the amount a person will see on his or her income tax return, you know, that check they get back? How much impact do you think that will have on their psyche when they see they
might get $20 more than what they would have gotten before? Do you think they'll even know it?
SENATOR WILL: That is kind of a question of psychology, Senator Chambers, but...
SENATOR CHAMBERS: Well, let me say how happy do you think it will make them?
SENATOR WILL: In the scheme of things, it will probably not raise their level of happiness beyond what a number of other thing would.
SENATOR CHAMBERS: Do you think there are people who might not even be aware by looking at their income tax check, their return check that there was a tax cut included in that amount?
SENATOR WILL: I'm sure there are people like that.
SENATOR CHAMBERS: So why all this talk that we hear from the big politicians that this is what the people are clamoring for when the only ones they can really point to are the chamber of commerce types, they and the rich people and these big corporations? They're the ones clamoring. I agree with that. And it will benefit them, I agree with that. But when I talk about the people, those are not the ones that I have in mind. They are human beings, but they're not a part of the group that I'm referring to when I say...
SPEAKER WITHEM: One minute.
SENATOR CHAMBERS: ...the people. If we were to divide the population of this state into two groups clamoring for the income tax, there would be the politicians and the big shots and the rich people on one side and who on the other side beside a few miscellaneous rag-tag bobtailed members of the Legislature? There wouldn't be many, would there?
SENATOR WILL: Was that a question?
SENATOR CHAMBERS: Yes.
SENATOR WILL: I think the idea, Senator Chambers, is that if an income tax, cut does make the state of Nebraska more hospitable to individuals who will create jobs that in the end will benefit a greater number of the populace than would be directly benefitted by an income tax cut. That's the theory.
SENATOR CHAMBERS: So if we were to take it to the extreme that Senator Tyson would if he was giving the argument, this income tax is really for the greater glory of God more or less.
SENATOR WILL: Well, we're back on our retailer question we were talking about the other day I guess.
SENATOR CHAMBERS: And I think our time is up.
SPEAKER WITHEM: Time. Senator Chambers, did you punch your light again or did I just not turn it off? Okay, with that, Senator Janssen, you would be recognized to close on your amendment to the amendment.
SENATOR JANSSEN: Thank you, Mr. Speaker and members of the Legislature. The amendment to the amendment as I stated before only coincides with the income tax reduction bill in 401, that provision and it sunsets it in two years to coincide with that. And other than that, I hope that you will vote for the amendment to the amendment because it does make sound policy. We don't want to keep it on any longer than we have to because I am afraid that the sales ... the economy is going to turn around some day. It has over the years. Senator Chambers and I have been around a long time along with Senator Tyson and have watched the economy go up and down, up and down and it's not going to stay up forever. With that, I would ask for a call of the house, Mr. Speaker. I believe we're going to need it. I think there's only about 20 people here. So, thank you.
SPEAKER WITHEM: Thank you, Senator Janssen. The question now is shall the house go under call? All of those in favor vote aye, opposed vote nay. You will ask for a roll call vote or did you, in fact, ask for one? Senator Chambers did, in fact, ask for a roll call vote. The house is under call. Please record, Mr. Clerk.
ASSISTANT CLERK: 20 ayes, 0 nays to go under call, Mr. President.
SPEAKER WITHEM: The house is under call. Members please return and record your presence. The house is under call. Senator Cudaback, Senator Elmer, Senator Wesely and Senator Matzke. Senator Matzke, Senator Wesely. Senator Matzke. Senator Janssen.
SENATOR JANSSEN: Mr. Speaker, you can go ahead. There's only one...
SPEAKER WITHEM: I think they're actually both here and just not checked in.
SENATOR JANSSEN: Okay, all right, thank you.
SPEAKER WITHEM: Mr. Clerk, please call the roll on the Janssen amendment to the amendment.
ASSISTANT CLERK: (Roll call vote taken. See pages 2473-74 of the Legislative Journal.) The vote is 17 ayes, 7 nays on the adoption of the amendment to the amendment, Mr. President.
SPEAKER WITHEM: The amendment is not adopted. The call is raised. We're now back to consideration of the underlying Janssen amendment, 2201. Senator Janssen, you're recognized to speak.
SENATOR JANSSEN: Thank you, Mr. Speaker, members of the Legislature. Thank you very much, body. This leaves the sales tax on indefinitely now so we will really get some reductions. Thanks a lot. Senator Jones, could I ask you a couple questions, please.
SENATOR JONES: Yes.
SENATOR JANSSEN: Senator Jones, in your farming and ranch operation, you make money every year. You pay income tax every year in you business, don't you?
SENATOR JONES: Yes.
SENATOR JANSSEN: It's a lucrative business and you're always...
SENATOR JONES: If I make money, yes.
SENATOR JANSSEN: So then there are some years that you don't pay any income tax, is that right?
SENATOR JONES: That's right.
SENATOR JANSSEN: So you're going to get a credit, you know, (inaudible) give a credit. Are they going to pay you cash back on that then if you don't... I don't know either.
SENATOR JONES: No.
SENATOR JANSSEN: Good, now neither one of us know. Tell me something, though, Senator Jones. Whether you make any money or not on your ranch operation, when you go to Broken Bow or wherever you buy your parts and so on, now if, you know, if your business isn't doing too good and you're not paying any income tax, do you pay sales tax? You don't have to pay the sales tax on those parts then?
SENATOR JONES: Oh, yes, I do.
SENATOR JANSSEN: Do you?
SENATOR JONES: Yes.
SENATOR JANSSEN: Okay. What's the rate in Broken Bow, do you know?
SENATOR JONES: It's five and then a half a percent for city.
SENATOR JANSSEN: City has a half a percent then also, um-hum. Now did you ever think about going to ... going to South Dakota to buy those parts?
SENATOR JONES: I don't never take the time to do that, no.
SENATOR JANSSEN: So you're going to have to pay that sales tax.
SENATOR JONES: Yes.
SENATOR JANSSEN: What do you suppose the sales tax you pay, just on things that you use for your operation in repairs and so on, what would that amount to in a year's time? Do you have any idea?
SENATOR JONES: It would vary, but my repair bill runs, could run $700, $600 and you take 5.5 percent times that so you can get a pretty good idea what that would be.
SENATOR JANSSEN: What if you'd have a tractor that broke down and take a new engine? Could you get by for $700 on that?
SENATOR JONES: No, it'd be closer to at least, the least it could be is $3,000. It could run $5,000 easy.
SENATOR JANSSEN: But you're going to be paying that sales tax. Now do you think that if you got the end of the year if you didn't have to pay that sales tax when you bought it and you got to the end of the year and then they would compute your sales tax at the end of the year, how would that be compared to just a mediocre year on income tax for you, state income tax, talking about state income tax?
SENATOR JONES: Yes. I would say I probably pay more sales tax the last couple of years than I have state income tax.
SENATOR JANSSEN:, Thank you, Senator Jones. So you see, this is what's happening. We can't assume that we're going to have all of this money rolling out of the State Treasurer's over there. You know, I asked the State Treasurer the other day I said have you had to put any bang boards up along the sides of the bin over there? You farmers know what I'm talking about bang boards. No, he said, I really haven't. So I said the bags of money aren't actually rolling out of the treasury are they? No, he said, those are forecasts. So forecasts being what they are, we know they can change, but we know we're going to have to buy. Senator Jones is going to have to buy parts for his tractor. Senator Tyson is going to have to guy a new suit of clothes if he stays down here long enough, and he's going to have to pay
sales tax on that. You go to the ... take your family to the theater, take a family of four to the theater and see what it costs you in sales tax for one night just at the movies, just one night at the movies. So these are the things I'm talking about. You're surprised how much sales tax you pay at the... in that year.
SENATOR BRASHEAR PRESIDING
SENATOR BRASHEAR: Forty-five seconds.
SENATOR JANSSEN: So with that, thank you, Mr. Speaker. The 45 seconds I don't think I need. Thank you.
SENATOR BRASHEAR: Thank you, Senator Janssen. There being no further speaking to the amendment, I guess technically you have the right to close or was that your closing, Senator Janssen?
SENATOR JANSSEN: No, no, I'll give a little close here, too. As I said before, we seem to forget, we seem to forget what can happen in this state. And I certainly don't want to come back in a couple of years or maybe within a year and say, gee, we made a big mistake here. Things really turn around. What are we going to have to do? We're going to have to get some more money into this state. I've been here when things weren't so great. And I look, as Senator Chambers looked, I've looked at some of the cuts the Governor is making and why is it always the developmentally disabled? It kind of hurts when we're going to give an income tax to people who can help themselves. Some of these poor people that we're cutting can't help themselves. So this just ... these are some things that I just want you to think about, just think about it a little bit. The next time you buy some merchandise, keep your sales tax. See how much sales tax you pay at the end of the year. Then you look at what a half a percent of that would be and look, if you're in the top end of the or the average size of the income tax reduction and see what that hundred bucks is going to do for you. Go to the movie, take your family out to the movie. You'll probably spend it all, probably spend all that money. I want you to think about this, these things and see if you really can vote against a sales tax reduction as a means of lowering our so-called surplus in this state. With that, I ask for your green vote on this
amendment because I think it's the right thing to do. Let's do something that's right for a change. Thank you.
SENATOR BRASHEAR: Thank you, Senator Janssen. You have heard the closing. The question before the body is the adoption of AM2201. All those in favor signify by voting aye, those opposed nay. Senator Janssen.
SENATOR JANSSEN: Mr. Speaker, could we have a roll call vote, please, and a call of the house.
SENATOR BRASHEAR: The question is, shall the house go under call? All those in favor signify by voting aye, those opposed nay. Please record.
ASSISTANT CLERK: 27 ayes, 0 nays to go under call.
SENATOR BRASHEAR: The house is under call. Will all unexcused senators please return to the Chamber. All unauthorized personnel please leave the floor. The house is under call. Senators Wesely and Witek, the house is under call. Please return to the Chamber. The question is the adoption of AM2201. A roll call vote has been requested. Mr. Clerk, please call the roll.
ASSISTANT CLERK: (Roll call 1 vote taken. See pages 2474-75 of the Legislative Journal.) The vote is 17 ayes, 10 nays on the adoption of Senator Janssen's amendment.
SENATOR BRASHEAR: The amendment is not adopted. The call is raised. Mr. Clerk.
ASSISTANT CLERK: Mr. President, the next amendment is offered by Senator Wickersham and others. It's AM2565. (See pages 2475-81 of the Legislative Journal.)
SENATOR BRASHEAR: Senator Wickersham, to open on your amendment.
SENATOR WICKERSHAM: Thank you, Mr. President. This amendment has, as noted by the Clerk, been signed by a number of individuals and I want to thank you all for your support in
signing it and offering it to the rest of the body. This amendment will call for over the next two years a 5 percent reduction in individual liability for income taxes. It will increase the individual personal exemption credit by $10 per individual, and it will provide for a full deduction on your Nebraska income tax return, not your federal income tax return, but your Nebraska income tax return of the health insurance premiums that you pay if you're a self-employed individual. It also provides for a $40 million transfer from the Cash Reserve Fund to, in part, make the fiscal status come out in an even balance. This amendment is...I would characterize it as a compromise between many other interests but it is essentially... it is a rate reduction that has been sought by the Governor and others in that it will reduce income tax liabilities by 5 percent. It does provide benefits that have been sought by others as well. The deduction, as I've noted for the health insurance premiums paid by self-employed individuals, and an increase in the personal exemption credit. There are many, many Nebraskans that will benefit if we pass ... if we adopt this amendment and then pass the bill. We expect that over the next two years that the reduction in state revenues will be in the neighborhood of $127 million. We have an estimate from the Revenue Department that the reduction in revenues would be approximately $125 million. That is, in my opinion, fiscally responsible. We can do that. We do not need to collect those 125 to $127 million in revenue for other state purposes. It is appropriate that we leave those dollars in the pockets of Nebraskans. lie do not need to put them in the pockets of state government. These are dollars that will be left in the pockets of your friends, your neighbors, your constituents. They are their dollars and they deserve to be left in their pockets. The mix of the methodology for leaving those dollars in the pockets of the taxpayers of the state of Nebraska I hope you will find appropriate because it is a mix and it will benefit many people in different ways. And that is deliberate on the part of the Revenue Committee that is bringing this amendment to you. And if you'll notice, of course, the amendment has indeed been signed by all members of the Revenue Committee and others. it is our recommendation, it is the Governor's recommendation that this is the methodology that we employ to leave those hard-earned dollars in the pockets of taxpayers in the state of Nebraska for the next two years. I would urge your support for
SENATOR BRASHEAR: Thank you, Senator Wickersham. You've heard the opening. Senator Coordsen followed by Senators Schrock, Wesely, and Maurstad to the amendment. Senator Coordsen.
SENATOR COORDSEN: Thank you, Mr. President. I'm breaking new ground for myself I think tonight in that this is the first session I've ever voted for an income tax rate reduction out of committee, and I don't recall ever rising on the floor and speaking in support of an income tax rate reduction. And that is what I'm doing now. The bill in its current form without the Wickersham amendment is for all practical purposes the bill as it existed in the committee amended version. We have been working for some time somewhat diligently trying to ensure that all of the numbers matched. I would be remissed, I think, if I didn't share with you that I am in these flushed times very nervous about transferring any money out of the Cash Reserve Fund because, as Senator Warner had intended, that was to be counter-cyclical, that is money flowed into that in the good economic times and then it was there when revenues dipped to continue state programs in the manner that people had become accustomed to having them provided. But I am, in fact, rising to support a $40 million transfer to the General Fund from the Cash Fund and the other provisions of 401 that would be in 401 should this amendment be adopted. I think that if there's any thought in anyone's mind about striking from this proposal the two-year sunset it would be most inappropriate because as has been said many times on the floor, the projected overcollections are in fact that, projected. If all of the projections are true and the economy continues to boom and the curve of tax receipts continues to tilt upward, then this Legislature will have the opportunity two years hence to either continue this on a permanent basis or continue it in what manner that it might be appropriate at that time. When you sit on Revenue Committee, you have been given the responsibilities of providing for all of the spending of the Legislature by taxing people. Everyone gets the peaches and cream by spending. We get the sour grapes of providing for the money. And with that comes a certain sense of care and reluctance to base long-term changes upon relatively short-term trend lines. This might work and it might be, and I would certainly hope it would not be, a situation arising in the
second half of this biennium where we may have to take another look at the inappropriateness...
SENATOR BRASHEAR: One minute.
SENATOR COORDSEN: ... of reducing income tax rates. Bear in mind that when you raise taxes because of declining revenues you are always going to be raising taxes on a distressed economy when people are losing their jobs, when profits are down in companies, when all of those negative things that happen in a recession happen. So tax rates are always counter-cyclical also and most painful and bring a great deal of discredit upon this body simply because we may have to do that. So while I. support this, I support this with some trepidation and some concern that we may be going one bridge too far in providing this great of a tax cut, but it does seem appropriate tonight. Thank you, Mr. President.
SENATOR BRASHEAR: Thank you, Senator Coordsen. Senator Schrock, to the Wickersham amendment.
SENATOR SCHROCK: Mr. President, members of the Legislature, I thought I'd speak once on this issue; and I'll take that opportunity at this time. I said at the start of the session, considering the excess revenue the state had, that I thought a modest income tax would be appropriate. I do think this is excessive. I would have supported the 3.5 percent. I am a farmer and I think it behooves us to proceed cautiously. I can tell you last summer corn sold for $5 a bushel. I didn't have any to sell. I'd sold out, but it did sell for $5 a bushel and it did help the farm economy for those that had corn for sale. I can tell you I checked at my local elevator this morning and the price was $2.55. Do you think the revenues will continue to be strong? I don't know, but I'm not willing to take that gamble and so from a strictly ag perspective and sometimes we have blinders on, you know, that the old workhorses used to wear when they didn't want them to see to the side, I maybe have blinders on but I think revenues could decline. Nobody knows. If 3.5 isn't enough, we can always come back next year and make it larger; but I think it would behoove us to proceed cautiously. But it's apparent that you probably have the votes to do this without me, but I did say at the start I'd support a
small or modest income tax cut, but I cannot support a 5 percent cut.
SENATOR BRASHEAR: Thank you, Senator Schrock. Senator Wesely, followed by Senators Maurstad and Cudaback. Senator Wesely.
SENATOR WESELY: Thank you, Mr. President, members. Senator Wickersham, could you walk us through the...
SENATOR BRASHEAR: Senator Wickersham, will you yield?
SENATOR WICKERSHAM: Yes.
SENATOR WESELY: ... the changes that we've gone through on the income tax cut proposal? And I'm a cosigner of the amendment and I'm going to support it, but I'm Just trying to track through the give and take that we've gone through. Original 401, was that ... that was a 5 percent cut, is that what?
SENATOR WICKERSHAM: It was about a 5.5 percent liability cut.
SENATOR WESELY: And then the committee came out with...
SENATOR WICKERSHAM: ...a 3 percent rate cut and a $20 individual credit.
SENATOR WESELY: So we went from 5.5 to 3 and then...
SENATOR WICKERSHAM: Well, there's a difference, Senator, between liability and rates and that's sometimes been a little bit confusing to people. This bill provides for about a 5.5 percent ... does provide for a 5 percent liability cut which is about a 4.38 percent cut in rates.
SENATOR WESELY: (Laughs) Okay.
SENATOR WICKERSHAM: It's a fact. I don't know what else to tell you.
SENATOR WESELY: Okay, all right. Remember, this discussion was to clarify things but (laughter). So then we went with an amendment on the floor that... first off, I think Senator
Maurstad had an amendment which was adopted then...
SENATOR WICKERSHAM: Yes, that was very exciting.
SENATOR WESELY: (Laughs) But we ended up ... where are we at today? Where are we going from to where we're at with this proposal? Where are we at currently with the bill? Is it a 3.5 percent cut? Or we're going up to five?
SENATOR WICKERSHAM: This bill provides for a 5 percent cut in liability from income tax. That's the direct rate reduction, about 4.38 percent rate reduction. Then in addition to that reduction, to that cut, reduction, however you want to characterize it, there is an increase in the personal exemption credit of $10 per dependent per individual and that is a nonrefundable credit, of course. And then on top of that you have full state of Nebraska deduction for your self-employed health insurance premium. Currently on your federal return, you're allowed to deduct 40 percent of that; and, of course, that works through as a Nebraska deduction. Next year you'll be able to deduct 45 percent on your federal return and that also will work through as a Nebraska deduction. Over time, the federal deduction is going to increase but since we're only in a two-year time frame, I don't think it's worthwhile to discuss further than that. But this bill simply for the self-employed health insurance premium deduction just, if you will, fills the gap. The portion of that premium you were not able to deduct on our federal return you will be able to deduct on your state return.
SENATOR WESELY: Okay.
SENATOR WICKERSHAM: And if you want to be confused even further, I'll talk to you about itemized deductions.
SENATOR WESELY: (Laugh) In terms of the rate reduction or liability reduction, whichever, the current form of 401 is what as opposed to what ... you're talking 5 percent. Excuse me.
SENATOR WICKERSHAM: The current form of 401 is a 3.5 percent rate reduction which works out to be a little bit more than a 4 percent, it's a little over 4 percent liability reduction.
SENATOR WESELY: Okay. So we're going from a 4 percent to a 5 percent liability reduction and a rate reduction from 3.5 percent to 4-plus percent. Is that right? Do I have that, am I flowing?
SENATOR WICKERSHAM: Yes, I think you've stated that correctly.
SENATOR WESELY: Okay. Thank you. That was helpful to somebody I hope.
SENATOR BRASHEAR: One minute.
SENATOR WESELY: I am going to support this because, well, first off I was asked to by the Governor. But second off, because I'm tired and confused. But I would like to talk eventually about something ... you know, George Coordsen talked about this and I want to... I think we ought to revisit some of the things he pointed out because I'm rising in support of something I didn't think I possibly would from the start of the session. But I do think there's been a good faith effort by the Revenue Department and the Governor to try and reach a compromise. Anytime that happens I think you try to work with one another to reach a consensus if possible and so I'll revisit that issue later. Thank you.
SENATOR BRASHEAR: Thank you, Senator Wesely. Senator Maurstad to the amendment.
SENATOR MAURSTAD: It was an exciting time when that amendment was adopted a couple of weeks ago because I think it gave some hope that we were actually going to have an income tax cut this year, with the support that was shown by putting two good ideas together: The original bill, as it was introduced, with the personal credit that was added by the Revenue Department. From my perspective, I still think we could afford that and I know that others would disagree. But it was an exciting time that we would think that we would be able to provide that type of tax relief to the citizens of the state. But we've come a long ways just in that short period of time, and I rise in support of the compromise amendment that Senator Wickersham has brought to the Legislature this evening. I said from the very beginning that
we could increase state aid, and we have done so significantly to a far greater extent than what was being looked at at the beginning of the session, about $143 million total. We were...at the beginning of the session, the discussion was all about $100 million. I supported that. As I said, we could do that in partnership with an income tax cut also. And so I think that this ... this is a good amendment and that it will allow both of those things to occur. I would rather see a permanent rate reduction. I think that's better public policy. I think it is ... provides a better message to our taxpayers, but recognize that in the process that we have to agree to a two-year rate reduction on the entire package, and we can address the permanency next year or the year after. I appreciate very much the inclusion of LB 24, the concepts of LB 24, relative to the ability to deduct health insurance premiums that aren't deducted at the federal level off one state income taxes for self-employed individuals. It's a very targeted tax reduction to those small businesses and individuals in our state that can use it: Small businesses, mom and pop shops that are in small communities, even in larger communities, farmers and ranchers. This will enable more Nebraskans to be able to afford and be able to secure health insurance and take care of themselves and their families, and I think that that is certainly meaningful and appreciate the inclusion of that in this amendment. Somewhat along the same lines of caution that Senator Coordsen raised, I would also like to raise, only I would like to raise it from the spending perspective. That in addition to being cautious about the amount that we should reduce the flow of revenue into the State Treasury, we should also continue to be diligent relative to the increases in state spending. And I believe that this amendment before us will encourage us to do that. And I hope that in the coming years that we continue to have that...
SENATOR BRASHEAR: One minute.
SENATOR MAURSTAD: ...diligence and caution on the spending side as well as the revenue reduction side. I'm very pleased to see as many cointroducers of this amendment and hope that everyone feels as I do in that it is a good compromise: It's a compromise that can be supported; it's a compromise that is affordable; it's a compromise that works along with significant
increase in state aid to local governments, and would urge my ,colleagues to adopt the amendment and advance LB 401 to Final Reading. Thank you.
SENATOR BRASHEAR: Thank you, Senator Maurstad. Mr. Clerk, matters for the record.
CLERK: Mr. President, thank you. Enrollment and Review reports (LB) 875 and (LB) 875A to ... as correctly engrossed. Senator Chambers, a series of amendments to LB 752A to be printed. Senator Beutler to (LB) 752A. Senator McKenzie to (LB) 865. (See pages 2481-87 of the Legislative Journal.) That's all that I have. Thank you, Mr. President.
SENATOR BRASHEAR; Thank you, Mr. Clerk. Senator Cudaback, to the Wickersham amendment, followed by Senators Chambers, Wesely, Tyson, and Hilgert. Senator Cudaback.
SENATOR CUDABACK: Mr. President, members. For years and years I said, no, no, no to a tax ... this type of a cut. But I guess with ... money talks, as we all know, and after you have 50 million, 100 million, 150 million, 200 million, 250, 300 ... whatever, the price goes up, I guess you'll say almost yes to anything. Almost yes to anything. So I guess that's why I'm backing this amendment. And I guess, if for no other reason, I'm riding with the Governor in the morning to Gothenburg with an airplane, so I want to make sure I land with the airplane. So I guess that's another reason to make me vote for this bill. I relinquish my time to... I said I wouldn't take all my time. I relinquish the rest of my time to Senator Landis, please.
SENATOR BRASHEAR: Thank you, Senator Cudaback. Senator Landis, you have four minutes.
SENATOR LANDIS: Thank you. I won't use it. My name is on this amendment. I'm going to vote for this amendment. It is not my favorite or my preferred way of dealing with this. When there is a compromise, you have to get something, and the cost of getting something is giving something. And what I'm getting out of this is the temporary nature of this tax increase, rather than it's permanency, and I'm giving in the nature of the tax that we're cutting and the amount that we're cutting it. Two
things distinguish this amendment in my estimation. Number one.. the underlying tax itself that's being cut is the income tax, and what is the distinguishing characteristic about the income tax compared to every other tax? It's the only tax that we collect which is based on the ability to pay. It's the only one where we ask more of those who have more. Every other tax that we have is regressive. This is our only progressive tax. Second thing about this amendment: Why is it that the income tax is the tax that we're picking to cut? Out of the options that we have, why is it the income tax? It's because it's the tax who asks the Most of those who have the most, that's why it's here. It's because it's progressive that this is the tax that's being cut. It's because this is the tax that asks the most of those who have the most, and those are the folks who know well enough this system to be out there in force, well-organized, demanding, serving as a voice, and they will be there in two years. They are a powerful political force in this state, and it is the other voices that are drowned out. Those two things are exactly the reason that this is the amendment that's here, and that is the income tax is a progressive tax, and that's why it's the one that's being cut. That's an unfortunate fact. If I had my preference, I'd tell you what I'd do. I'd take the car tax, which is about 150 million bucks, and I would reduce it by half for everybody. You could take 75 million bucks and you could cut everybody's care tax in half. That's the kind of cut people really notice. We would get letters of praise from all kinds of people if we cut their car taxes in half. Why don't we do that? I'll tell you why we don't do that, because it's spread out to too many people, because those people aren't organized, because they don't have a voice like the Chamber of Commerce. They don't have a voice that tells Us it's for the economic development benefit of the state. So we're going to take that 75 million bucks and we're going to give 40 percent of it to 3.5 percent of the taxpayers. Why? Because it's a progressive tax,...
SENATOR BRASHEAR: One minute.
SENATOR LANDIS: ...and that's why it's the one that has to be cut. I'm going to do it because I get something, but I have to give something as well, and I've got to tell you, it's a little painful to give, particularly based on who gets out of this
SENATOR BRASHEAR: Thank you, Senator Landis. Mr. Clerk.
CLERK: Mr. President, Senator Chambers would move to amend Senator Wickersham's amendment. (FA413 appears on page 2487 of the Legislative Journal.)
SENATOR BRASHEAR: Senator Chambers, to open on the amendment to the amendment.
SENATOR CHAMBERS: Mr. President, I don't know if this is on your gadgets yet, but I will tell you where the amendment will be and then I'll tell you what it will do. On page 2, line 9... I should have said, Mr. President, wizards all. I think the wizard is working. Page 2, line 9 and page 7, line 1, I would strike "years 1997 and". I would insert "year". And that would read "for the tax year 1998". Senator Wickersham scratched somewhere near his head. Members of the Legislature, 1 was in my office doing some work as quickly as I could and I heard Senator Schrock say something that I wish more people would have paid attention to, and by that I mean taken it to heart so that they'd vote against this bill. There has been a short range, in my opinion, spurt in the economy and it's going to fall. It's like the geyser, Senator Wickersham, with this difference: It goes up, but Old Faithful is called that because it does it on a regular basis and you can set your watch by it, or at least your hour glass or maybe your sundial. But with what people are banking on in this instance is a hope that everything that exists today that they like is going to continue to be that way. I would like to get some help before I proceed from our newest member, the Honorable Senator Raikes.
SENATOR BRASHEAR: Senator Raikes, will you yield?
SENATOR RAIKES: I will.
SENATOR CHAMBERS: Senator Raikes, this is the first opportunity I've had to engage you in discussion on the floor, and I'm flattered to have that opportunity on a matter such as this because you have some experience that the rest of us have not had. Did you or did you not... and you're allowed to take the
Fifth here if you choose... serve on that forecasting board which I call the "psychic forecasting board"?
SENATOR RAIKES: I did, Senator.
SENATOR CHAMBERS: How long did you serve on the board?
SENATOR RAIKES: I believe it was about three years.
SENATOR CHAMBERS: Did you, during that time, have a chance to get a pretty good idea of the methodology them employed in making their projections and arriving at their conclusions?
SENATOR RAIKES: Yes. (Laughter.)
SENATOR CHAMBERS: Senator Raikes, what was the largest miscalculation that the board made while you were a member?
SENATOR RAIKES: You're talking about the board's calculation, not my own?
SENATOR CHAMBERS: Yes, the board's.
SENATOR RAIKES: I think it was much less than my own.
SENATOR CHAMBERS: What was the largest one that the board made, if you can remember?
SENATOR RAIKES: Well, I really can't.
SENATOR CHAMBERS: Was it more than a million dollars off?
SENATOR RAIKES: I'm sure it was.
SENATOR CHAMBERS: More than ten million dollars off?
SENATOR RAIKES: Probably.
SENATOR CHAMBERS: More than 20 million dollars off?
SENATOR RAIKES: Likely.
SENATOR CHAMBERS: Now, are you aware that the projection that they are dealing with ... there was more money coming in than was projected to come in this last time around, and I know you're aware of that from reading about it,, not having participated. Do you know by what amount they missed on that projection from reading?
SENATOR RAIKES: I think that currently it's estimated at 58 million, is that right?
SENATOR CHAMBERS: I like that. Let me ask you a question: By what means does the forecasting board make a projection that is that far off the mark, if you know?
SENATOR RAIKES: Well, I am no longer on that board, and, you know, that may be one of the reasons. They needed better people. The techniques, at least at that time ... and I'm not familiar with currently how it's done ... but at that time, there was an estimate from the Legislative Fiscal Office and one from the Department of Revenue which served as parameters to begin with, and then we board members lent our wisdom beyond that.
SENATOR CHAMBERS: And came up with a $58 million miscalculation?
SENATOR RAIKES: Well, I can't claim credit for that one, but...
SENATOR CHAMBERS: Well, not you. Now I want to ask you this: Is it possible that a miscalculation could be made in the opposite direction and that they could overestimate how much revenue was going to be realized by the state?
SENATOR RAIKES: If you go back to my term on the board, that was a very common occurrence.
SENATOR CHAMBERS: You thought they would bring in more than they actually did?
SENATOR RAIKES: That's right.
SENATOR CHAMBERS: Thank you, Senator Raikes. You've been very helpful.
SENATOR RAIKES: Well, I'm pleased to be.
SENATOR CHAMBERS: Members of the Legislature, not only are we dealing with the calculations that the psychic board makes, we are dealing with how the economy performs. And if any of us could predict with any degree of precision ... and a prediction is determining before something happens what it's going ... how it's going to take place ... we wouldn't have to serve in the Legislature, we wouldn't have to work another day, even if the economy was going to downturn and we could predict that... it's in a sporting event. You should know which one is likely to lose just as well as the one likely to win. And what everybody, in making this political decision ... and that's all that it is ... is counting on is that everything is going to be turning up rosy, at least for the time they're in office for this term. Now, if something does happen that results in a downturn, you all have promised an income tax cut at the rate contained in Senator Wizard's amendment, Senator Wickersham's amendment, for two years. What my amendment does is to make that for one year, but not the coming year. It gives us a gap before this falls, and if something happens before then and the money's not available, you do not have a situation where you gave a cut and then you have to take it back. Let me ask Senator Wickersham a question, because I think I'm getting ahead of myself and he's more of an expert on this than I am.
SENATOR BRASHEAR: Senator Wickersham, will you yield?
SENATOR WICKERSHAM: Yes.
SENATOR CHAMBERS: Senator Wickersham, your amendment would allow this cut to be in effect for two years?
SENATOR WICKERSHAM: That's correct.
SENATOR CHAMBERS: If, after the first year or during that first year, there was a sudden terrific downfall, downturn in the economy, and the state could not afford to keep that cut in place, would the state keep it in place anyway because this amendment said it would be there for two years?
SENATOR WICKERSHAM: We will be...
SENATOR CHAMBERS: Or would there be an adjustment?
SENATOR WICKERSHAM: We will be in session next January, Senator, and that would be a decision for this body.
SENATOR CHAMBERS: What do you think we would do if the money were not there to fund a cut for another year? Do you think we would just...
SENATOR WICKERSHAM: If the downturn were....
SENATOR CHAMBERS: Drastic.
SENATOR WICKERSHAM: ... drastic, I think this body has always shown itself able to do what is responsible and appropriate for the citizens.
SENATOR CHAMBERS: And that would mean you would not maintain that tax cut for that coming year, is that right?
SENATOR WICKERSHAM: That's my belief, Senator.
SENATOR CHAMBERS: Now, wouldn't it be better to see what happens before you let the cut take effect and see if there'll be enough money for it?
SENATOR WICKERSHAM: Senator, we have already accumulated enough dollars to pay for the first year.
SENATOR CHAMBERS: It ... can we do that and restore the money for the developmentally disabled, because that's where the Governor ... that's how the Governor getting...
SENATOR WICKERSHAM: Senator, yes.
SENATOR CHAMBERS: ... money to fund thing that we're doing?
SENATOR BRASHEAR: One minute.
SENATOR WICKERSHAM: Senator, I think you're asking about
approximately three and a half million dollars. Yes, there is room to do that.
SENATOR CHAMBERS: So we can override that veto?
SENATOR WICKERSHAM: You could override that veto and conceivably still make the status sheet balance, yes.
SENATOR CHAMBERS: And if we're... if we have enough money to give these rich people all that money they don't need, certainly we ought to be able to do something for the developmentally able who are in that plight through no fault of their own?
SENATOR WICKERSHAM: It seems to me that you're making a highly enabled argument for a vote that we'll take later.
SENATOR CHAMBERS: Senator Wickersham, that's why I call you "the wizard". You're so perceptive.
SENATOR BRASHEAR: Thank you, Senator Chambers. You have heard the opening on the Chambers amendment to the amendment. Senator Wesely, followed by Senators Tyson, Hilgert, Wickersham, Maurstad, Chambers, Withem, and Will. Senator Wesely.
SENATOR WESELY: Look likes interest is increasing on this issue. Let me follow up in response to Senator Chambers' points and Senator Schrock. I think Senator Coordeen. Also the point Senator Raikes was making. You know, this is my 19th year. I've been through a lot of these cycles, and I've seen some things that I think are, hopefully, valuable to you. One of the things ... one of the lessons I have learned ... everybody talks about running government like a business, but government is not a business in a number of ways, and one of the reasons is there are differences in good times and bad. Now, there are some similarities. In good times, like we have right now, both business and government have our revenues go up, people are buying things, they're spending money, sales tax, revenues are up, income tax revenues are up. Good times bring us revenues, whether you're business or government. It's when you get to the bad times that times change between what a business sees and a government sees. When the bad times come, a business will see demand drop, there won't be as much demand for building that
house or selling that product or selling that service. They will see revenues drop. Government has that happen as well, but the business ends up with a demand drop and usually reduced reduction, perhaps downsizes, cuts back, and has the revenues and their expenditures hopefully balance out. They don't want to lose money, they still want to make a profit. But in government, when the hard times come, our revenues drop off, as it does in a business, but our actual demand goes up. It's not because. demand goes down, it's because of hard times that government demand goes up. That's where you see demand for ADC coverage and welfare go up, that's where you see Medicaid costs go up, that's where you see other Health and Human Services costs go up, the areas that I work in, year in and year out. One of the reasons that we're able to have the budget surplus that is allowing us to do the things that we're talking about, in terms of an income tax cut and property tax relief, is because we have had significant savings over what we were projecting would be spent on ADC, welfare, Medicaid, in those areas. Also in special education. Those savings, over projections, are significant and it's because of the good times so we haven't had some of the demand, it's also because of some of the reforms we've passed. But when the bad times come back, so will the demand. And we'll be sitting here ... and it will happen. The cycles of the economy happen... Senator Raikes can talk about that better than anybody I'm sure, but there's a cycle to the economy. The good times will be followed by the bad, the bad by the good, and you just have to ride out the bad and hope and wait for the good, and then with the good, wisely husband your resources so that you're ready for when the bad times come back again. And by that, it seems to me that we need to recognize in the good times we should save, so that we're ready for the bad times. 'And that's what I hope that we eventually reach a conclusion on. I'm ... again, I'm going to support the amendment and the bill off of Select File, but it's with great trepidation because it seems the other course of action would be to allow that reserve to build up, not feel that you have to send it back out. We did it in '89, we did it in... I think it was...'80, '81, sometime back there and back in '74. You build up the reserve in the good times and you feel like you got to send it on out ... and what happens is, the bad times come and we get caught ... we get caught. So what you end up doing is you reduce taxes in the good times when the economy
and individuals are best able to say. It's good times. We're employed, the economy's strong, that's when you reduce taxes. You turn around, and when the bad times come, because we've reduced taxes, our revenues are off, our bad times come, our demand comes up for services, that's when we have ... are forced into a situation to increase taxes. That's the worst time to increase taxes. When the economy goes bad, when times are tough, to turn around and raise taxes on people only hits them twice as hard because they're feeling a hurt because of the economy. It seems to me...
SENATOR BRASHEAR: One minute.
SENATOR WESELY: ... that there's an advantage in taking a different approach was to have more stable tax rates, that right through the good times, the bad, the like, where you save during the good times and then you have the resources during the bad so you don't have to turn around and increase taxes on individuals when they're least able to pay it. It also means that when you cut back during the bad times, when you don't do the deferred maintenance, when you don't do some of the things that need to be done, that when the good times come you don't miss that opportunity to make that investment so that you take care of those problems and have a return on that investment. When you have the resource, not get yourself in such a hole when the bad times come, you can't do anything. So, I just think that cycles have been there, we've seen them in the state, we're in a good time cycle now ... let's be careful about what we can do so that when the bad times come, and they will, in the next few years, that we're not hurt. Thank you. I
SENATOR BRASHEAR: Thank you, Senator Wesely. Senator Tyson, to the Chambers amendment to the amendment.
SENATOR TYSON: Thank you, Mr. Speaker, members of the body. "It was the beat of times. It was the worst of times." Now, that's the opening sentence of a famous story by a famous author, and those of you who do not recognize it may apply to Senator Eternity. That's why I refer all of these difficult questions to Senator Chambers. The easy answers, I do not refer to him. The Chambers amendment is going the wrong way. Senator Maurstad eloquently outlined the reasons for a tax cut,
mentioned the term of that tax cut in passing. And the problem with the Chambers amendment, which I wish to recommend to all of you to vote "no" on, is that economic decisions are always made long-term. One of the obstacles to economic development in the state of Nebraska is the fact that we have a relatively high income tax. Other states surrounding us have lower taxes and are more amenable to welcoming new businesses. Senator Landis pointed out that you give some to get some. I am a cosponsor, as is Senator Landis, of this bill, as I was a cosponsor of the sorry. The term of this amendment, 2565, is for two years, and all that does is alter economic decisions. If you're going to take some profit, take it in 1997-1998, because in 1999, the door will slam. This is not an inducement to economic development, but it's what we have agreed to on this ... on the Wickersham amendment, and it's what we should all vote for. The Chambers amendment for one year does nothing, whether it be '97 or '98, you might as well make it 199 to the year 2000. What goes up will come down. It will also go up again after that. When that time comes, we will have to operate to meet the fluctuations of the market and the revenues of the state of Nebraska. I would say to this body, there is an old couplet, "it is better to have loved and lost than never loved at all." We should vote for the Wickersham amendment, and I ask all here to vote against the Chambers amendment as being of no point. Thank you.
SENATOR BRASHEAR: Thank you, Senator Tyson. Senator Hilgert, to the Chambers amendment to the amendment, followed by Senators Wickersham, Maurstad, Chambers, Will, Wesely, and Jensen. Senator Hilgert.
SENATOR HILGERT: Thank you, Mr. President, members of the Legislature. Last ... when we voted on 806A, I had an amendment that I pulled it and I talked about budget constraints and so forth. And then the next day I was talking to some people, and someone was ... a couple senators I heard were confused. Now, why did you speak against it and then you voted for the thing? And the answer is fairly simple. It's because I gave my word that I would, and I don't go back on my word. And I didn't think that that probably needed to be explained, perhaps, but I thought I would. And it lead me to put my light on on 401, not directly related to the Chambers amendment, but I thought I'd tell you
why I support it and why I prioritized. I was going I to prioritize raising the unemployment compensation level, we re 49th out of 50 states. It's pretty embarrassing. it if wasn't for the deep south, I think we'd be 50th in most of those categories. But anyway, that's beside the point. I thought ... maybe we could bring it up to, maybe, 37th out of 50. Pretty radical move. But I was the last senator to prioritize a bill. Boy, don't let that happen. Raikes, don't let that happen to you. Prioritize early, because I got a call on the phone from our Governor and he said, no one has prioritized the income tax cut yet. Senator Hilgert, would you be interested in doing that? And I said "yes". I said "yes". I was all set to do the unemployment compensation because, of course ... Senator Maurstad's correct. You know, this does help some economic development. I would differ about the having people be able to buy insurance because this is a deduction. You had to have insurance in order to deduct it, but that's beside the point. Our taxes generally are too high. Our government is too large. We could be more efficient. We could provide better and more efficient services at a cheaper rate. I believe that. We can make...you know, cliche being aside, the good life better. So, I really didn't sell my soul or anything to have this prioritized, LB 401. Without it, we wouldn't be discussing it here today without that priority at that time. And I was also assured by different parties that we'd all come together and work out a nice compromise on raising the unemployment compensation level. Well, as you know, that didn't happen. I hope it does next year. I hope maybe some of the individuals that are most interested in organizations, that are most interested in LB 401, can considering negotiating and compromising and getting together for a bill that would raise unemployment compensation from the bottom, bottom of the heap, bottom of the heap, to maybe ... all the way up to maybe top 37. Maybe 36. 1 hope they remember next year, and maybe that we'll work together on something. A little bit more aggressive than the "compromise" that was attempted this session. So I haven't been all that chipper during this debate. Some of you noticed that and I thought I'd explain why. But I believe my word's important, and I gave my word that I would support this bill, and I will, and I encourage the membership to vote against the...
SENATOR BRASHEAR: One minute.
SENATOR HILGERT: ... Chambers amendment, to adopt the Wickersham amendment, and advance the Revenue Committee's LB 401. Thank you.
SENATOR BRASHEAR: Thank you, Senator Hilgert. Senator Wickersham.
SENATOR WICKERSHAM: Thank you, Mr. President. I rise in opposition to Senator Chambers' amendment. I'm sure that's no surprise to anyone here. Senator Chambers indicates that we ought to collect the money first and then be able to provide for the rate reduction. We can reasonably expect that the revenues that we're projecting are going to be there. We do have the resources to support the reduction, the credit, and the deduction that are provided for in the amendment. I'm not as fearful as Senator Chambers is of the immediate future, that is the next two years. I did have misgivings about the next four years and have expressed these earlier when we were debating this bill. But we are in a very sound, fiscally responsible position if we adopt the amendment that was proposed to you this evening for a two-year reduction in rates, an increase in the personal exemption, and full deduction for your self-employed health insurance. That is fiscally responsible, it is possible to do, it will benefit the citizens of the state of Nebraska. There's no need to knock when you're out and delay. And in fact, that would produce some of the effect that Senator Tyson mentioned. That is, people simply making uneconomic decisions to take advantage of some perceived income tax advantage. That would be totally inappropriate, and I don't think we should ever adopt policies that will, in fact, induce people to do...to make those kinds of decisions. So I would oppose Senator Chambers' amendment and hope that this body will reject it once it comes to a vote.
SENATOR BRASHEAR: Thank you, Senator Wickersham. Senator Maurstad.
SENATOR MAURSTAD: I rise in opposition to the Chambers amendment. Actually, the fiscal board has been very accurate in their projections. Most of the surplus that has accrued this
time they have accounted for as they meet on a quarterly basis, and have made the appropriate adjustments. They, over the course of the last number of years, have been on target. A lot of the surplus that we will carry over from the current biennium to the next biennium is as a result of what Senator Wesely mentioned this evening and Senator Land13 has mentioned before and I have mentioned in that we were looking at overprojections for certain aspect of the budget. So we ended up not spending as much as we originally thought. Now, the next two years include an average revenue growth of about 5.1 percent. Our five year average, current rolling five-year average is 6.5 percent. So we're not looking at a revenue projection at this point that is even near what we're currently bringing in, a point and a half less. The 15year average is 5.5 percent, so we're about a half a percent below the 15-year average of revenue growth. So these are not wildly determined numbers. These are numbers that I believe are still on the conservative side, and the fiscal board are not a bunch of nitwits who get together every now and then, and after rolling the dice or throwing darts or doing whatever, some people think they must do to come up with their projections, but are, in fact, sound, esteemed economists that continually watch all aspects of our economy to try to determine what, in fact, the appropriate numbers should be for state government to use to adequately plan. And they're adjusted on a quarterly basis, so we are continually updated with current information. Now, I think this is an excellent way for state government to try to project what it's revenues are. So I certainly oppose the one year. As I indicated before, I feel the rate reduction, from a policy point of view, it's more sound to do that on a permanent basis. I don't want there to be any misunderstanding relative to the health insurance deduction change that is long overdue. There is inequity that currently exists between corporations that can deduct 100 percent of their health insurance costs and the sole proprietor, small business, that can't. The federal government has finally recognized that and are phasing out, over the course of about the next decade,...
SENATOR BRASHEAR: One minute.
SENATOR MAURSTAD: ... this inequity. It's time that we do the same in Nebraska, at least that we recognize it. And the
incentive of being able to deduct 60 percent of your health insurance premiums, I believe, will, in fact, create an environment where more people will purchase health insurance, and that is good public policy, and that's why it's important that it's in this bill. So at this time, I just wanted to indicate that I have trust and confidence based on their performance that the forecasting board is doing a good job and that the numbers that we're using for revenue growth for the next two years are on the conservative side. They are under both the five-year and 15-year average, and I believe can be sustained, even if the economy dips a little bit.
SENATOR BRASHEAR: Time. Thank you, Senator Maurstad. Senator Chambers, to your amendment to the amendment.
SENATOR CHAMBERS: Thank you, Mr. President. And I'd like to ask Senator Maurstad a question about his last comment, because I'm not sure if I understood. Did you say ...
SENATOR BRASHEAR: Senator Maurstad, will ...
SENATOR CHAMBERS: Oh, excuse me.
SENATOR BRASHEAR: ...you yield?
SENATOR MAURSTAD: Sure. Yes.
SENATOR CHAMBERS: Did you say this cut could be maintained if the economy dips a little bit?
SENATOR MAURSTAD: Even if the economy dips some. Yes.
SENATOR CHAMBERS: But you said "a little bit".
SENATOR MAURSTAD: Yeah. A little bit.
SENATOR CHAMBERS: Suppose it dips a whole lot real suddenly, it could still be sustained for two years?
SENATOR MAURSTAD: If that occurs, as Senator Wickersham indicated, we will be able to react accordingly and make the necessary policy decisions that could react to what you're
suggesting may happen.
SENATOR CHAMBERS: And how do you think we would...what kind of adjustment would we make? Do you think we'd do away with a cut for the following year?
SENATOR MAURSTAD: I think that we could look...would have to look at changing the revenue that we bring in, and I think we would have to look at whether or not we could sustain the close to double-digit growth in state spending this year.
SENATOR CHAMBERS: If the downturn was severe enough ... and as Senator Wesely and maybe it was Senator Schrock pointed out, when it's necessary to raise taxes, it's done at a time when the economy is down because people are not doing so well themselves. So if not much is coming in, not as much is coming in, and the state has promised this cut, it's not going to have as much money to make the cut with. As Senator Wesely pointed out, there will be greater demands on the government because of people's depressed economic situation. So if there's less coming in and the government has to spend more, how is it going to continue to sustain a tax cut at this rate, if it can be done? If it can't, then that's the answer that I'm looking for. But if it can, that's what I'm asking, how it could under those circumstances?
SENATOR MAURSTAD: First of all, we raise our revenue from more than one source. And so not all of it comes from the income taxes. We have a diverse revenue stream, so only a portion of our revenues come from this area. I believe it could be sustained. It's at a level that is certainly not ... you know, it's less than what we're providing back to local governments, for example, this year in state aid. Maybe we would have to look at some adjustments in state aid. We'd have to look at whether or not some of these new spending increases would have to be curtailed. We'd have to go through our priorities on the spending side to see if we could continue to fund all of those things. The converse of what you're indicating is happening this year. Times are good, and we're spending, I believe, in relationship to the revenue that we anticipate on bringing in. And...
SENATOR CHAMBERS: And if we... if there has been a miscalculation, we have spent way too much money, then, because we're spending money based on something we think is going to happen that may not. Is that what you're saying?
SENATOR MAURSTAD: That's correct.
SENATOR CHAMBERS: And if that has happened and we cannot sustain the spending level but we've committed ... made certain commitments to these political subdivisions and the schools, you're saying we should just go ahead and slash those commitments?
SENATOR MAURSTAD: No, I didn't say "slash".
SENATOR CHAMBERS: Well, cut.
SENATOR MAURSTAD: I said you...
SENATOR CHAMBERS: Should we cut them?
SENATOR MAURSTAD: ..can manage ... you can manage the budget. Budgets are to be-managed. Budgets shouldn't manage us.
SENATOR CHAMBERS: Is that where we should make the cuts, though, I'm asking you. In those...
SENATOR MAURSTAD: We will...
SENATOR CHAMBERS: ... areas where large amounts go.
SENATOR MAURSTAD: In answer to your questions, what I was indicating is we would have to look at all areas of the budget, both on the spending side and on the expenditure side, and go through, again, this whole priority process of what we should be using our resources for.
SENATOR CHAMBERS: But we wouldn't be making cuts like eleven...
SENATOR BRASHEAR: One minute.
SENATOR CHAMBERS: Like eleven dollars and 50 dollars somewhere.
We would go where there are larger expenditures by the state, wouldn't we?
SENATOR BRASHEAR: (Gavel.) Can we have some order in the Chamber, please, for the participants in the discussion.
SENATOR MAURSTAD: Senator Chambers, what we would ... you can't predict what 49 senators would do. one way would be to go after a large dollar item. One way would be to go to last in, first out. Another way would be to go through the entire budget, as the Appropriations Committee did, and try to determine what areas could be reduced...
SENATOR CHAMBERS: But because my time is almost up....
SENATOR MAURSTAD: ... and what areas could not be.
SENATOR CHAMBERS: ... wouldn't you agree, though, after all that is done, this ... a tax cut at this rate could not be sustained if there was a drastic decline, a drastic and sudden decline in the economy?
SENATOR MAURSTAD: No, I would not agree with that.
SENATOR CHAMBERS: Oh. Okay.
SENATOR BRASHEAR: Thank you, Senator Chambers. Senator Will, followed by Senators Wesely, Jensen, Brown, Tyson, and Maurstad. Senator Will, to the amendment to the amendment.
SENATOR WILL: Thank you, Mr. Speaker, members of the body ... Mr. Chair, members of the body. I urge the bodyto reject the Chambers amendment. Now frankly, if you adopt an amendment such as this, we might as well drop the whole idea of LB 401. 1 am, quite honestly, not incredibly pleased with the shape that the amendment, the Wickersham amendment leaves us in on LB 401. 1 argued and have argued for a deduction in the rate ... a reduction in the rate without credit. This amendment does contain a credit. I've also argued for a permanent rate cut, as opposed to one that has a two-year limitation on it. This contains a two-year limitation. Despite those, what I view ,as detrimental aspects of this amendment, I do support the
amendment because I think it is the last, best compromise that we as a body can reach on an income tax rate reduction or a reduction of any time, including the credits. I certainly would hope that the ... as opposed to the ... diametrically opposed to the Chambers amendment, which would reduce the impact of this to one year, I would... I think, if we are going to make a tax change such as this, it ought to be assumed to be permanent. Just as when we make a spending increase, those spending increases typically are assumed to be permanent. There is no difference from a fiscal point of view between those two. Both have an impact on the amount of revenue at our disposal. And I don't see any reason to treat this differently than spending increases that come down very typically every year in the appropriations* bills, in individual A bills that we pass. So for that reason, I frankly am not pleased with that part of the Wickersham amendment. The Chambers amendment just makes that worse. So my statement at this point would be to reject the Chambers amendment, and I think any substantive change we make to whittle back the Wickersham amendment gets us to the point where there are enough things on the table right now that still need to be addressed that if we start chopping away at LB 401, let's forget about LB 401. And I'm not advocating that at all as far as the general idea of LB 401, but I think the Wickersham amendment is as far as I would be willing to go in limiting the tax reduction that I think we can do straight up, we can do it as a rate reduction, we can give money back to the taxpayers. We don't need to mess around with a credit or a two-year limit, but I'm willing to go along with that, but that's as far as I will go. So, if we start whittling it away any more, I would be very hesitant to support an LB 401 that has been hamstrung. I think this Wickersham amendment that I signed on to is the place we ought to end up. We ought to object to and reject any subsequent substantive amendments to this. And if you don't want to do an income tax reduction, don't do it, but don't just whittle away at this one until it doesn't mean anything. So I would advocate the rejection of this and any subsequent substantive amendments to this.
SENATOR BRASHEAR: Thank you, Senator Will. Senator Wesely.
SENATOR WESELY: Thank you, Mr. President, members. I talked about the cycles of the economy and government, revenue and
expenditures and how we have to anticipated bad times ... we never like to talk about it, we always hope things will stay as good as they are. This is about as good as it gets: Low unemployment; revenue's up; economy's strong; state growing. We hope it will last, though I think we all know that it won't. It's the cycle that we've seen before, and many economists estimate that this cycle has gone much longer than anyone anticipated, and it's only a question of time and the time is not going to be much longer that we're going to see it turn back. It's been a long time since we got to a point where we had some extra money, and as a result, we've held off ... one of the things I've been concerned about it deferred maintenance on the university campus. I know Senator Lynch has talked about that for a long time. We've all turned our back on it over these years because times were tough. And we are doing a little bit with the budget this year, but we're still woefully underfunding deferred maintenance and not adequately taking care of that problem. In addition, Senator Tyson knows, and others concerned about mental health, we've underfunded the mentally ill. We are cutting back by a third our regional center beds, and at the same time, hopefully turning some of that into our community-based programs, where we were 49th in the country. I don't know how much we rise in terms of support there, but the budget was cut for the program for the second year, even as it is right now. So our status is ... what I'd like to do is have somebody talk about where we've overfunded something. We always talk about the taxes we pay in Nebraska. They go somewhere, but every program I've looked at seems to be underfunded. The mentally retarded are not overfunded in this state. Our workers are underpaid and the equity was cut out of the budget. Our mentally ill are underserved. We are not overfunding that area. Our Medicaid program is very much benefitted by a low utilization, low reimbursement. We are not overfunding the Medicaid program. The Health and Human Service area that I deal with, I don't know of an area that I can come back to you and say, we've done great, our budget is wonderful. We don't need any more. We're doing fine. In almost every area, we've got a thousand plus people waiting for services that are mentally retarded. We've got mentally ill being ignored and not being served, and that's to our detriment, all of us. Again, what I'm saying is that even in these good times, the budget is not flush. And when the bad times come and we turn around and cut
further, the things that we're not doing at this point adequately will only be made worse. Again, it seems to me that a more stable approach ... and again, I'm going to support this at this point, but my argument is that Senator Chambers is not all wrong, and a lot of us are... I've heard Senator Coordsen and Senator Schrock... I heard Senator Hilgert get up and talk about ... they're in a position where they're moving forward on this very reluctantly. And I am in the same situation: Very reluctantly turning around and supporting the amendment and will support the bill, but it's not without great trepidation. In addition to the fact that you have these cycles and demands that I think we have to recognize, we've also got competing Final Reading issues. LB 806 is passed, but what it's ultimate status is is uncertain. We've got the budget over there and some cuts have come back. How many more will come back, I don't know, but recognizing the ultimate impact of 1114 and the property tax situation and the further cuts in property tax that are forthcoming, you know ... the pattern has been in the past. Again, three other times we we've been in a situation where we were flush...'74, I think it was '79-'80, and in 189. We turned around and reduced taxes or made tax cuts, and in a couple of those times we raised state aid and we paid a heavy price. I think we have to be cautious. We've already taken the step to raise state aid, and how we ultimately pay for it has to be kept in mind. That's why at least the two-year cutoff of this is essential. But again, I'd just... I'd like to see...
SENATOR BRASHEAR: One minute.
SENATOR WESELY: I'd like to see from Senator Wehrbein another... some figures as to how this all fits together. And those that are eternal optimists, no matter what the downturn in the economy we can afford this, I just don't see it. I think experience would lead us to conclude that we've got to be more cautious than that, and I think caution is what I'm urging. Thank you.
SENATOR BRASHEAR: Thank you, Senator Wesely. Senator Jensen, followed by Senators Brown, Tyson, and Maurstad to the Chambers amendment to the amendment. Senator Jensen.
SENATOR JENSEN: Thank you, Mr. President and members of the
body. Yesterday, a group of us went over to the Cornhusker and had lunch with the folks from South Sioux City and from Dakota City. A great bunch of people from a great part of our state, and on our desks they had there ... on our tables they had just a little small sheet, "Priority Legislative Issues". Number one, reduce the state income tax, LB 401. Two, reward those cities who have already reduced staff, cut costs prior to spending limits and tax levy limits. Number three, reward school districts that have already become efficient. Number four, five, and six, and they went in to some other issues. Number five, by the way, was reduce taxes on automobiles and cars, LB 271. You know, one thing about that South Sioux City area and where they are, they're in what you might call the "tri-state area", and across the river to the east is Iowa, where they have dropped their income tax by ten percent. And of course, to the immediate north and west of them is South Dakota, where there's no income tax. And yet, here is South Sioux City trying to compete among those two other states, and they said, number one, reduce income tax. Try to help us out. Nebraska is very fortunate. We have a very diverse economy. we're not just ag anymore. We have ... we're very large in the service industry; we have manufacturing. We're really well-balanced, and we're fortunate in that way so that when we do have corn that drops from five dollars a bushel to two and a half a bushel that perhaps the service economy, which is robust right now, can bring in extra income. We have manufacturing, which is going as hard as they can, and the only thing stopping them from increasing is the fact that they can't hire employees. We really are ... our whole economy then, or the state's economy and the state's revenue are from income tax, sales tax, and property tax. But you know, the first one is your payroll. And it's not just what you make, it's what you take home. And what you take home is then what you buy products with. It's what you take home that. you will then go out and buy an automobile or buy a suit or buy a pair of shoes, whatever it is. And then on those shoes and that automobile, you'll pay sales tax. So it's from the income that you make that you can generate sales tax. It's also from the income that you make that you can pay property tax and you can accumulate property. You can buy a home. You can buy land, farm ground. You can buy a ranch, but first you have to have income before that happens. And here in Nebraska we have many, many people. I think our freedom day this year was
May 9, which was ahead of some of the other states, but we are paying income tax that's been very heavy. Our economy, I think, can support this ... what I think is a modest reduction in income tax and still remain vibrant and strong, and I've very pleased with that.
SENATOR BRASHEAR: (Gavel.) Please, some order for Senator Jensen. Thank you.
SENATOR JENSEN: Thank you, Mr. President. But just to wrap it all up, I'm very pleased with Nebraska's economy. I would have liked to have seen a larger income tax, but I think with what we have and with the various people that have signed on to the bill, I'm very pleased with. I think it gives an opportunity...
SENATOR BRASHEAR: One minute.
SENATOR JENSEN: ... for Nebraska to grow. I think it gives an opportunity for people to take home more of what that they are earning. And so I just urge the body to, at this point in time, not adopt the Chambers amendment, to move on and pass LB 401 in it's amended form, and to then give back to the citizens of Nebraska the hard-earned dollars that they are earning. Thank you, Mr. President.
SENATOR BRASHEAR: Thank you, Senator Jensen. Senator Brown.
SENATOR BROWN: Mr. President, members of the Legislature. I rise to support the Wickersham amendment... I am one of the cosponsors of the Wickersham amendment ... and to oppose the Chambers amendment. I agree with Senator Wesely in some ... in one of the things he said about what we should do when we have money, and he spoke about deferred maintenance, and I believe that we should do those things that we have deferred, and that is certainly something that I think is important. The other thing that I think we should do is to cut our income taxes. I ... some of you may remember that I sponsored the amendment which replenished the cash reserve fund at the end of last year, and our cash reserve fund was at zero. And I share with Senator Coordsen the commitment to having a cash reserve fund in the case of a downturn. I tend to be very cautious about financial matters, but I also think that you have to have a reasonable
amount. And I think we will still, even with a transfer, have a reasonable amount that can cushion us in the downturn. But the reason that I support an income tax cut is that... if you look at what's happened in our economy, we are having growth for the first time in 100 years. Real growth in the state of Nebraska. During the past five years, we have had seven times the growth that we had in all of the 1980s. And that growth has been throughout the state. Forty-eight of the 93 counties have experienced population growth in the 1990B, while in the 1980s, only three experienced population growth, and it was all from within...pretty much from within the state. We are now experiencing real population growth, and I think an income tax cut will further that. It will continue that. It will help us in relationship to the other states in our area: Iowa, which has just Cut their rates by ten percent; South Dakota, that does not even have an income tax. Half of the states have cut income tax in the past two years to spur economic growth, and a study of states who've cut ... who have cut taxes during the 1990s, compared to those ten states who have decreased taxes have found that the tax cutting states had healthier budget balances; their reserves average 7.1 percent of state expenditures versus 1.7 percent for the tax raisers. Their bond ratings were higher, their economies grew 33 percent over the five-year period, six points higher than the tax hiking states. Income for families of four grew $1600 more in the tax cutting states than did that of families who live in states who raised taxes. And the tax cutting states gained 1.84 million jobs, double the national average. And that's the thing that we need to be aware of is that cutting the income tax can have a very positive impact. And even though I'm cautious about the amount of money that we have right now, I think that you have to ride the horse that got you here, and the horse that got us here, I think, are some changes that we have made that have really helped our economy grow, and I want to further that growth. And I admit that part of my ... the reason that I feel this way is the nature of my district. The district that I represent is a relatively high-income district, and so an income tax cut will help them. But I also know that they are the people who create jobs. There is a great deal of job creation that comes out of my legislative district. I talk to people who are recruiters who are trying to .get people...
SENATOR BRASHEAR: One minute.
SENATOR BROWN: ... to come to the state of Nebraska to fill some of the jobs that we know are available here and to create that real growth that I think is so important. And they say that the single issue that they have to struggle with is our income tax rate. And so I think that it's an important thing that we do. I strongly support the Wickersham amendment. I, too, would have preferred a rate reduction that was permanent, but I think that this is doable and it is doable, and still for those of us who are cautious, we can stand it. It doesn't upset our stomachs too much. Thank you.
SENATOR BRASHEAR: Thank you, Senator Brown. Senator Tyson.
SENATOR TYSON: Am I still the last light? Then I'll waive off, then, for the question.
SENATOR BRASHEAR: Senator Tyson waives off. Being no further speakers to the amendment to the amendment, the question before the body is the adoption of the Chambers amendment to the amendment. All those in favor signify by voting aye. Those opposed vote nay. Mr. Clerk, would you please clear the board. Senator Chambers, apologies from the Chair. Would you like to close on the amendment to the amendment?
SENATOR CHAMBERS: When you said that, I was three blocks away .from here. (Laughter.) I was passing one of those lobbyists office, and I said, that sounds like Senator Brashear's voice, because when he read off that list, there were enough people speaking for me to have run three miles and gotten back here. But I would like to close. This amendment of mine will have this tax cut be for one year, and there would be a little thinking time between now and the time that the tax cut would take effect. I know that various individuals have gotten together to work this out. Everybody seems to be in pain. Nobody likes what they have to. Poor young Senator Hilgert got shanghaied into naming this his priority bill. The Speaker, more or less, had to make it a major priority... or a super priority. Senator Wickersham has been in agony, even before the bill got out of committee. The other members were deadlocked and at loggerheads, and I followed their activities by reading
the newspaper. They would occasionally leave the floor, and then I read at one point that they would not meet anymore until the logjam had broken. One morning, I think it was Senator Coordsen who made the announcement that the Revenue Committee was meeting, and I said, the logjam has broken, and it had been. And as often happens when you have a logjam and it breaks, just a whole lot of everything that was piled up behind it come swooshing down. Water that's not drinkable, water you cannot bathe in. The only thing about it for sure is that it's wet, and that's what came on to the floor of the Legislature. People had been having meetings and trying to find a way to satisfy the Governor. Now, Senator Brown made it very clear that this bill, giving the tax cut, will benefit her constituents, so she can strenuously argue for the highest possible tax cut and be representing the interests of her constituency. There are a lot of us where that is definitely not the case. And even if I'd look beyond my constituents, those in the district that I represent, and others not in my district who feel I represent them, I am looking at what I think is in the best interest of the state now, as the governing body which has to decide what it's going to do with the money that it has, despite the projections of-the psychic forecasting board. And I disagree with what Senator Maurstad said that there can be a sudden and drastic downturn in the economy and you can continue to maintain this tax cut and you don't have to look at taking money from the schools or the political subdivisions. You go where you spend the most money. I would be very angry if the Legislature was making eleven dollars cut here and 50 dollars cut there like the Governor. Anybody can be short. I'm short, but you don't have to be small.' That's the difference between me and the Governor. I'm short. He's small. The kinds of things that he has done over there are designed to show his contempt for the Legislature. Like a kid in a sandbox, he sends these vetoes over here and tells us, sustain these cuts.
SENATOR BRASHEAR: One minute.
SENATOR CHAMBERS: Yeah. Eleven dollars and 50 dollars. What I was going to do, and some of my colleagues weren't for it, I was going to borrow this "recycler" on Senator WE's desk and go around and collect eleven dollars for the Department of Agriculture, just to see if we could make a point. If things
are that tight, we'd come out of our pockets and make that department whole. That's the way we're being toyed with. That's the way we're being trifled with. And not only do we accept it, we give the Governor what he wants. And you know what he wants? Not so much as a tax cut, he wants the Legislature's head on a platter, and you all are giving it to him. I can't stop you, but I don't have to join you.
SENATOR BRASHEAR: Thank you, Senator Chambers. And now the question before the body is the adoption of the Chambers amendment to the amendment. All those in favor signify by voting aye, those opposed nay. The question is, shall the house go under call? All of those in favor signify by voting aye, those opposed nay. Mr. Clerk.
CLERK: 20 ayes, 5 nays to place the house under call, Mr. President.
SENATOR BRASHEAR: The house is under call. Will all unexcused senators please return to the Chamber. Will all unauthorized personnel please leave the floor. The house is under call. Senators Bromm, Raikes, and Robinson. Senator Matzke. The house is under call. Senator Tyson, how do you desire to proceed? The...Senator Withem.
SPEAKER WITHEM: I'd like to move that the call be raised.
SENATOR BRASHEAR: We will be at ease one moment, please.
SENATOR TYSON: Mr. President.
SENATOR BRASHEAR: One moment, please, Senator Tyson. It is the decision of the Chair that we will proceed to a vote on the motion of whether or not ... on the question of whether or not the call should be raised. We will proceed there, and then I will recognize Senator Tyson as to the roll call vote. The question before the body is, shall the house ... shall the call of the house be raised? All those in favor signify by voting aye, those opposed nay. Have you all voted? Mr. Clerk, please record.
CLERK: 24 ayes, 5 nays to raise the call, Mr. President.
SENATOR BRASHEAR: A simple majority being required, the call is raised. Senator Tyson.
CLERK: Mr. President, voting aye with respect to the vote on the amendment...
SENATOR BRASHEAR: Senator Tyson.
SENATOR TYSON: Mr. President, I was referring to a record vote on the amendment. The amendment to the amendment. Is that in. order?
SENATOR BRASHEAR: Not a record vote on the question of...
SENATOR TYSON: Not a record vote on the question of...
SENATOR BRASHEAR: ... raising the call?
SENATOR TYSON: ... to raise the motion, but a record vote on the amendment to the amendment.
SENATOR BRASHEAR: You had previously...
SENATOR TYSON: I had previously asked for...
SENATOR BRASHEAR: ... requested a roll call.
SENATOR TYSON: ... a roll call vote.
SENATOR BRASHEAR: And now you are requesting a record vote...
SENATOR TYSON: I'm withdrawing that and asking for a mere record vote...
SENATOR BRASHEAR: Thank you.
SENATOR TYSON: ...to the amendment ... on the amendment to the amendment.
SENATOR BRASHEAR: Roll call vote has been requested. Mr. Clerk, please call the roll.
CLERK: (Roll call vote taken. See page 2488 of the Legislative Journal.) 2 ayes, 22 nays on the adoption of Senator Chambers' amendment to the amendment.
SENATOR BRASHEAR: The amendment to the amendment is not adopted. Mr. Clerk.
CLERK: Mr. President, Senator Chambers would move to reconsider the vote just taken.
SENATOR BRASHEAR: Senator Chambers, to open on the motion to reconsider.
SENATOR CHAMBERS: Thank you, Mr. President. Now it begins. Senator Tyson, you didn't do anything wrong by asking for a call of the house or asking for a roll call vote. I'm just giving you my take on it. My armor is heavy. I don't get tired. I don't get intimidated. I'm not moved or swayed by people getting tired. We need to stay here. We're giving a large amount of money to some wealthy people, and they want to see us earn our money. They want us to stay here all night, if necessary, to give them what they want. And the Governor has something he wants, too, and he wants this Legislature to roll over as it's trying to do. I just won't cooperate as I would if I were a team player. This is a legislative body composed of individually elected members. And I don't care how many meetings you all have under the balconies, in you all's offices, anywhere else. I don't care what kind of deals you all cut or what kind of strategies you work out or anything else you plan. You don't control me. You don't own me. You are not my parents, and you make a mistake if you think for a minute that I'm like the rest of these that you can make an ugly face at and cower. I will make any motion that I want to make, and I'll make it when I think that I should. And if we're going to discuss this bill... see, amendments of mine are passed over by the Speaker anyway, and I don't say anything about that. I know how this game is played. I've been here long enough, and I know which interests are important to the people in the Legislature and the things that are of import to me are not to anybody else.
So it's up to me to fight all the harder. He was elected to do what he's doing. He has the approval of you all to do what he's doing. And since it's within the rules, I don't even care. But I will do under the rules what I can do, too. So when you're going to jump over every amendment that I offer on every bill, do it. But when you put your special amendments up there, I will amend yours with my amendments that you jumped over. And that's what I'm in the process of doing. You all apparently live life in pigeon holes, and you want to do something at point A, and then when you get to point B, act like what you did at point A didn't happen. But that's not the way that I exist. In this instance, talking about this amendment that's pending before us now with Senator Wickersham's name on it and all those other senators, I know why those names are on those amendment. Everybody knows. But why in the world people would put their name on an amendment then get up here and whine and moan and apologize and temporize about how bad it is and how they don't want to do it. And this is a terrible thing and it shouldn't be done, but I'm going to do it. I'd rather not even hear that, but since I'm here, I'll listen to is because sometimes I say things on occasion that you all don't particularly enjoy listening to. But I do get a kick out of watching my colleagues make themselves squirm, watch my colleagues flagellate themselves. And I'll be if they watch television, in some of those countries where people around Easter time will get these whips and beat their backs bloody, literally. They'll say, those people are crazy or who will allow themselves to be nailed, literally, with nails to a cross. They'll say, those people are crazy. But I see a similar type of thing here symbolically: The self-flagellation; the crucifying; and the whining. At least do it with dignity. There was a song I heard going home one night, and I don't even remember all of it, but at one point the guy says, I'm going nowhere, but I'm going there proud. Going nowhere, but going there proud. Didn't make sense to me, but to him it did. He might not have a goal and maybe he has nothing else, but he's going to live out his life proud. I guess that's what he meant, with little or much. But I wish you all would listen to what you say here as I listen. I wish you would watch how you demean yourselves. You think that because I say some things that are satirical on occasion that I'm being harsh. I'm not nearly as harsh as you are to yourselves. I can't do to you what you do to yourselves. I
can't make one of you do the kind of things that you will voluntarily do. You know what puts me in a position to say this? I have listened very well during all of the debates that have occurred on LB 401 and I've watched the way the Legislature has behaved as a body. The Governor doesn't let you all make him crawl. He's not worried about you and your ability to control the purse strings because you don't control anything. He controls you. And he tells you what you had better do and you do it. He said in the newspaper yesterday or today, they had better give me my income tax cut because that's my priority and they better do what I say or I'll veto. We can override vetoes. We voted to pass the thing in the first place. Where is the pride? Where is the dignity? Where is the recognition if you like cold, naked power? Where is the recognition of the power that the Legislature has? If he had any regard for the Legislature, he wouldn't have sent this thing over here with these eleven-dollar and 50-dollar cuts. I bet you couldn't find another governor in the history of the country who had done something like this, and certainly not in 1997, unless it was to show utter contempt for the Legislature. This is what I think of you. I'll cut 50 dollars. Here, you can understand that. And then when we get to these people who are probably more pitifully situated than anybody else, now I'm going to play a little rougher. The developmentally disabled. Yeah, I know you some spineless, gutless wonders over there. I'm going to cut millions of dollars from them, and don't you touch it. Don't you give that money back to those people because they're not quite human anyway. And although eleven dollars means nothing to anybody else, I know it's devastating to the Department of Agriculture, but I'm going to devastate them and cut them by eleven dollars. The governor of a state carrying on like that, and you all have the nerve to be indignant at anything that I say? Can I cut...can I veto anything that you pass? Not one nickel. Can I make YOU stand up here and say, I don't like this. This is terrible. It's not good. We're not being prudent, but we're going to do it anyway. You know that's not the case. None of us could make each other do what the Governor is making the Legislature collectively do. And believe it or not, that's what I'm most offended by today. What the Legislature's doing is what it customarily does. So when something acts in accord with its nature, you can't expect anything more.
SENATOR BRASHEAR: One minute.
SENATOR CHAMBERS: But it seems to me that when the Governor shows such utter contempt, somewhere deep down inside of us we ought to be able to grasp something and pull it to the surface so that we will walk upright as bipeds are supposed to do. But we don't have it in us. And then sometimes people want to try to show the contempt for me that the Governor has shown for them, but I won't react to it as the Legislature reacts to the Governor's.
SENATOR BRASHEAR: Thank you, Senator Chambers. Senator Withem, to the motion to reconsider.
SPEAKER WITHEM: Yes, Mr. President, members of the body. I filed an unusual motion recently, it was a nondebateable motion, and I wanted to make a comment as to why I filed that motion. I think Senator Chambers in, at least, the opening part of his remarks on his motion to reconsider may have thought that I was expressing some frustration toward his offering this amendment. This amendment is a very appropriate policy choice to put before the Legislature. I don't agree with his policy position on the amendment, but it's a very appropriate choice to put before the Legislature. Matter of fact, this issue of how long the tax cut lasts was one of the main divisions in the body when LB 401 was on Final Reading. So I did not file my motion to ask the call to be raised in reaction to the fact that there was a Chambers amendment before us. It was, and I'll use a little bit of my soapbox here and go back to when we changed our rules earlier this session, I contended at that time that there was way too much placing the house under call, and particularly when there is a machine vote and there's absolutely no possibility of the house being placed under call changing the outcome of a vote, I think we can use our time more productively discussing upcoming amendments, as opposed to doing that. And when I saw in this particular case that the individual senator who had voted with ... what was apparently going to be the prevailing side asked for a call of the house, I thought it was not appropriate for .the house to be under call at that point. That's why I raised the motion. Senator Chambers, I'm well aware you have a different view on ... we had a difference of opinion during the
rules debate earlier in this session, and you expressed a view at that time that you felt that it is appropriate to bring the house under call for lots of different reasons. You and I have a difference of opinion on that. I wanted to explain to you and other members of the body why I filed that motion. It had nothing to do with your amendment, the contents of your amendment. I know you have another amendment filed. I'm trying to figure out what it does, and ... well, "looking forward" might be pushing it a little too much, but I will be waiting to hear what that explanation is. That's why I filed the motion, and I'll be on my soapbox a little bit here ... and I know Senator Chambers will use his time to counter this argument, and he's certainly entitled to do this: I think we spend far too much time in this body being called from whatever we are doing individually to serve our constituents to come here when it's not altogether necessary. That is the reason I filed the motion and the only reason.
SENATOR BRASHEAR: Thank you, Senator Withem. Senator Chambers, to your motion to reconsider.
SENATOR CHAMBERS: Mr. President, I ask unanimous consent to withdraw that motion.
SENATOR BRASHEAR: It is withdrawn.
CLERK: Mr. President, Senator Chambers. I now have from you, Senator, floor amendment 414 to the pending Wickersham amendment. (FA141 appears on page 2488 of the Legislative Journal.)
SENATOR CHAMBERS: Mr. President, members of the Legislature. Even though you have no interest, I'm going to pass this amendment around and tell you what the purpose of it is. It's what I call the "defense of marriage" amendment. Senator Jensen, did you hear me? What this amendment would do is to stop penalizing people through the tax code for being married. If people are not married but living in the same house, they could claim the same benefits when they file their income taxes that a single person can obtain. If they marry, Senator Jensen ... not if they marry Senator Jensen ... but Senator Jensen, if they marry, then they're at a disadvantage. And what I am
doing is doubling for the married couple what each would be entitled to if filing singly. So in the first part of this amendment, instead of these categories being 4,000, 30,000, 46,000, 750, which is more than each one would be entitled to individually, it does not double the amount that each would get. What I have done is to take the amount in each of those categories that a single person would be entitled to and doubling it for the couple who are married. I'd like to ask Senator Jensen a question because he can speak as a representative to two groups. Senator Jensen.
SENATOR BRASHEAR: Senator Jensen, will you yield?
SENATOR JENSEN: Yes.
SENATOR CHAMBERS: Senator Jensen, would you not agree that a married couple does not get the same tax benefit that two individuals filing singly would get?
SENATOR JENSEN: That is correct.
SENATOR CHAMBERS: If they were living together, but not married, they could still file singly and get the benefits that single filers would get?
SENATOR JENSEN: That's correct.
SENATOR CHAMBERS: If they got married, then what they could gain as a married couple would be less than what they could gain living together without being married.
SENATOR JENSEN: Yes.
SENATOR CHAMBERS: Would you like to rectify that situation?
SENATOR JENSEN: Yes.
SENATOR CHAMBERS: My amendment does it, doesn't it?
SENATOR JENSEN: I believe it does; yes, it does.
SENATOR CHAMBERS: Will you support it?
SENATOR JENSEN: I will consider that. I want to see what the total ramification is to the state.
SENATOR CHAMBERS: I'm interested in protecting and defending the institution of marriage...thank you, Senator Jensen. I knew what his answers would be up till the last one, and I had my fingers crossed that there would be the same forthright yes, but at least I got him to concede that he would consider it. I don't really know why, other than to avoid giving a married couple the same benefits that they would get if they filed singly, that the law is written in the way that it is, not just here but at the federal level, too, I believe. It wouldn't be difficult if you look at Senator Wickersham's amendment on page 1 to track what these figures are doing and what they are. And I've stated, I've stated it as simply as I can. If you were to do this, you would actually strengthen the marriage institution. I want to...since Senator... since Senator Kristensen is not doing anything right now, I'd like to ask him a question.
SENATOR BRASHEAR: Senator Kristensen, will you yield?
SENATOR KRISTENSEN: I take exception, I was talking to Senator Robinson, Senator Chambers, and that's hard work.
SENATOR CHAMBERS: Senator Kristensen, Senator Kristensen, I'm going to show you that not only do I listen to you, but I remember things you've said. When we were talking about that amendment that Senator Beutler offered on an earlier bill, you had stated, in talking about some of the problems that lead to the disintegration of a marriage, money problems, and not because they have too much but because they don't have enough. Do you remember making a statement at least along those lines?
SENATOR KRISTENSEN: Yes, I do.
SENATOR CHAMBERS: With what I am offering, it would go some steps toward overcoming that problem, not entirely, but some steps in that direction, wouldn't it,...
SENATOR KRISTENSEN: It could.
SENATOR CHAMBERS: ... by giving a married couple the same benefits as two single people?
SENATOR KRISTENSEN: It could.
SENATOR CHAMBERS: Why would you oppose this amendment because I know you must, because you're a member of the Revenue Committee, aren't you?
SENATOR KRISTENSEN: That's right.
SENATOR CHAMBERS: All right, you stamped yourself. Why do you oppose it other than being a member of the Revenue Committee, though?
SENATOR KRISTENSEN: Well, that's probably reason enough.
SENATOR CHAMBERS: I know it, but you have other reasons than that because your thoughts go deeper.
SENATOR KRISTENSEN: Was that a question?
SENATOR CHAMBERS: (Laughing) Not that merely being on the Revenue Committee, Senator Cudaback, you have done something to all of us. We ... Senator Kristensen, what would be the problem created if this amendment were adopted?
SENATOR KRISTENSEN: I assume there would be two problems. One is the social policy would probably cause problems with people politically. The second would just be the assessment of how much revenue it would bring in because it would be difficult to know how many people would qualify ... and I'm not... I don't want to hurt your feelings but I've not read your amendment, but I assume that you'd have trouble determining, at least initially, how many people would qualify for that, so you would have some question as to how much revenue you're gaining or losing from it.
SENATOR CHAMBERS: Well, the first would be that they would have to be married to get the benefits of this amendment, and as a couple,...
SENATOR KRISTENSEN: Well,...
SENATOR CHAMBERS: ... they would get ... they would get double what they could get if they were single.
SENATOR KRISTENSEN: But you would be increasing the number of couples, right?
SENATOR CHAMBERS: Say it again.
SENATOR KRISTENSEN: You would be increasing the number of couples. The definition would be broader to include more couples than we currently have now.
SENATOR CHAMBERS: They'd have to be married..
SENATOR KRISTENSEN: I understand that.
SENATOR CHAMBERS: Well, how would this make more married people exist?
SENATOR KRISTENSEN: Well, then maybe I don't understand your amendment.
SENATOR CHAMBERS: Well, I don't understand what you're asking me.
SENATOR KRISTENSEN: Well, then we're even.
SENATOR CHAMBERS: How would this amendment bring into existence more couples, more married couples?
SENATOR KRISTENSEN: I ... Senator Wickersham just handed me your amendment. Oh, you're not changing the definition of who is married?
SENATOR CHAMBERS: Oh, no.
SENATOR KRISTENSEN: That was my assumption. I'm in error.
SENATOR CHAMBERS: Oh, no. Oh, no, I am not changing that at
all, just the money.
SENATOR KRISTENSEN: If that's what, you're just changing the bracket, that it Just alters the amounts that are brought in.
SENATOR CHAMBERS: Yes, that's all.
SENATOR KRISTENSEN: I ... the social upheaval, answered the way I thought you were changing who would be defined as married for the purpose of obtaining the standard deductions and that's what my answer...
SENATOR CHAMBERS: Oh, no. What I said earlier, Senator Kristensen, is that two people not married can live together as though married and get the standard deductions of two individuals, two single filers. But if they are married, then they lose that advantage.
SENATOR KRISTENSEN: Yes.
SENATOR CHA14BERS: So it kind of penalizes the status of being married. The status of being married results in a tax penalty, which does not...
SENATOR KRISTENSEN: Right.
SENATOR CHAMBERS: ... exist for two people cohabitating without being married,...
SENATOR KRISTENSEN: And you're just altering...
SENATOR CHAMBERS: ... cohabiting.
SENATOR KRISTENSEN: ... I just looked at the handwritten results of it. If I could take a look at it again.
SENATOR CHAMBERS: Okay.
SENATOR KRISTENSEN: I assume what you're doing is just...
SENATOR BRASHEAR: One minute.
SENATOR KRISTENSEN: ... you're actually having the impact of reducing revenue to the state by doing this amendment because you would up the deductions. If that's all your doing, that would be the impact, and that would be the only ... that would be the only change...
SENATOR CHAMBERS: Yes.
SENATOR KRISTENSEN: ... policywise that occurs. You just have less money coming in.
SENATOR CHAMBERS: Right, but there would be no other policy matters involved in this decision. It would be one strictly of how much revenue would come in then as opposed to now.
SENATOR KRISTENSEN: Right. Exactly.
SENATOR CHAMBERS: Thank you. Members of the Legislature, I am offering this amendment in all seriousness, and when it was printed in the Journal earlier, because I had offered it before, I got phone calls and people were glad. They thought that it was an accomplished fact. I said, no, printing it in the Journal doesn't mean it was adopted. It Just means that I am trying to do it. I think there are married people who would approve of this.
SENATOR BRASHEAR: Thank you, Senator Chambers. Senator Wickersham, to the Chambers amendment to the amendment. Senator Wickersham.
SENATOR WICKERSHAM:. Thank you, Mr. President. I'll be brief. I'm rising to oppose Senator Chambers' amendment. I do not know what the fiscal impact of the proposal would be. I don't know what the body's feelings about this particular issue are. They can vary, I suppose, depending on whether you're single or whether you're married. A couple of years ago I know my view of this amendment might have been different, but, be that as it may, we do not know what the fiscal impact of Senator Chambers' amendment is, and just so we can be clear about what it does, it simply changes the amounts in the brackets for the married filing joint returns and for the married filing separate returns, and simply doubles the brackets for those amounts from
the single returns for the married filings, it's a double, and then simply repeats the single return brackets for the married filing separate. I have absolutely no way of predicting tonight what the fiscal impact of Senator Chambers' amendment might be. The proposal that you have before you in the underlying amendment, 2565, is fairly finely tuned, and I would urge you to reject this amendment.
SENATOR BRASHEAR: Thank you, Senator Wickersham. Senator Chambers, to the amendment to the amendment.
SENATOR CHAMBERS: Mr. President and members of the Legislature, I don't know that we will have many opportunities to do something in a direct substantive way for the family. I have seen on television, read in the newspaper, heard national figures talk about preserving and strengthening the family. More money will strengthen the family. Somebody said you can't buy happiness, but you can stave off a lot of misery, and to some people absence of misery equates with happiness because of how bad things are for them. There is nothing this Legislature is going to do that directly affects the institution of marriage in the way that this amendment will. I'd like to ... Senator Bohlke, oh, there she is. Senator Bohlke, I'd like to ask you a question, if you don't mind answering.
SENATOR BRASHEAR: Senator Bohlke, will you yield?
SENATOR CHAMBERS: I'd like to ask you a question. Senator Bohlke, the way that the tax code operates, and not just in this state and at the state level, there is a penalty for being married. You might not call it a penalty, but would you agree that people filing as a married couple are at a disadvantage as opposed to filing singly as unmarried people?
SENATOR BOHLKE: As I understand it, yes, that's true.
SENATOR CHAMBERS: Do you think this amendment would be welcomed by married people?
SENATOR BOHLKE: Senator Chambers, I do not know because I have not heard your explanation of this amendment so if you'd tell me.
SENATOR CHAMBERS: Oh, what it does, what it does is take the amount, you know the deduction that a single person will get, and it simply doubles it for the married couple, and it puts them on the same footing as an unmarried couple living together. So if an unmarried couple living together can file singly and get the benefit of the deduction, why should the state say but if you get married, which the state approves of and encourages, you're going to be penalized vis-a-vis two unmarried people living together?
SENATOR BOHLKE: I do not know.
SENATOR CHAMBERS: Would you like to help me rectify that?
SENATOR BOHLKE: By voting for your amendment.
SENATOR CHAMBERS: Let's take it a question at a time. Would you like to help me rectify it?
SENATOR BOHLKE: Senator Chambers, I'd never thought of that as being a particular problem so I am not sure I want to rectify it.
SENATOR CHAMBERS: Well, for those to whom it is a problem, I am sure you would agree it is a problem.
SENATOR BOHLKE: Yes.
SENATOR CHAMBERS: And if somebody were analyzing this society from without, from outside of it, do you think they might find it peculiar that a tax benefit accrues to unmarried people living together, which is not available to two married people living together?
SENATOR BOHLKE: Yes, I would.
SENATOR CHAMBERS: Okay, so if there are married couples who are aware of this difference, do you think they would like to have the situation equalized so that they could enjoy the same tax benefit of two people living together unmarried?
May 19, 1997
SENATOR BOHLKE: I am sure they would, but there would be a cost to that also.
SENATOR CHAMBERS: Oh, definitely. We might have more people getting married. And I am sure that would be a bad thing in a society like this. Where is Senator Jensen so I can get him to agree with it. But thank you, Senator Bohlke. The point I am getting to I think is very clear to everybody.
SENATOR BRASHEAR: One minute.
SENATOR CHAMBERS: It's easy, and this is not meant in condemnation of anybody here. I am talking about the way things go in a political setting. We all know the political hay that can be made by everybody who speaks in behalf of family values, strengthening the family and all such things as that. But when by a simple act such as this we can go a long way towards putting married people on the same footing as unmarried people who are shacking up, we won't do it. So it kind of rings hollow when we talk about having so much respect for the institution of marriage. That's the way I size it up. I just think that those people who can endure marriage ought to have the same advantage, even though they are married, maybe because they're married, that I have as an individual filing singly, who is no longer married. Thank you, Mr. President.
SENATOR BRASHEAR: Thank you, Senator Chambers. Senator Withem, to the Chambers amendment to the amendment.
SPEAKER WITHEM: Yes, Mr. President, members of the body. I have a question for Senator Chambers that relates to something I heard Senator Wickersham state. Senator Wickersham had indicated that he did not support this amendment because he did not know what the fiscal impact would be. It's my understanding now that if we were to adopt AM2565, maybe I'll ask Senator Wickersham the question, first of all,...
SENATOR BRASHEAR: Senator Wickersham, will you yield?
SPEAKER WITHEM: ...to get ... to get these numbers out here, that the net fiscal impact of adopting AM2565 would be a biennial loss of about $125 million worth of revenue, is that correct?
SENATOR WICKERSHAM: About 12S to 127, there are actually, as usual in these processes, two different estimates.
SPEAKER WITHEM: Certainly, yeah, I understand, as we brought into some of the forecasting difficulties that Senator Chambers has alluded to before. By the way on that, I did have my light on earlier, Senator Chambers, when you were talking about the Forecasting Board and missing by 20 or 30 million dollars, keep in mind that the Forecasting Board with approximately $2 billion worth of revenue coming in, if they get it 99 percent correct, they are still off $20 million. So to people like you and me, $20 million seems like a lot. As you pointed out, 11 mill... $11 is pretty important to the Governor, they are still 99 percent correct. And if you are 99 percent correct, you usually get a pretty good ... a pretty good grade on an examination, but the original fiscal impact of 401 would have been, Senator Wickersham, about $120 million, is that correct?
SENATOR WICKERSHAM: That's correct.
SPEAKER WITHEM: Okay. Senator Chambers, the question to you is...
SENATOR BRASHEAR: Senator Chambers, will you yield?
SENATOR CHAMBERS: Yes.
SPEAKER WITHEM: ... do you have any estimation of how much lost revenue there would be to the state if your amendment were adopted?
SENATOR CHAMBERS: I have absolutely no idea...
SPEAKER WITHEM: Okay.
SENATOR CHAMBERS: ... in terms of a figure.
SPEAKER WITHEM: And for that reason, although I'm intrigued by the idea and think the concept he put forward of lessening or eliminating the marriage penalty is a worthy goal for the state, I don't think I am going to be able to support it at this time.
That was my problems with Senator Maurstad's amendment that was adopted momentarily on General File was the $170 million or so fiscal loss that would be to the state. So I am not going to support the Chambers amendment if, as is admitted, we don't have a fiscal analysis of how much it will cost. So thank you, Mr. Chair.
SENATOR BRASHEAR: Thank you, Senator Withem. There being no further speaking to the amendment to the amendment, Senator Chambers to close.
SENATOR CHAMBERS: Mr. President members of the Legislature, I believe these are the only two amendments that I offered earlier that I was really serious about. And this one I really am, and I wish that the Revenue Committee had considered it, and we're talking about long-range goals. Senator Cudaback, somebody had just whispered in my ear and said they wondered if the benefit would be large enough to entice you getting married, but I said I couldn't fig... I couldn't answer that question. So being a bachelor, you're going to be the target in a lot of instances. (Laughing)...not that much money. And, Senator Cudaback, it'd take even more than that to make me give up my single status. There is something about that freedom. But, Senator Cudaback, let me explain something to you since you've never been shackled or yoked. You've never been yoked together. Now having never been yoked, you can appreciate freedom but you can never appreciate it as much as when you were unyoked, became yoked, then become unyoked again, and that is not a yoke, son. I mean that. But this amendment, if you think about it, whether you adopt it now or not, is something that ought to be given serious consideration. I usually stand up and make fun of people because so much talk is engaged in about family values. I don't talk about those kind of things. That's not the approach that I take because I don't need to do that for whatever reason it's done. I just take some things for granted, but a society should not be praised because they have family values, whatever those are, nor a politician lionized because he or she says I support this. But what does count is if those people who are struggling along trying to function as a family look out there and see us making hay and being elected and reelected talking about trying to help the family, but at the same time, we create a tax code that penalizes people who are married, it might be difficult for
them to take us seriously when we Bay that we're in favor of strengthening the family. They might find-it hard to take us seriously when we talk about chastity for the children, you know, not engaging in sex before you get married, but telling them by the tax code that if you live together and do anything else you want to do while you're living together, you will gain more under the tax code than if the two of you get married. So if you want to be better off economically, live in sin. Sin does pay. The wages of sin is not death. The wages of sin in Nebraska is a bigger income tax deduction. Get married, come clean, take those vows, and, automatically, you are going to pay more taxes. There is a heavy marriage tax in this state, and that's what that difference is. That's why I call it a penalty. It is a marriage tax. You young people sitting up there, you better make sure you love somebody enough to pay that marriage tax. But if you're interested in money, you can do everything else married people do, and you don't have to get married, and the state will not penalize you in your pocketbook, and that's the only time politicians pay attention to something is when money is involved. You hear everybody agreeing with me that marriage is the greatest thing in the world and we ought to sustain it and protect it and Congress passed a bill to defend it. But let us say do away with the marriage tax, and, oh, no, marriage is not really that important now because it costs too much to show respect for marriage by giving married people the same break that unmarried people shacking up get. That's difficult to understand.
SENATOR BRASHEAR: One minute.
SENATOR CHAMBERS: And I'm glad that I don't have to rationalize it and make it right. It is not appropriate. I will never be married again, (knocks on wood) because they say, you know, knock on wood and the bad thing that you hope won't happen won't happen to you, so I don't want that to happen to me again, and as long I'm sane, it won't. But I hope you will listen ... oh, Senator Wickersham has given me my signal. Thank you.. Mr. President.
SPEAKER WITHEM PRESIDING
SPEAKER WITHEM: You've heard the closing on the Chambers
amendment to AM2565. All of those in favor vote aye, opposed vote nay. A record vote has been requested. We are voting on the adoption of the Chambers amendment to the amendment. A record vote has been requested. Have all of you who care to vote voted? Please record, Mr. Clerk.
CLERK: (Read record vote. See page 2489 of the Legislative Journal.) 6 ayes, 14 nays, Mr. President, on the amendment to the amendment.
SPEAKER WITHEM: The amendment is not agreed to. Mr. Clerk, anything further pending on AM2565?
CLERK: Nothing further pending to that amendment.
SPEAKER WITHEM: We are now discussing the adoption of the AM2565, which is offered by Senator Wickersham. I see no further lights on. Senator Wickersham, I would recognize you to close.
SENATOR WICKERSHAM: Thank you, Mr. President. I will be brief. This amendment, as we've indicated at the beginning of the discussion, calls for a 5 percent reduction in liability, an increase in personal exemption credits of $10 per dependent, and a full deduction of your self-employed health insurance on your Nebraska income tax return, and a 40 million dollar transfer from the Cash Reserve Fund during the upcoming biennium. It is fiscally prudent and will allow us to keep ... or allow taxpayers of the state of Nebraska to keep dollars in their pocket that we will not need for state operations in the upcoming biennium. Mr. President, I would ask for a call of the house, and then just a board vote.
SPEAKER WITHEM: How do you spell that, b-o-a-r-d or b-o-r-e-d?
SENATOR WICKERSHAM: -e-d.
SPEAKER WITHEM: With that, the question is, shall the house go under call? All of those in favor vote aye, opposed vote nay. Record, Mr. Clerk.
CLERK: 20 ayes, 0 nays to place the house under call.
SPEAKER WITHEM: There are 20.... The house is under call. Members who are not excused, please return to the Chamber. The house is under call. Unauthorized parties, please leave the floor. The question before the body is the adoption of AM2565. All members not excused are present. The question is the adoption of the amendment. All in favor vote aye, opposed vote nay. Record, Mr. Clerk.
CLERK: 34 ayes, 2 nays, Mr. President, on adoption of the Wickersham amendment.
SPEAKER WITHEM: The call is raised. The amendment is adopted. Mr. Clerk, anything further?
CLERK: Mr. President, the next amendment to the bill, Senator Janssen. Senator, withdraw?
SPEAKER WITHEM: It is withdrawn.
CLERK: Senator Kristensen, 2123, Senator.
SPEAKER WITHEM: It is withdrawn.
CLERK: Senator Maurstad, 2114.
SPEAKER WITHEM: Senator Maurstad.
SENATOR MAURSTAD: I would like that amendment withdrawn along with any other subsequent amendments I have filed.
SPEAKER WITHEM: It and the other amendments will be considered withdrawn.
CLERK: Senator Chambers, FA273, Senator.
SPEAKER WITHEM: Senator Chambers.
SENATOR CHAMBERS: What can I do, Mr. Speaker, other than withdraw it.
SPEAKER WITHEM: It is withdrawn.
CLERK: Senator Chambers, the second amendment.
SPEAKER WITHEM: It is withdrawn.
CLERK: Senator Chambers, 2211.
SPEAKER WITHEM: Senator Chambers.
SENATOR CHAMBERS: Mr. President, members of the Legislature, I will ask the Clerk to do with this what I would like to do with this bill, trash it, Mr. Clerk.
CLERK: Likewise with 2212, Senator? Senator Wesely, 2380, Senator.
SPEAKER WITHEM: Senator Wesely. It is withdrawn.
CLERK: I have nothing further to the hill, Mr. President.
SPEAKER WITHEM: The matter now before the body is the advancement of LB 401. Is Senator Bruning here? Senator Will, would you do the E & R duties.
SENATOR WILL: Yes, Mr. Speaker. I move the advancement of LB 401 to E & R for engrossment.
SPEAKER WITHEM: Senator Chambers, you are recognized to speak.
SENATOR CHAMBERS: Mr. President and members of the Legislature, I have to take my last shot at this bill. I feel that I have suffered a personal agonizing, crushing defeat on this bill. You all had better enjoy this moment of my defeat because you will never see me this down again. It's not often, Senator Hilgert, you are a young man and a new man here, that you see a man so totally stripped of everything as I am this evening. Don't let it happen to you, son. I am going to vote against this bill, and I just hope for the sake of the Legislature and the state that all of this money, which everybody guarantees is going to be there, will be there. I hope that the public is not going to have its hopes raised by what the Legislature is doing, then have them dashed. If the economy is as strong as everybody
says that it is, I hope, for everybody's sake, that it continues to be that strong, if it really is. I just don't believe all of the glowing predictions that people have given. Those who worked hard on this bill can justifiably feel a sense of euphoria because they have completed a very difficult journey. But there are repercussions outside of this room. I know the Chamber of Commerce is probably popping the champagne corks or popping whatever those kind of people do when something happens that they want, and I bet that there is going to be a very great amount of partying among those people because they have won. And, Senator Tyson, whenever anybody wins, they celebrate in accord with the way their standard of living allows and equips them to celebrate, but I don't think what we're doing is a wise and prudent act. The money that is being used to fuel this tax cut could better be used by the state to do some worthwhile things. I know the Legislature is not going to override the veto of that- money for the developmentally disabled. I know that, because like marriage, we talk about it but we don't really do anything about it because the Cost is too great. So I don't expect that veto to be overridden. I don't expect us to be sensitive enough to appreciate the value of the arts. Those are those sissy enterprises, the things that are worth nothing., but there is such a thing in some people's view as a spiritual side of a person. And some people, who believe in those things, believe that spiritual side needs to be nurtured. And it is from this that all these activities known as the arts spring, and art for art's sake can sometimes give to some people more satisfaction than a general gets who defeats an army because it is closer to the nature of a human being to express himself or herself through those creative forces than it is to go out and slay a multitude. So when we come to those things that really bind a society together, that really characterize a society, the things that people would...
SPEAKER WITHEM: One minute.
SENATOR CHAMBERS: ... like to boast about in the future will go begging when left to this Legislature. And I know that's what is going to happen when we come to those vetoes. So I'm going to ask for a machine vote on this bill so that I can be shown voting no, and I will ask for a record vote.
SPEAKER WITHEM: The question now then before the body is, shall LB 401 be advanced to E & R engrossing? A machine vote has been requested. All members in favor vote aye, oppose...those opposed vote no. And the request has also been that this be a record vote. Have all of you wishing to vote voted? Apparently. Please record, Mr. Clerk.
CLERK: (Read record vote. See page 2490 of the Legislative Journal.) 35 ayes, 4 nays on the advancement, Mr. President.
SPEAKER WITHEM: LB 401 advances. The agenda has indicated that we would be addressing bills on Select File that do not have any amendments, prior to adjourning. Let me read the list to you if I could. Mr. Clerk, could I have your copy of the list? I'll read that list to you so it has been up here all afternoon, and this has been on the agenda, but to just make sure there's adequate notice. The following bills do not have amendments filed at this time, and will be brought up for consideration, potential voice voting. Obviously, people can request that we do otherwise, but those bills are LB 877, LB 835, (LB) 835A, (LB) 854, (LB) 854A, (LB) 327, (LB) 327A, (LB) 764, (LB) 460, (LB) 829, (LB) 829A, (LB) 91, (LB) 569, (LB) 626, (LB) 626A and (LB) 420. Those are the bills that will be taken up in that particular order. You know, obviously, if people have some concerns with that, motions can still be filed. With that, Mr. Clerk, please bring up LB 877.