Pillen proposes tax cuts

Gov. Jim Pillen on Wednesday introduced what he called the largest tax cut in Nebraska history. A bill was introduced to legalize cannabis. And lawmakers disagreed about whether proposed legislation discriminates against transgender people.

Pillen’s tax proposal would reduce the top personal income tax rate from where it is now, 6.64 percent, down to just under 4 percent over the next four years. That would be a tax cut of about $720 million a year when fully implemented – more than 20 percent of what the state currently collects in personal income taxes. Corporate rates would decline as well.

Pillen wants to speed up eliminating taxes on Social Security. He wants the state to take over support for community colleges, at a cost of about $250 million a year, replacing property taxes. And he wants to value ag land on its income producing potential, not on its market value.

Pillen said his proposed tax changes, along with school finance changes he proposed earlier in the week, address Nebraskans’ shared priorities.

“It's about our kids. And it's about taxes. And it's the things that all of us Nebraskans agree on. We never ever give up on our kids. We all agree our kids are our future. This is really critical about workforce development. And it's really important critical about transformative tax

Change,” he said.

Pillen said his team has been working on fitting all this into the state budget since the day after he was elected, and has had to reject many potentially worthwhile proposals.

“Our team has said ‘No, no, no,’ and ‘no’ some more, so that we could be putting forth these conversations to have historic tax cuts, he said.

Pillen was asked whether some of those ‘no’s’ went to Nebraska hospitals. Hospital leaders have been saying they need higher Medicaid payments. The governor said “What hospitals have to do is tighten their belts and they have to rein in any costs and any out of control spending.”

Jeremy Nordquist, president of the Nebraska Hospital Association, said he was disappointed in that rhetoric.

“Any ‘belt tightening’ that's going to happen is going to mean elimination of services in rural communities. It's going to mean less hiring of nurses at a time when our emergency rooms are backed up -- when we can't transfer patients from small rural hospitals to large rural hospitals because we don't have enough staffed beds. Any spending that doesn't keep up with the cost to provide care, that doesn't keep up with the cost to hire staff, means less services and less access to care to Nebraskans,” Nordquist said.

Nordquist said hospitals asked Pillen for state Medicaid payment increases totaling about $70 million over the next two years. He says he doesn’t yet know what will be in the governor’s budget proposal. Pillen is scheduled to reveal his budget recommendations in his first State of the State speech, scheduled for next Wednesday.

Meanwhile in the Legislature, senators completed their final day of bill introductions Wednesday. Among the proposals submitted was one by Sen. Terrell McKinney to legalize cannabis. McKinney says at a time when states around the country are legalizing it, and he can buy cannabis stocks on the phone, it’s time to change Nebraska law.

“It makes no sense that it's still illegal. And we have men and women in prison, or men and women that are outside of prison that can't get food assistance because of a conviction of marijuana and things like that. I think it's to me it's a no-brainer,” McKinney said.

McKinney said he doesn’t know if his bill will pass, but it’s time to have the conversation.

And on the legislative floor Wednesday, Sen. Megan Hunt talked about why she and six other senators voted to adjourn the session the day before.

Hunt said she wanted to indicate how upset she is at some of the bills that have been introduced, including a ban on abortions after about six weeks of pregnancy, as well as proposals Hunt says promote intolerance and hostility toward transgender people.

One of those would prevent anyone under 19 from getting drugs or surgery to help them transition, which Hunt says would prevent supportive parents from helping their kids.

“Trans people are people. And for trans children, life can be overwhelming and lonely and difficult to live. And their parents and families are continually worried about their children and their happiness. For trans youth who do have affirming parents, sometimes that is the lifeline for them that keeps them literally alive. And we are in the Legislature trying to take that away from them. This body should do nothing to contribute to the obstacles and the discrimination that trans people and their families face,” Hunt said.

Sen. Kathleen Kauth, who introduced the bill on drugs and surgery, also introduced one requiring schools to separate students into locker rooms according to their gender assigned at birth. In an interview, Kauth denied any discriminatory intent.

“It's certainly not something to target kids who are dealing with transgender issues. Those kids need support. They need mental health counseling. They don't need to be put in the position of having to be the standard bearer and walking into a locker room and dealing with that issue. If they have their own that makes it better for them – privacy,” Kauth said.

Bill introductions have now ended, and committees will begin holding public hearings next week on proposals that have been introduced.