Today the Ralston Chamber held the Governor’s Luncheon at Anthony’s Steakhouse from 11:30 AM-1:00 PM.
Please see our tweets @NebraskanPol for live coverage.
The Governor spoke to the audience of over 100 people regarding the events in Boston, health care and tax reform. We will cover it in more detail here later including remarks by Mayor Groesser.
Special thanks goes out to Governor Heineman for coming and the Governor’s Office for sending us his speech. Below please find the prepared speech which may differ in place from the given speech.
Remarks as Prepared for Ralston Area Chamber of Commerce
“Thank you for all that you do for the State of Nebraska. Nebraska is on the move and that’s very good news for our state.
The 2013 legislative session is an opportunity to continue moving Nebraska forward across all sectors of our economy. Nebraska is making significant progress, but we have more work to do.
Nebraska has good schools, affordable homes, a strong work ethic and a low unemployment rate, but taxes are too high in Nebraska. Property taxes are too high. Income taxes are too high. Occupation taxes are too high. I’ll discuss taxes in greater detail later in my remarks, but first, I want to discuss education.
Education is the great equalizer and education is one of our state’s top priorities. We invest in education because we know how important it is. Our focus is on academic achievement. We can be very proud that Nebraska’s high school graduation rate is 87.6 percent – the 4th best in America. Our goal is 90 percent. My proposed budget continues to make K-12 education a priority by increasing state aid to education by five percent in each of the next two fiscal years.
I am also very pleased to share with you our efforts to have state workers make wellness a part of their everyday lives. We offer an innovative wellness program and a health insurance package designed around wellness.
In 2012, the State of Nebraska wellness program became the first and only state program to earn the coveted C. Everett Koop National Health Award. To receive this prestigious award, you have to demonstrate health improvements and cost savings. This award reflects how hard state employees have worked to improve their health.
After just three years, the State of Nebraska has seen a $4.2 million reduction in claims, strong participation rates and high satisfaction among employees. Our focus on wellness is resulting in a healthier work force and our insurance premium increases are significantly lower than the national average.
At the federal level, health care policy is a different story. In the next two year budget cycle, the State of Nebraska and every state in America is required by law to implement President Obama’s new federal health care law. The financial impact is enormous. It will cost Nebraska middle class families more than $170 million in federal and state funds over the next eight years to implement the technology and administration of the health care exchange required by Obamacare.
This $170 million does not include additional costs to the Medicaid program as a result of President Obama’s new federal health care law. It will cost Nebraska middle class families $72 million in new state spending in the upcoming two year budget for the growth of the current Medicaid program as a result of Obamacare. That $72 million will be a permanent part of every state budget in the future.
Additionally, several advocacy groups want to expand Medicaid. Expanding Medicaid will cost Nebraska middle class families hundreds of millions of dollars in additional state spending. When you add in the federal costs, it will be billions of dollars. These advocacy groups will tell you that it’s free federal money, but they conveniently forget to tell you that it’s your tax dollars.
It’s not free federal money. It’s our tax dollars. They say the federal government will pick up 90 percent of the cost and the state will only have to pay 10 percent of the cost. However, they don’t want you to know that 10 percent is hundreds of millions of dollars of new state spending.
Additionally, the federal government doesn’t have a history of fulfilling its commitments. For example, the federal government said it would fund special education to the states at 40 percent. Currently, they only pay 18 percent to 19 percent of the cost.
The proposed Medicaid expansion is unaffordable and this new state spending for President Obama’s new federal health care law is money that should be going to state aid to education, special education, early childhood programs, and higher education. Our priority should be the education of our children. I am also very concerned about federal economic policy and its impact on Nebraska.
Unlike the federal government, we don’t spend money we don’t have.We balance our budget in state government and our family budgets by controlling spending, not by raising taxes.
Lending Tree said Nebraskans have the lowest average monthly mortgage payment of any state in America. 24/7 Wall Street named Nebraska the third best run state in America. Our challenge for the future is we need a modern tax system to create more jobs and higher paying careers for our sons and daughters, and our grandkids.
So where does Nebraska stand today? The Small Business and Entrepreneurship Council states that Nebraska’s top personal income tax rate is the 35th highest in America and higher than every one of our neighboring states. That’s important because more than 90% of small businesses pay taxes as individuals. They pay through the individual income tax system rather than corporate income taxes. High taxes impede economic growth.
Additionally, forty-three states exempt a portion of or all social security income from taxation, but Nebraska does not. Almost every week, one of our citizens tells me they are going to leave Nebraska for Wyoming, South Dakota, Texas or Florida because these states don’t have an income tax. Furthermore, twenty-three states exempt a portion of or all retired military pay from taxation, but Nebraska does not.
The State of Nebraska’s sales and income tax system generates approximately $4 billion in revenue. The income tax system raises nearly $2.4 billion. The remainder comes from sales tax revenue except for a small amount of miscellaneous revenue. However, the State of Nebraska provides $5 billion in sales tax exemptions. Nebraska exempts more than we collect.
If we eliminated just half of the current exemptions, Nebraska wouldn’t need to have an individual income tax or a corporate income tax. Without a state income tax, there would be no income tax on working Nebraskans. Nurses, hospital workers, manufacturing workers, welders, electricians, teachers, firefighters, police officers, railroad workers, waitresses and every worker in Nebraska would no longer pay state income taxes on their wages.
Social security and military retirement income would no longer be taxed. There would be no state tax on small business income. We need a modern tax code that rewards productivity, profits and job creation.
Change is not easy, especially when it involves taxes, but this is the discussion that our state needs to have and we are having it. It’s been nearly 5 decades since Nebraska had a serious debate about our overall tax system. Life has changed drastically since the 1960s.We were operating in a completely different economic environment then.
The average cost of a new home was $24,000. A first-class stamp was 5 cents and gas was 33 cents a gallon. In the 1960s, Americans didn’t even have personal computers in their homes.
Today, we live in an electronic age. Today, we are operating in a technology-driven, global free market economy.
Our goal is a better tax policy environment that will create more high-paying jobs and more rewarding careers for our sons and daughters. As you have heard, this is a challenging and difficult issue.
Now I want to share with you what I am hearing from our citizens as I travel across the state. Frequently Nebraskans will tell me they want to eliminate the state income tax but my special interest exemption needs to be preserved. I’ve told them you can’t have your cake and ice cream both.
More and more Nebraskans are telling me that we should eliminate all $5 billion of sales tax exemptions. That would be fair to everyone. Nebraskans have been asking me why the current law exempts some industries from paying sales taxes on machinery and energy, but in most industries from construction to home building to real estate to retail and financial services, they have to pay sales tax on machinery and energy used in their industry. Why do Nebraskans have to pay sales tax on the energy used in their home, but certain businesses get a sales tax exemption?
The next phase is a legislative study and we need every Nebraskan and every Nebraska business to join with us in developing better tax policies that create more jobs and higher paying careers for generations to come.
Thank you for the opportunity to be here today. I am happy to answer any questions that you may have.