We heard from Chuck Brown of the OpenSky Policy Institute at Lincoln South Rotary Club on December 7.

We also had Tiffany Milone, Policy Director and Kathy Campbell, Board Member available to assist with the presentation and answer questions.

Chuck introduced the topic by stating that the Open Sky Policy Institute is a non-partisan organization that focuses on research and reviewing the tax budget and education finance policy in Nebraska.

As a general point he stated that general funds appropriations have declined, but major budget areas have not all declined, meaning that property taxes will likely need to increase to compensate.

OpenSky’s mission is to improve opportunities for every Nebraskan by providing impartial and precise research, analysis and education - they feel that a good decision is based on being informed.

From their website: The goal is to improve the lives of low- and middle-income Nebraskans through fair and equitable tax policies and encouraging public investments in economy builders such as outstanding schools and affordable health care services.

The organization got started in 2008 when several Nebraska organizations recognized the need for a non-partisan organization dedicated to fiscal research and analysis.

A primary function of OpenSky Policy Institute is to provide data, regarding revenue proposals and existing policies in an effort to put the state on a sustainable long-term growth path.

We got an overview of the State's budget, changes and challenges. Much of the focus was on the impact of the budget changes on education funding. There has been a decrease in funding for education which puts a burden on the local tax systems - property taxes increase to cover the shortfall.

He showed us what it would look like if we thought of the Nebraska tax system as a three-legged stool. If we want it to balance among the three tax income sources, adjustments would need to be made in all areas. Currently we have:

37.5% from property tax
28.9 % from sales tax
27.01% from income tax
(there are some various other areas making up the remaining 6.6%).

Nebraska is not one of the highest or lowest states for tax rates. We are right in the middle.

New areas for the upcoming legislative session include:

Medicaid Expansion - it is estimated that will cost the State $39-41 million (on top of the funds provided by the Federal Government); the actual amount varies depending on who you ask. The Legislative Fiscal Office and DHHS do not agree on the estimated cost.

Online Sales Tax - it will be difficult to enforce; Companies like Amazon may comply but it is hard to get the other companies that sell "through" them to comply. The State may focus on the organizations with the largest $ / # of sales initially.

Revenue challenges include the Ag Economy, past tax cuts have reduced our income, tax incentives need to be revised, we are uncertain of federal tax changes, we have a depleted State cash reserve, and there is an anticipated recession in 2020.

For more information or to receive email updates visit http://www.openskypolicy.org/.