Organized Labor Must Fight Back Against 'Pro-Business' Agenda

Following up on my earlier post, today's Omaha World-Herald published a great letter to the editor challenging all the cheerleading about Nebraska's newfound ranking in the Top 10 pro-business states:

According to the Pollina Corporate Real Estate Inc. rankings, Nebraska is now in the top 10 of pro-business states.

Pollina directs businesses to the cheapest places to operate. How sad it is to be ranked with Virginia, North Carolina, South Carolina, Florida, Utah, Wyoming, South Dakota, Alabama and Georgia. Evidently, our business leaders and the Nebraska Chamber of Commerce and Industry believe low wages will attract businesses to our state.

This state needs high-paying jobs that will reduce the taxes for all residents. Readers should note that the Pollina study, which compares states based on 29 facts, excludes property taxes. How convenient.

I was among the labor leaders who supported the 2005 Nebraska Advantage Act, which offers a variety of tax credits, exemptions and refunds to encourage businesses to expand or locate in Nebraska. I was assured that the intent was to attract good jobs to Nebraska. It looks like we now need to makes some changes in that law.

Jim Sheard, Papillion

I'm glad Sheard was willing to take-on the prevailing, misguided notion that whatever benefits corporations must be a plus for Nebraska's economy. That just isn't the case, and low wages are a legitimate example of one place where the people's agenda is very, very different from the agenda of the business community.

The fact that the Nebraska Advantage Act is credited with our rising the ranks of pro-business states should be cause for suspicion. This seems to suggest the state's job incentives carry some imbalance in the corporations' favor - some angle that they're completely able and only to happy to exploit. Of course, the harm of these programs is no more firmly established than their supposed benefits, but there's already a reasonable inference to be made that Nebraska taxpayers are getting screwed.

And, more alarming than just the fact of Nebraska's pro-business ranking is the purpose to which it's being used in the Nebraska press. I'd previously mentioned Heineman using it to bolster his plans to end the estate tax on Nebraska's wealthiest citizens and to focus massive tax cuts on the top income bracket. But, as revealed in the subtext of the Lincoln Journal-Star's Tuesday coverage, that's only the beginning of how these numbers are being used against the interests of working families and organized labor:

Nebraska has jumped into the top 10 pro-businesss states....

Nebraska...does well because it is a right-to-work state, which means unions represent bargaining units of people who can't be required to join the union....

For those in the know about what's going on in the Nebraska Legislature, that right there is an interesting justification for Nebraska's pro-business ranking because it's being directly challenged by State Sen. Don Preister's LB57. This legislation would provide for Fair Share representation in which non-Union members would be expected to pay for some of the costs of a Union's collective bargaining efforts that they currently benefit from without contributing a dime.

The business community carefully selected its "Right-to-Work" terminology, but it's quite misleading. Rather than Fair Share vs. Right-to-Work, the real debate here is between Fair Share and a Free Ride.

LB57 breezed through Committee but has been held-up by the full Legislature. There's been some suggestion that it won't make it any further this session. But, this is a change organized labor has been seeking for a long time, and they can't stay quiet on it if it's to have any realistic chance at passage.

Heineman and business leaders are already using this conveniently-timed pro-business ranking to undermine LB57, and organized labor has to fight back. My suggestion - admit that LB57 might hurt our standing with corporations but only because it restores some much-needed balance and benefit to the working men and women who make Nebraska great.

That's a debate I want to see. That's a debate we can win.

In other words, let's tell Heineman, Pollina, and the Chamber of Commerce - on behalf of Nebraska's working families - to take this Top 10 ranking and shove it!

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Nebraska Joins Pro-Business 'Top 10' - Really Something to Celebrate?

In a Monday news conference that also served as an advertisement for Gov. Dave Heineman's tax-cut agenda, Heineman was joined over the phone by Ronald Pollina, a corporate site selection consultant also responsible for compiling the annual, self-titled list of the "Pollina Corporate Top 10 Pro-Business States." Together they announced that, for the first time ever, Nebraska had cracked Pollina's Top 10.

The Omaha World-Herald reports:

Nebraska's new business tax incentives program has pushed the state into the No. 10 ranking of pro-business states, Gov. Dave Heineman announced Monday....

But he said the new ranking doesn't reduce the need for the Legislature to pass tax cuts to encourage economic growth....

"I still think we have work to do, obviously, on the income tax side," Heineman said.

The 2007 Pollina list was unveiled Monday at the International Economic Development Council in Arlington, Va. Nebraska had ranked 17th last year and 18th the two previous years. The report is in its fourth year....

Pollina said the state could rank even higher if income and sales taxes were reduced. Nebraska ranked 34th on corporate taxes and 32nd on individual income taxes. Pollina said his study does not look at property taxes as a separate category.

I am by no means a reactionary in opposition to all things corporate. But, that said, I'm not ready to join in Heineman's hopeful celebration that Nebraska might soon be viewed as the promised land for big business.

I don't doubt that corporations can be a strong engine for economic progress that can ultimately lead to job creation and higher incomes. But, that's a long ways from saying what's good for the corporations is automatically good for the people of Nebraska. It's this distinction that rankings fail to grasp and that a politician like Heineman refuses to acknowledge.

It's pretty simple really - corporations are not people, and it's the people to whom Heineman should owe his allegiance. If that were the case, though, there are far better indicators in terms of employment, wages, and cost of living that say a lot more about how people are actually doing than some overhyped survey of the business climate.

Of course, on some level, all these roads do lead together, but our priorities as a state are being dictated by a path far removed from that walked by the common man. To celebrate the effect of Nebraska's corporate tax incentives without considering the resulting loss of revenue and services - not to mention the shifting of the tax burden onto real people, often in the form of property taxes for which Pollina takes no account - is to selectively blind ones self to our economic reality.

Again, corporations are not people, and its the peoples' interests that should predominate, if not be a democracy's sole concern. That isn't to say that corporations desrve no consideration but only to the extent that they truly serve - and can be shown to serve - the common good.

Nebraska's ranking as the 10th most pro-businesss state doesn't even come close to clearing this most basic hurdle. In fact, in many ways, being pro-business can be practically defined as being anti-people and anti-democratic.

Corporations may play an essential role in the modern economy, but government should not be made to serve their bottom line. The work of government cannot be stated purely in terms of dollars and cents. Nor can any true plan for economic development be grounded in tax incentives that remain unproven but as evidence of the Chamber of Commerce's influence in the legislature.

As with Heineman's tax plan, the true story here is one of priorities. And, whether its tax giveaways for corporations or targeting the bulk of a tax cut towards the state's highest income bracket, there is ridiculously little concern for doing what's best for the average Nebraska family or for the people as a whole.

So, we're now in the top 10 pro-business states. That can be a good thing. That can have some positive effects. But, don't forget that there have been plenty of trade-offs along the way. And, don't assume they've been worth it just because they're not reported.

Heineman may be right to celebrate. He's been fairly upfront about his agenda favoring corporations and the wealthy, and this shows he's got at least someone convinced that progress is underway. But, the progress of Heineman's agenda has little in common with progress in general. In fact, they might have nothing in common at all.

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Dave Heineman's Funny Idea of Sacrifice

The Omaha World-Herald reports:

Nebraskans will get "meaningful and sustainable and permanent" tax relief this year, Gov. Dave Heineman predicted Friday.

Speaking to the Nebraska Tax Research Council's annual meeting, Heineman voiced confidence that he and the Legislature would reach agreement on a tax cut plan before lawmakers go home at the end of May.

"The question is not whether we're going to get tax relief, it's just what kind," Heineman said....

Heineman said he is pursuing tax cuts as part of a long-term strategy for attracting and keeping more young people in the state....

The Republican governor told the group that controlling state spending is essential to making tax cuts possible. He said he believes he has support from the public, even if it means saying "no" to a number of spending requests.

"I don't think there's a person in Nebraska who isn't willing to sacrifice in the short term for their son or daughter's future," he said.

Sounds good, Mr. Governor. There's just one problem - short-changing higher education is one of the essential components of Heineman's plan to control state spending. So, instead of asking the people of Nebraska to sacrifice for their children's future, what Heineman's really doing is sacrificing our children's future to fund massive tax cuts for the upper-class.

The Lincoln Journal-Star reports:

Tuition will go up. Academic programs will be cut. And everyone will feel a bit more stressed out.

At least, that’s what state and community college leaders say will happen if the Legislature doesn’t grant them the dollars they say they desperately need.

Monday, they got a chance to plead their cases before the budget-crafting Appropriations Committee, nearly two months after Gov. Dave Heineman proposed funding allocations that were far less than what the higher education world had hoped for.

“If we want to maintain rural Nebraska, we have to make sure those students have access to our institutions,” Nebraska State College System Chancellor Stan Carpenter told committee members.

The state colleges, with a current state allocation of $40.9 million, had requested funding increases of 12.3 percent and 6 percent the next two years.

Heineman gave them 2.1 percent and 2.3 percent increases.

If his recommendations stand, the state colleges — which have campuses in Chadron, Wayne and Peru — would have to raise tuition 18 percent next year alone to generate enough revenue to help cover fixed costs like faculty salary increases, utilities and office supplies, Carpenter said.

That's what Nebraska's state colleges have to say. Meanwhile, the University system chimes-in:

NU is facing a tough battle for precious state dollars as Gov. Dave Heineman stands firm on his goal to increase spending by just 3.8 percent.

Originally, NU requested funding increases of 6.5 percent and 4 percent in the next two years, funds [NU President J.B.] Milliken and others said were necessary to maintain competitive faculty salaries, invest in priority programs and keep tuition reasonable.

Heineman proposed 1.1 percent and 2.2 percent increases, amounts he said would allow for growth but keep spending in check.

Appropriations Committee members appear to be slightly more sympathetic to NU — they’re leaning toward bumping funding increases up to 2.1 percent and 3.2 percent in the next biennium — but Milliken said that’s still not enough.

Such small increases, he said, won’t even cover NU’s unavoidable expenses, like faculty salaries, utilities and equipment maintenance.

Those alone would require funding increases of 5.7 percent and 5 percent, he said.

If the committee sticks with its current numbers, he warned, tuition increases would be more than the 5 percent jump he’s shooting for, and far more than average Nebraska families can handle.

Of course, higher education is only one front in the competition for scarce resources inherent to the budgeting process. This particular budget battle is probably the most deserving of the public's attention and outrage, though, because it offers such a clear example of Gov. Heineman's shameless hypocrisy.

You can not reconcile Heineman's rhetoric with the true priorities his plan actually reveals. While claiming "I don't think there's a person in Nebraska who isn't willing to sacrifice in the short term for their son or daughter's future," Heineman's plan forces astonomical tuition hikes and program cuts asking sacrifice of no one but students and their families.

When Nebraska should be focused on increasing the accessibility and affordability of higher education, Heineman has completely blinded himself to higher education's obvious and inextricable link to our state's future economic well-being. Rather than asking citizens to sacrifice for this cause, he asks for nothing but our silence while he sacrifices our children and their futures to fund his tax cut proposal.

From the evidence, the only future on Heineman's mind is his own political future. He's promising hundreds of millions of dollars to those currently in Nebraska's top tax bracket while short-changing a population too young to vote or - at least - too young to have much of a say.

Sort of a funny idea of "sacrifice", wouldn't you say?

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Promises & Priorities: Unicameral Tax Cut Plans Coming Into View

On Tuesday, the Lincoln Journal-Star's Around the Rotunda column reminded the people of Nebraska that behind the scenes in the state legislature there's a very important but little-talked-about battle going on over what sorts of tax cut options will make their way out of the Revenue Committee and to the full Unicameral for debate.

There's enough momentum behind the general principle of cutting taxes - with a healthy enough forecast for the state's short-term revenue prospects - that some sort of tax cut is all but inevitable. You'll hear no complaint here. Yet, in the eyes of the New Nebraska Network, what's more important now than raw dollar amounts are the priorities we reveal as a people - demonstrated not only by the populations to whom we target tax relief but also by the quality of services maintained and provided by the state.

Unfortunately, it's hard to get much of a sense of what to expect from the legislature at this point. One expects that Gov. Dave Heineman's LB331 will make it out of committee at least somewhat intact considering that it was introduced on Heineman's behalf by its chairman, State Sen. Ray Janssen.

Yet, Janssen has expressed a genuine interest in the legislature's hands not being tied too much to any single tax cut proposal. Thank God for that because the Heineman plan is not only contrary to the will of the people for its neglect of their property tax concerns but is also against the interests of the state with its regressive shifting of the tax burden onto those least able to carry the weight.

According to the Journal-Star, the cornerstone of Heineman's argument for cutting income taxes is job creation. Looking at the actual evidence, however, this argument fails to persuade and is completely lacking in merit:

Tax cuts equals more jobs has become a mantra for Heineman, who is trying to convince the Legislature to return more than $200 million a year in income and other tax cuts.

Heineman’s belief in the power of tax cuts is based on research done by the Nebraska Department of Revenue.

The governor’s income tax cuts would result in an additional 1,500 to 2,560 jobs the first year. By 2011 the total job growth could range from 2,837 to 4,837 jobs, based on an analysis of how the additional income would move through the economy.

The department used a computer model originally developed by the Legislature’s fiscal office to determine how the state’s business incentives might affect the economy. The computer model shows how the money might move through the economy and thus create additional jobs....

The department did not look at how other tax cut options might affect the economy — including a half-cent sales tax [reduction]....

Not everyone believes the Department of Revenue study is the final word on tax cuts and economic growth.

The Nebraska State Education Association has a report on its Web site indicating there is little direct relationship between income taxes and economic development.

“In the last decade there was no difference in average growth in the top 10 most business tax friendly and the 10 least friendly states, according to Richard G. Sims from the Sierra Institute on Applied Economics.

In general, states with high economic growth had relatively higher taxes, he says. Of the 15 fastest growing states, eight had above average individual income taxes and seven had below average income taxes. Three were in the highest 10 taxing states and four were in the lowest 10 taxing state, Sims says.

Of the 15 slowest growing states, four had above average individual income taxes and 11 had below average income taxes. Four were in no income tax states.

To be honest, it's quite appalling that the Journal-Star would even dare to suggest that Heineman's argument is rooted in a "Department of Revenue study." All he offers is a computer simulation that divines some magical number of jobs created under his proposal that would remain utterly preposterous even with some basis for comparison Heineman did not see fit to provide.

Compare that to the real study cited by the NSEA - one relying on actual facts, figures, and state-by-state comparisons - completely debunking the relationship between income taxes and job creation on which Heineman so expressly relies.

The Journal-Star has put Heineman playing a game of SimCity on par with actual science and economics - demonstrating either no understanding of the issues or no respect for the truth.

Over the last two months, the New Nebraska Network has, of course, devoted considerable efforts to challenging the faulty assumptions and unprincipled priorities underlying Heineman's LB 331.

For starters, even accepting the notion that ours is a high tax state, the income tax is one of Nebraska's least burdensome in comparison with other states.

Moreover, any talk of Heineman's simplifying the income tax structure by reducing the number of brackets from 4 to 3 must be seen in light of what he truly proposes - the wholesale elimination of the lowest tax bracket, subjecting our state's youngest and most disadvantaged population to an across-the-board tax hike.

At the same time, there's no denying that under Heineman's proposal the bulk of the benefit is reserved for those currently in the highest tax bracket, particularly those economic elites who benefit most from the outright elimination of the estate tax.

It should not surprise that these same economic elites would continue to see their taxes fall bit-by-bit over the next four years, as Heineman uses a phased-in tax cut for the rich to mask the long-term liability and dangerousness of his proposal when its $240 million in lost revenues balloons to an annual loss of $310 million. That's an additional $70 million giveaway - each and every year - to no one but the state's wealthiest citizens.

Now, as the New Nebraska Network has stated before, there is room for reasonable reform of Nebraska's income tax structure. Heineman's plan just happens to be nothing of the sort. It's true that the middle class should be broadened - but to make the system more progressive, not less so. Cutting rates might even be agreeable if the ultimate benefits were distributed more fairly across the entire population.

Even with these more reasonable proposals, though, income tax reform should not stand in the way of the more essential and immediate task of reducing our heavy reliance on property taxes - hopefully introducing some progressive mechanism to protect homeowners or to at least make the property tax burden more manageable for those on fixed incomes.

A whole host of bills have been introduced proposing property tax reforms, and I regret that the New Nebraska Network has not had the opportunity to delve into them in any real detail - be they Sen. Tom White's highly-touted $500 rebate (LB 453) or a variety of exemptions, shifted expenses, and so-called "circuit-breakers."

Regardless of what ulimately survives committee, at the start of this legislative session it seemed quite clear state senators understood that property taxes are where the voters' interests lie and that they should share those same priorities.

There has been pretty intense pressure from Heineman and the Omaha World-Herald to break this lockgrip of voters' real world concerns. There has even been some suggestion in the press that a few of the more partisan Republicans in the legislature have given up listening to their constituents on property taxes and now plan to fall in-line with Heineman's proposal. Still, it's hard to believe that Heineman could possibly have the political capital to hoodwink a majority of state senators into similarly betraying the people who elected them.

I guess we'll see how it all plays out soon enough, but now is most definitely not the time to sit back and enjoy the show.

The Nebraska media has been totally irresponsible in its coverage and concessions to Heineman on this issue. Substantive analysis has been lacking as has criticism in any but the tamest and most general sense. Last month, there was even a very disturbing sign that the legislature might follow the same weak trajectory when Heineman made the rarest of appearance before the Revenue Committe - arguing on LB 331's behalf - and was only asked a single softball question by its members.

When our public opinion and policy leaders will not offer more scrutiny than that, it is incumbent upon the people to stand up and assert themselves - protecting their own interests when nobody else will.

If you are disturbed at all by the plan Heineman's put forward, the time has come to contact your state senator and to crank out those letters to the editor. There are shapes forming in the haze of legislative process off in the distance. Battle lines are being drawn behind closed doors. The facts are on our side, as is the will of the people. Let us use them both - without fail and without flinching - in defense of the greater future it falls upon us to pave the way for all Nebraskans.

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