- Associated Press - Wednesday, January 15, 2014

LINCOLN, Neb. (AP) - Gov. Dave Heineman called on lawmakers Wednesday to cut taxes and reject an expansion of Medicaid in Nebraska, while promising a quick fix for the state’s overcrowded prisons.

Heineman outlined his plans in his final State of the State address to lawmakers at the Capitol. The Republican governor repeated his call for a property- and income-tax cut package during this year’s 60-day legislative session, arguing that it would help struggling families, farmers, ranchers and small-business owners.

“We need higher paying jobs to reverse the decline in Nebraska’s median family income,” Heineman said. “We need higher paying jobs to increase the state’s population, and growing jobs requires a more competitive tax environment.”

Heineman began his speech with criticism of the federal health care law, a major issue in this year’s 60-day legislative session.

Opponents blocked an attempt to expand the state’s Medicaid program during last year’s session, and supporters this week introduced a revamped measure. The federal government offered to pay the full cost of covering new enrollees until 2016, at which point the federal share would gradually decrease to 90 percent by 2020.

“President (Barack) Obama and his White House political operatives are trying to pressure Nebraska into expanding Medicaid, but Nebraska will not be intimidated by the Obama administration,” Heineman said. “We have researched and studied the Medicaid expansion issue carefully, thoughtfully and methodically. The responsible choice is to reject this optional Medicaid expansion.”

Lawmakers are also looking at ways to reduce overcrowding in Nebraska’s prison system, with a focus on expanding mental health services and substance abuse treatment, and on closer supervision of inmates most likely to reoffend.

Heineman called on lawmakers to reform the state’s “good time” law for prisoners, which automatically awards one day of credit to inmates for every day served. The governor and Republican Attorney General Jon Bruning are pushing for an “earned time” law for violent inmates that would give credit only to those who behave and participate in rehabilitation programs.

“The choices we make today are about Nebraska’s future,” Heineman said. “We must not mortgage Nebraska’s future by expanding Obamacare’s Medicaid program. We need to protect Nebraska citizens by reforming Nebraska’s good time law (for prisoners). And we need to increase the take-home pay of Nebraskans by providing them tax relief.”

The prison issue surfaced partly in response to the case of Nikko Jenkins, who is accused of four Omaha-area slayings after his release from prison. Jenkins was released despite repeated warnings that he suffered from mental health problems and still posed a threat to society. The state’s prisons are also chronically overcrowded, with an inmate population at more than 150 percent of the state’s capacity in recent months.

“The recent murders were a wake-up call for everyone one of us,” Heineman said. “The people of Omaha and the citizens of Nebraska should be able to walk the streets of their neighborhoods without fear of being shot.”

Heineman called for a long-term study of the Nebraska Department of Correctional Services to address chronic overcrowding. He recommended several short-term fixes, including adding security staff, contracting with county jails that have available beds, and relying more on the state’s Work Ethic Camp in McCook. He said he also would push for reducing the number of federal detainees in state facilities.

Over the longer term, Heineman promised to work with lawmakers on ways to reduce the state’s prison population, including a limited supervised release program.

“There may be opportunities for our state to enact innovative solutions that ensure public safety at a lower cost to our taxpayers,” he said.

Lawmakers offered mixed reactions to the governor’s proposals.

State Sen. Beau McCoy, of Omaha, said he supported changing the state’s good time law for prisoners and he remains opposed to Medicaid expansion.

“I’m not willing to risk the fate of the state on the federal government’s likelihood that they are going to honor their commitments,” he said.

Sen. Jeremy Nordquist, of Omaha, said Heineman presented a “false choice” when he argued that Medicaid would drain money from state education. He said the expansion would generate savings in health programs that would offset its future Medicaid costs.

“Expanding health coverage is good for the economy, our health care system and our neighbors,” Nordquist said.

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