As a candidate, I said that as State Treasurer I would look for ways to bring economy and efficiency to the operations of the Treasurer’s Office. Today I am announcing the first of several steps I will take to follow through on that commitment.
Currently, the State Treasurer administers the Long Term Care Savings Plan. The Government, Military and Veterans’ Affairs Committee has recommended that this Plan be eliminated as a money saving measure. As the Administrator of the Plan, I support eliminating it.
The policy objectives of the Long Term Care Savings Plan can be achieved without the need for administration of a plan by the State Treasurer. The dollar savings involved are relatively small in the context of the budget of the State of Nebraska. However, I think the precedent we are setting is very important. Most state and federal government administrators try to create new programs, increase their budgets, and increase their own power and authority. This leads to increased spending of the taxpayers’ money and unnecessary bureaucracy and red tape. We need to go in a different direction. We need less government, less spending and less bureaucracy. My announcement today is a step in that direction.
I cannot remember the last time a state or federal government administrator proposed or supported eliminating a program that he or she administered. I hope the precedent I am setting here today will encourage other state and federal government administrators to look for ways to eliminate some of the programs they administer, reduce their budgets and eliminate unnecessary bureaucracy. That is certainly what Nebraska taxpayers would like to see.
The policy objective of the Long Term Care Savings Plan is to encourage Nebraskans to provide for their long term care needs. That policy objective can be achieved in other ways. While repealing the Long Term Care Savings Plan Act, the Legislature could simply provide a state income tax deduction for the purchase of long term care insurance. Or the Legislature could authorize state financial institutions to offer long term care accounts without any involvement by the State Treasurer. Deposits in these accounts, up to a specified amount, would be tax deductible and there would be no state income tax on the earnings on the accounts.
The savings involved here is $98,084. That represents about 1.8% of the State Treasurer’s operating budget. However, if that same 1.8% were saved on the entire state budget, that would be a savings of over $131,000,000. Relatively small percentage budget cuts can add up to hundreds of millions of dollars, if done throughout state government.