Key Issues for Nebraska Engineering Firms

ISSUE
The demands of a growing population and a growing economy will require significant new sources of energy in the years to come. Estimates are that by the year 2030 we will need a staggering 30 percent more energy to meet the needs of our domestic economy.

A robust, diverse and innovative approach to energy development is essential to our economic security. This will require expanded domestic production, transmission, and distribution of all energy sources—including coal, natural gas, petroleum, nuclear, hydropower, renewables, and biomass—as well as a new effort to modernize the infrastructure for energy delivery.

Any comprehensive energy plan must include renewable energy. Renewable energy sources are playing an increasing larger role in our energy portfolio. Incentives encourage continued development and expansion of renewable energy sources, enhancing energy security while also creating hundreds of thousands of jobs among industries, including Nebraska’s engineering industry, that serve this important sector.

KEY POINTS

• Nebraska’s energy security requires an “all of the above” strategy that expands the domestic production of both fossil fuels and renewable energy.
• Tax credits and incentives for energy efficiency, developing and delivering wind, hydropower, geothermal, renewable energy, and conventional fuel sources are critical to continuing the diversification of our domestic energy supply.
• Energy policies should address additional incentives for new building construction as well as retrofits.

ACTION REQUESTED

• Streamline overly burdensome and time consuming environmental review and permitting processes that provide little environmental benefit.
• Develop incentives for Brownfields redevelopment.
• Develop a sustainability policy that represents the interests of Nebraskans, ACEC’s member companies and their clients.
• Develop incentives that promote the development of alternative energy technologies beneficial to Nebraskans, ACEC member companies and their clients.

For a PDF of Energy & Environment Fact Sheet Click Here

“I think it has been well-established that Nebraska’s transportation system plays a vital role in the quality of its citizens’ lives. The state’s economy is heavily dependent upon the agricultural and transportation industries. Having a robust and quality highway system is not only vital to the movement of goods and people, it is absolutely essential to the development and success of this state,”

Senator Deb Fischer during her closing remarks at the 2010 Nebraska Surface Transportation Funding Conference.

Issue

The transportation engineering industry has long recognized the importance of an efficient and reliable transportation system to the economic success of Nebraska and the Nation. The State’s transportation systems are the foundation for the efficient movement of people and goods, and are crucial for economic development, business retention and expansion, and job creation throughout Nebraska.

Key Points

• Transportation investment creates short and long term economic growth. Every $1 billion in spending on infrastructure supports over 34,000 jobs.
• Each dollar invested in highway construction generates $1.80 of GDP in the short term.
• A transportation system takes a long time to develop and requires a steady investment to maintain and enhance the system.
• As reported by NDOR, our current funding system is producing flat to declining revenue for roads, while at the same time inflation is eating away its buying power.
• At the current funding levels, NDOR is essentially in a preservation and maintenance mode. The size of NDOR’s construction program will have dropped from $390 million in FY-06 to approximately $310 million in FY-13. Yet the needs of the State continue to escalate, creating an estimated $7.5 B gap in funding over the next 20 years.
• A program with certainty to transportation planners and facilitate the investments is necessary to meet our surface transportation needs.

Action Requested

ACEC-Nebraska urges Nebraska Legislators to pass an authorization bill with robust funding increases and mechanisms to ensure adequate and stable funding sources for meeting the transportation improvement needs of Nebraska for the next 20 years. More specifically, ACEC-N supports:

• Consideration of additional innovative funding sources to close the gap between identified needs and funds available to meet those demands such as the motor fuel tax, vehicle registration fees, a sales tax for transportation.
• Require economic development, job creation, and local financial support be included as factors in establishing project priorities.
• Utilize bonding as a funding option with added flexibility by implementing a “debt service to revenue cap” as the basis for the amount of debt that may be issued to fund the construction of transportation infrastructure.
• Dedicate revenue streams directly to transportation.
• Maintain transportation funding from state to local governments for local transportation infrastructure needs.
• Greater utilization of private sources of capital.
• Implement a new funding sources from non-fossil fuel vehicles that share the highways and roads.

For a PDF of Surface Transportation Funding Fact Sheet Click Here

Despite the fact that the Nebraska is home to the world’s best engineering firms and talent, efforts continue at the state, county and municipal levels to limit the ability of public entities to enlist the capabilities of private engineering firms.

ACEC members continue to report examples of state agencies, counties and municipalities engaging in commercial activities that are traditionally done by the private sector.

Issue

Efficient and effective work performance and use of tax payers dollars should be the goal of all involved While certain functions are truly inherently governmental, especially those dealing with law enforcement, defense, and the acquisition and oversight of contracts, most are not. Public entities that contract with engineering firms are able to acquire unique capabilities, adapt quickly to economic conditions and fluctuating workloads, ramp up their programs when funds are available, and ramp down when funding cycles demand savings. By contrast, government policies that require the use of in-house engineer workforces stifle innovation and competition, limit experience application, and dampen economic growth.

Key Points

• Public entities should not engage in commercial activities that are readily available in the private sector.
• Private sector brings broader and unique experience, innovation and competitiveness, ability and flexibility to respond to fluctuating workloads, and lower costs.
• Public entities should have broad flexibility to partner with the private sector, especially for important, high-risk projects, with restricted schedules and budgets.
• America’s engineering companies play an essential role in helping public entities deliver and upgrade the nation’s critical infrastructure – to reduce congestion on the nation’s roads and bridges, provide clean drinking water to consumers, develop energy-efficient and sustainable buildings, and enhance the security and safety of the public.
• The principle that the government should not compete against its citizens is reflected in federal procurement policy. This concept has also been embraced by Congress through passage of federal laws such as the FAIR Act, which requires federal agencies to produce an annual inventory of non-inherently governmental functions and evaluate whether these activities would be better performed by the private sector.
• Taxpayers benefit from the savings that are realized when public entities contract out planning, engineering, design and related professional services.

Action Requested

• ACEC-N urges Nebraska Legislators to protect and strengthen procurement of private sector design, engineering and construction services, and oppose efforts to restrict the flexibility of public entities to contract out.

For a PDF of Maximizing Private Sector Innovation Fact Sheet Click Here

ACEC is opposed to the concept of levying a sales tax on businesses that provide professional services to their clients. Such taxation is regressive, inhibits competition and is inherently difficult and burdensome to administer. Service taxes are generally applied at a uniform rate for all service providers within the taxing jurisdiction. Smaller firms suffer under such an arrangement, particularly for gross receipts taxes. Additionally, large firms often have the capability to provide comprehensive services in-house, while the small firm must rely on consultant, thus adding to their tax burden.

Issue

Assessing a tax on professional A/E services is extremely difficult for government to achieve. Tax reporting procedures could lead to firms having to pay taxes on revenue they have not yet, or may not ever, receive. Furthermore, taxes on professional services have historically fallen short of expected tax revenue. The revenue shortfall coupled with the large bureaucracy state governments would have to create to administer the tax should further deter legislatures from attempting to implement a tax on professional A/E services.

Key Points

Historically have failed to generate the amount of revenue expected prior to their implementation. Approximately 52% of all engineering fees are from traditionally exempt users (i.e. governments)

• Put in-state firms at a competitive disadvantage because out-of-state firms will be able to offer the same services without having to collect a sales tax.
• Will drive in-state firms to seek out-of state work.
• Are difficult to administer and could lead to double and triple taxation on any given project.
• Would require a new level of bureaucracy needed by state governments to implement and enforce the tax.
• Will hurt the profitability of firms as they may be required to pay the tax on services before payment is received from the client.
• Filing and administrative burdens of the tax would be especially detrimental to the small design firms that help drive the local economy.
• Many states require sales taxes be reported at the time of sale on a monthly basis. This would require design firms to report and pay sales taxes at the time of invoicing rather than at the time of collection.

Action Requested

ACEC/Nebraska urges Nebraska Legislators defeat legislation that would implement a sales tax on businesses that provide professional services.

For a PDF of Tax on Professional Services Fact Sheet Click Here