529 Power / State Treasurer Tom Briese

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Fighting for the Values that makes Nebraska the good life. This is Drive Time Nebraska with Doug Fitzgerald. On 1,493, KLIN. Kids, I love my kids.

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I'll tell you what, I've got two great kiddos, Dillin's 26, Sydney, who is 23. You know, my wife and I raised them both here in Lincoln, and we're fortunate to have them both still living here, which is a blessing to us. If you have kids or grandkids, I'm sure you agree that you'll do all you can to provide the best for them so that they can succeed at life, whatever they feel called to do or led to do or to accomplish. Today or tomorrow's show, we're going to be talking all about our kiddos, specifically providing them financially so that they can succeed and also economically as well and to make sure that they have the education for them to excel where they are. Today we're grateful to have a friend of the show on the studio, Nebraska State Treasurer Tom Breezy. And we're going to dig into the Nebraska 529 plan that is one tool to help you provide financially for your kids and their education.We also found out that there's legislation, LB1402, that was signed by the governor, that the treasurer is required to administer. We're going to dig into that a little bit. So that's kind of a little breaking news here that we're learning about today. Along with that, tomorrow we're going to be joined by Senator Luann Linahan about LB14-02, something that she's very passionate about, again, that was signed into law. And we're going to get her take on that in the show tomorrow.So tune in some critical information that you're going to need to know about to help your kids and your grandkids. Now, here's a cool thing. Years ago, Tammy and I both, we set up Roth IRAs for our kids, and they've been a huge blessing in our kids' lives, both from an education and from a housing standpoint, so much so that we didn't realize that when we set it up for them. We just thought it was the right thing to do. Back then, it was really only what we could do. Now that they'reolder and they were able to utilize those funds, it's been a huge benefit. So this is an important show to listen to, and the 529 plan could be that as well for your kiddos, too. Well, in other programming notes, guess what? Speaking about being young at heart, our dear friend and fellow Lincolnite, Brian Olson, had an amazing week on NBC's The Voice.Last night, America voted him through the next round. We're going to hear more from him next week before he gets on stage to perform. In just a couple of minutes, we'll be joined by State Treasurer Tom Breezy. How's he's waiting in the wings right now to join us on the show. Thanks for joining us on Drive Time, Nebraska.

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Raising the roof, roof, roof.

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On the issues that truly matter to Nebraska's.

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With the occasional net violation, you're listening to Drive Time, Nebraska with Doug Fitzgerald on 14993, KLIN. Welcome back to the show.

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Thank you for joining us on your drive home today. We are airing on social media platforms, Facebook, YouTube, LinkedIn, and Twitter. Make sure you like us, subscribe, all that stuff. Also, we would lovefor you to check out the podcast. Go to KLAN.com or wherever you listen to your podcast. Great shows this week. Husker volleyball, great Rebecca Alec, was on a Monday show talking about her support for I've got a nameto end sex trafficking right here in our backyard in Lincoln and Nebraska. Then yesterday, man, yesterday was a great show. UNL professor, political science, Ari Cohen came on, talked about his reaction in regards to the pro-Palestinian protests going on in colleges, even here at UNL, them demanding even him to stop his program of taking students over to Israel to experience that culture. And so it's a powerful show. Go back and listen to it. Go to KLIN.com to find it. Well, today we're honored to have Nebraska State Senator Tom Breezy on the show.Tom, thanks again for popping in. We appreciate this. It's going to be a great show. Great to be here, Doug. Thank you for having me. Absolutely. Do we got him on there? All right. So, yeah So anyway, thanks again for hopping on. We appreciate that. I tell you what, let's just dig right in because we don't have a ton of time, but I want to talk about the 529 plans. So important for our kids to be set up financially, Governor Pillon declared May 29th, along with you and some others, I believe Union Bank as well, as National 529 Day in Nebraska. Let's dig into this. What is a 529 plan and then what does that day signify?

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You bet. Thanks again for having me. And here in Nebraska, we have what is called the Nest 529. That's Nebraska Educational Savings Trust 529. And that's one of the many programs that we run in our office. And the NEST 529 allows you to set up a savings account for a child's higher education.And I think we can all agree on the importance of higher education for our young folks. Whether you're talking a four-year degree, two-year degree, tech school, trade school, even an apprenticeship, higher education can be a game changer for our young folks, for our children and grandchildren and any young person. And what better gift is there to give than that of higher education? And the Ness 529 program is a very effective tool for giving that gift of investing in a lovedone's higher education.

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So I heard a stat, and I talked to you beforehand. You didn't know for sure verify, but I'm going to throw it out there anyway because I think there's probably some truth, if not full truth, that kiddos who have a 529 that's established for them are three times more likely to utilize that for higher education. And that's why I think it's so important that we do invest in the future. Whether you think so or not, even if it's a little amount, I heard that that stat includedwhether it was a small amount of money or a large amount, there's an expectation, a psychological seed that's been planted to say education's important. Now, something that you said that I want to clarify is can a 529 plan be utilized for tech school and apprenticeships, not just like a four-year college? Because I think there's an assumption out there that maybe it's just for four or two-year colleges.

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Yes, it can be used for tech schools, vocational schools, and even an apprenticeship. You know, there's data out there really reinforcing the benefits of a bachelor's degree. I think data from 10 years ago suggests that one with a bachelor's degree can earn over a lifetime close to $2.8 million more in income

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than one without a bachelor's degree or one with simply a high school degree. One with a bachelor's degree can start out earning 80% more than one with simply a high school education. So a bachelor's degree can be very important, but we're also talking about tech school, trade schools, vocational schools, apprenticeships. They are extremely important as well. In that situation, we're talking about matching up advanced skills with the needs of the labor market.And some of those degrees earned at tech schools, trade schools, apprenticeships, whatever, they are very rewarding and profitable professions for a lot of our young folks.

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When we look at nursing, we look at plumbers, we look at electricians.

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The list goes on of the need. There's a huge need, especially here in Nebraska for them. Yes, for sure. We have a workforce shortage in this state. You mentioned nursing in the medical field. We have a workforce shortage all across there, but relative to nursing, I read somewhere that by 2025, we're going to be short about 5,000 nurses. And that's not good.You know, we talk about growing our state all the time, moving our state forward. And it's hard to do when we have workforce shortages in some of these areas, saving and investing for college, enabling our young folks to get to college, get to a trade school, get the higher education that they need and want. That can help us solve that workforce crisis that we are facing now. That can get more of our young people in the workforce, in the areas where we need them. How do you set up a plan? Is it easy? Can anybody

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set it up? Can a grandparent, a friend of a family? How does that work? And then how does the kid or the beneficiary, I guess, would be the correct term, established for that plan?

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You bet. The plans are, we maintain you set up in 10 10 minutes they're easy to set up there's also some significant tax benefits to investing in these plans and then the dollars in these plans can be professionally managed and so it's really a win win win in my view and so you can go online to nest 529.com you can set it up online or you can request a packet to set it up. And then you can, once you set it up, you can begin contributing to the plan. And then at some point, your loved one, your child, your grandchild, whoever else might be,they can withdraw those funds for education-related expenses. And again, it can be used at a variety of schools, a variety of forms of higher education, tech schools, trade schools, four-year degrees, two-year degrees, whatever the case might be, even apprenticeships. And the definition of education-related expenses is quite broad. It can be used for most anything related to higher education.

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So let's, for example, let's say I set up a 529 for my son and I contribute. Can anybody else contribute to that plan as well? Yes.

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Could a grandparent, even though it's set up and I might be administering it for my kiddo. Others can set up, or excuse me, others can contribute to that plan as well. But they can also set up their own plan. They can be a grandparent, can be an owner of a plan for a grandchild as well.

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Oh, really? Yes. So you can set up the plan for any beneficiary. And that's probably the more desirable way to do it. Can a beneficiary have more than one plan? Yes.

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Beneficiary can have multiple plans, multiple owners.

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A grandparent can set it up, a parent can set it up, an aunt can set it up, an aunt can set it up, an uncle can set it up, whoever. What are the tax advantages then?

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There is a federal and state, excuse me, the earnings in the plan are free of federal and state taxation. There is a state tax deduction for your contributions to the plan. And that's why I say that it would be better if a grandparent or someone else wants to contribute to your plan, your beneficiaries plan.

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They may as well set up one on their own and take advantage of the – because there is a limit on the amount that can be deducted. Is there a limit to the amount that can be contributed to the plan?

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No. The amount that can be deducted, there's a limit on that. And the amount that can be, the amount that can accumulate in there, I think, is capped at 500,000.

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Okay.

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Yes.

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What if, just say, what if a child has a plan and they choose not to use it, what happens to the money?

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You can change the beneficiary to someone else in the family, essentially anyone else in the family, or you can let it sit there and wait and then pick a new beneficiary within the family at a later date. Or you can withdraw it, and if you withdraw it, it could be

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subject to some penalties. So one of the thoughts that I had, I was thinking about this today, could you use it for like, does it have to be utilized in schools within the state of Nebraska or can it be utilized outside of the state?

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It can be utilized outside of the state of Nebraska. And we actually have many plan owners here from out of state that some of which, some of this which will be used in schools out of state. All right.

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How can people find it?

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Nest 529.com or go straight to my website, treasurer.nebraska.gov. It's a great way to set up your child for success, set up your child or grandchild for success in a college education.

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Because you mentioned it earlier, Doug, you know, it is about the kids. As parents, as grandparents, we want to do what's best for our kids. We want to create opportunity for them. But as policy makers as well, that should be what drives us, creating opportunity for young folks to live and work and raise their families in Nebraska, raise their families with Nebraska values that you often talk about. And so that is the goal of parents and grandparents, but it should also be thegoal of every policymaker and decision maker in this state. And we talk about, create opportunity

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for young people. And we talk about wanting to retain our young people in the state itself to

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join the workforce here. Yes. We want to create opportunity for them. We want them to stay here. And there's a lot of things we could talk about in our efforts to do that. And you could talk about child care and housing and on down the line. But let's get them set up for higher education. Let's get them set up and help them achieve and attain the career that they want to pursue, and then let's do our best to keep them here.

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Wanted kids to be successful? We all do. Well, before we close out today, I wanted to chat a little bit about LB-1402. Senator Linehan's going to be in tomorrow to talk about it, but you shared with me before the show that the Treasurer's Office will be responsible for implementing the scholarships provided by 1402. How will that work? Yes, that is correct.

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We will be responsible for implementing that program, and we look forward to doing that, and we're talking about it just a day in my office and formulating a plan for putting that in place. But we will be responsible for administering that plan. We will likely hire a program managerto do more of the day-to-day work relative to that plan, we will likely hire a program manager to do more of the day-to-day work relative to that plan. But the legislation, LB1402, it set out a fairly stringent set of parameters as far as how to prioritize who gets the scholarships, the maximum amounts of these scholarships, or what the average maximum amount would be. So we will have to follow the legislation there. We don't have a lot of discretion pursuant to that legislation. There will be a little bit, though.So we will have some decisions to make as we determine how to prioritize things within the various categories.

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Well, when you mean, you know, I'm assuming the prioritization of that means choosing then who actually receives those scholarships from the applicants.

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Yes. Yes.

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That could be interesting. Yes.

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Because if you have more potential students that request the scholarships than you have funds, then you're going to have to decline some.

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You're going to have to decide who has priority over another student. That could be difficult. Yes. We will exert best efforts to make

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this program, one that all Nebraska's can be proud of. Well, I'm excited about that. It'll be

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interesting to see how that goes. There's a petition drive. The NSEA has another organization

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out there to try to eliminate that $10 million from the actual legislation

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that was passed, people are going to start seeing a lot of that petition drive happening over the next several, I think, three or four months. I've reached out to the NSA to see if they would come on the show after Senator Linehan comes on to kind of share their perspective of that and why. Do you feel, how do you feel about the current legislation?

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I think it's sound legislation. I have supported this type of legislation in the past. I think it's, again, I think it's another one of those programs that's good for kids. I think it creates opportunity for a subset of children that maybe don't have opportunity in the current situation. So I have supported it in the past. But now as treasurer,I'm no longer a policymaker. It's my obligation simply to implement this plan. And we will, again, we will exert best efforts to implement it in a way that all Nebraska can be

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happy with. All right, you declared May 29th as National 529 Day. Let quickly share about that. What's the importance of that day?

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529. It simply refers to the Nest 529 Day, quickly share about that. What's the importance of that day? 529. It simply refers to the Nest 529 college savings program. And we had a governor signed a proclamation here a few days ago. Honoring recognizing 529 is a very important day. And again, it's about creating an opportunity for young folks, setting them up for success in life. It's something we alldo as parents and grandparents, something we should all do as policymakers as well.

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Well, if you're interested in establishing one, go to Nest529.com. Nebraska State Treasurer, Tom Breezy, thanks for coming in. We appreciate it.

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You bet. Thanks for having me, Doug.

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Great to be here. Go back and listen to the podcast at KLAN.com. Special thanks to my producer today, Steve King. DTN Challenge of the Day. Take some time tonight, talk about establishing and contributing to a 529 plan for your kids. You'll be glad you did.