Ricketts stresses property taxes, roads; opposes Medicaid expansion

Gov. Pete Ricketts delivers 2016 State of the State speech (Photo by Fred Knapp, NET News)
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January 14, 2016 - 5:48pm

Gov. Pete Ricketts delivered his State of the State address to the Legislature Thursday, stressing proposals to deal with subjects like property tax relief and roads. Meanwhile, some senators questioned details of those proposals, and the governor’s priorities.


Toward the beginning of his speech, Ricketts made a little joke at his own expense. "Before we get started here today I want to thank my staff who worked so hard to juggle my schedule and make things work so I could be here today," he said.

Ricketts was referring to the controversy that erupted when he originally said he couldn’t meet President Barack Obama on his trip to Omaha Wednesday because he had to prepare for his speech. The governor later changed his schedule and greeted the president when he arrived on Air Force One.

Watch Governor Ricketts' 2016 State of the State Address.

 

Ricketts quickly turned serious, memorializing people including Marine Corps Helicopter Pilot and Kearney native Captain Dustin Lukasiewicz, killed in a helicopter crash during earthquake relief in Nepal, and Joe Lemm, a Beemer high school graduate and national guardsman killed by a suicide bomber in Afghanistan. "Where do we get such people? Thank God for Dusty and Joe and our Nebraska National Guard, and for all of our men and women who serve our country at home and abroad," he said.

When it came to his legislative proposals, Ricketts said property tax relief is still his top priority. He talked about Roger Brandt, a Wayne County farmer he mentioned in last year’s speech whose assessed value increased by a third to a half in just one year.

Last year, the Legislature approved more than 200 million a year for a property tax credit fund. But Ricketts said Brandt’s taxes still rose. "They went up again, nearly $2,700 and that’s after the property tax credit relief we passed last year.  While commodity prices stayed flat or declined, his property taxes rose nearly 10 percent," the governor said.

This year, Ricketts is proposing to limit ag land valuation increases to a statewide average of 3 percent. Projections by the Revenue Department show that could lead to actual reductions in some places, but still allow double-digit increases in others.

Sen. Dan Hughes of Venango, a farmer himself, said ag land values are still increasing. "To limit that increase is a step in the right direction. But they already are so far out of whack that it’s really not enough," Hughes said.

Ricketts is also proposing what he calls ‘structural reforms’ which he says will hold down taxes for all property owners. They include tightening lids on property taxes local governments like counties, cities, and schools can raise and spend.

Such lids already exist. But Grand Island Sen. Mike Gloor, chairman of the Revenue Committee, said they have holes in them. "There are a lot of opportunities for organizations under the lid to bring a lot of expenses that they deal with outside the lid," Gloor said.

Gloor gave the example of so-called interlocal agreements, under which if counties contract with another unit of government to provide services, they don’t have to count that spending against their lid.

But Lincoln Sen. Kathy Campbell, a former county commissioner in Lancaster County, which includes Lincoln, said interlocal agreements can save money. "In Lincoln and Lancaster County we have an interlocal agreement that there’s one health department. That there’s one personnel department. And we’ve tried to make sure that the city and the county didn’t duplicate functions," Campbell said.

Ricketts also endorsed spending more on roads. "Our businesses transport goods and services. Our farmers and ranchers feed our world on our roads and bridges. We get to work each day on our highways. We drive our children to school on our county bridges," he said. "Let’s help our local leaders keep and attract business. Let’s pass the transportation infrastructurebank," he said, to applause.

To fund such a bank, Ricketts is proposing to take $150 million from the state’s cash reserve over the next three years.

One thing the governor made it clear he does not want to spend more money on is expanding Medicaid coverage. "This government entitlement crowds out investments in tax relief, roads, and education – things we need to grow our state," he declared. In fact, Ricketts proposes to use about $85 million in unused Medicaid funds to help close a projected $110 million budget shortfall.

Omaha Sen. Health Mello, who along with Campbell and Omaha Sen. John McCollister is promoting Medicaid expansion, said opponents have to justify why they’re imposing additional health costs on Nebraska hospitals and people with insurance. "If we don’t see any kind of plan come forward from those who don’t like the plan that Sen. McCollister, Sen. Campbell and myself are coming up with, it‘s only fair to say that they’re just simply demagoguing an issue that they don’t really care about," Mello said.

Sen. Jim Smith of Papillion, a leading supporter of more roads funding, said he doesn’t think the state values roads more than what he suggested is a troubled health care system. "I don’t believe so. I think we have a system in place today that in my opinion is not effective in meeting all the needs that we have and now we’re looking to overburden that existing system by putting more people into it," Smith said.

Campbell said she has supported more roads funding in the past, but health care needs to be addressed. "There needs to be a balance here in terms of how we spend the state money, recognizing that good roads, good education and good health care are important," she said.

Deciding how to balance those and other competing priorities will be one of the main jobs of the Legislature and the governor moving forward.

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