2018 Legislature: tight times, big challenges

The 2018 legislative session begins at the Nebraska Capitol Wednesday. (Photo by Fred Knapp, NET News)
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January 2, 2018 - 6:45am

The Nebraska Legislature begins its 2018 session Wednesday facing a familiar list of issues, along with a familiar reason why they will be difficult to address: money.

Ask state senators what the big issues will be this legislative session, and you’re likely to hear something about the budget.  “(The) number one issue is going to be trying to resolve again the $173 million shortfall,” said Sen. John Stinner of Gering, chairman of the Appropriations Committee.

The word Stinner chose – shortfall, not deficit – is significant. The state is actually projected to end the current two-year budget period with a positive balance of nearly $50 million dollars. But the law requires the budget to contain a 2.5 percent reserve. In a nearly $4.5 billion budget, that requires a surplus of nearly $225 million. And the state is projected to wind up $173 million short of that, due to lagging tax receipts.

For a state budget status report, click here.

Arguably, lawmakers could ignore the shortfall, reasoning that the reserve requirement applies when the budget is being put together, and the shortfall surfaced after that.

But that risks cash flow problems. Lincoln Sen. Anna Wishart, a member of the Appropriations Committee, said doing nothing would be a bad idea.

“We need to make sure that we have a healthy budget. And that reserve requirement is important to make sure that we do have healthy margins,” Wishart said.

Like other lawmakers, Wishart is pulled in different directions. While she wants to close the budget gap, she also wants to avoid budget cuts that will hurt vulnerable people. And, she wants to spend more money to improve pay for prison guards.

“I will still be introducing legislation that creates longevity pay for correction officers. And that will likely be a pretty large budget item. But for me it’s a must for us to stop the high turnover that we’re experiencing and the level of overtime at the Department of Corrections,” she said.

Sen. Anna Wishart

Sen. Jim Scheer

Sen. John Stinner

Sen. Adam Morfeld (Senators' photos courtesy Nebraska Legislature)

Wishart said she would be interested in finding more revenue. And Sen. Dan Watermeier of Syracuse is pushing a bill, left over from last year, aimed at getting online retailers to collect sales tax, which could bring in millions more. It is a tax that is already owed, but rarely paid. The bill got hung up last year over constitutional objections, and politically, it faces an uphill battle.

A more likely way to address the shortfall is through budget cuts. Ask what is on the chopping block, and senators are likely to reply that everything is. But they quickly add what they think shouldn’t be cut. Stinner, for example, said, “I presume that we’re going to take a look at all of those (budget) items, still prioritizing K through 12 (education); still prioritizing the property tax relief fund, still prioritizing justice reinvestment. You do a work-around after you set those priorities.”

Stinner said his committee will begin its work with whatever budget adjustments Gov. Pete Ricketts recommends.

Speaker of the Legislature Jim Scheer, who sets the daily agenda, said he doesn’t plan to schedule debate on the budget anytime soon.

“I think what we’ll try to do is hold off budget discussions until we have that last hearing by the forecasting board,” Scheer said.

The last meeting of the Economic Forecasting Advisory Board during the legislative session is scheduled for February 28. By waiting to address the budget until after the board updates its revenue estimates, “at least we know what the final number is that we need to work with, rather than having to have the conversation twice in one session,” Scheer said.

Scheer said the first few days of the session will focus on introducing new bills. On Monday, debate will begin on a bill left over from last year, to require an inventory of federal funds and contingency plans for what to do if those funds are cut.

Taxes are another leftover issue. Last year, a proposal for income tax cuts and property tax relief stalled over objections from progressives that it would cut needed services, and from conservatives that it wasn’t enough. But Sen. Jim Smith of Papillion, chairman of the Revenue Committee, said he’ll keep pushing.

Meanwhile, Sen. Steve Erdman of Bayard said he will propose refunding half the property tax people pay for schools. That would cost the state over $1 billion dollars a year. Erdman acknowledges his bill is unlikely to pass, and supporters are gearing up for a petition drive to go around the Legislature and put it on the ballot.

While fiscal concerns may dominate the session, there will be plenty of other issues, too. They include authorizing charter schools, requiring voter ID, passing uniform gun laws, and creating a state version of net neutrality.

Lincoln Sen. Adam Morfeld said he will pursue a new approach to expanding Medicaid.

“We have failed to provide affordable health care for at least 90,000 Nebraskans, and there’s plenty more out there that need affordable health care,” Morfeld said. “At this point I am willing to try any option necessary including putting it on the ballot as a constitutional amendment,” he added.

The Legislature could do that, but it has refused to act on Medicaid expansion for the last five years. If that happens again, Morfeld said supporters may try to put expansion on the ballot using an initiative petition.

In odd numbered years, the Nebraska Constitution allows the Legislature to meet for 90 business days. But because this is an even-numbered year, that limit is 60 days. With a wry smile, Speaker Scheer recounted what some people say about that.

“One I hear most often is, it’s a short session, so we can only do so much damage in 60 days vs. 90 days,” he said.

Whether the result is damage or improvement, the outcome of the session will unfold as lawmakers do their work between now and their scheduled adjournment in mid-April.

Editor’s note: You can follow Fred Knapp’s daily legislative updates during the session, at 7:45 a.m. Central during Morning Edition, and 5:45 p.m. Central during All Things Considered.



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