Ricketts proposes cutting budget and taxes

Gov. Pete Ricketts delivers his 2018 State of the State speech (Photo by Fred Knapp, NET News)
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January 10, 2018 - 5:08pm

Nebraska Gov. Pete Ricketts promised to try again to deliver tax relief he says Nebraskans are demanding. His comments came in his annual State of the State speech Wednesday, which also included a proposal for another round of budget cuts. And in the Legislature, lawmakers have killed the latest attempt to repeal the state’s requirement for motorcyclists to wear helmets.

It was Rickett’s fourth State of the State speech, and he spent the first half of it celebrating achievements, ranging from trade deals and investments, to greater government efficiency. Then, he got down to the nitty-gritty issues expected to dominate this legislative session. The first was the budget, which has a $173 million projected shortfall. Ricketts announced his proposed solution, including across-the-board reductions of 2 percent in this fiscal year and 4 percent in the next.

That would save about $77 million, and include cuts of more than $4.5 million to the State Patrol, and nearly $35 million to the University of Nebraska. Ricketts is also proposing to borrow more than $100 million from the state’s cash reserve, which would bring it down to below $300 million, compared to more than $700 million two years ago.


Watch Governor Pete Ricketts' 2018 State of the State address to the Nebraska Legislature.

But there are exceptions to the governor’s proposed budget cutting. One involves children. “We have seen a significant increase in the number of children coming into the state’s child welfare system. Annually, we’re up about 9 percent, or about 485 kids,” Ricketts said, adding “Folks, that’s heartbreaking.” In his budget, he is recommending an additional $35 million for child welfare and public assistance for this year and next.

Ricketts said about one-third of children removed from their homes were removed because their parents were using methamphetamine. Sen. Kate Bolz agreed that is a serious problem. But Bolz said another is that the Department of Health and Human Services is not meeting legal requirements to reduce caseloads for child welfare workers, resulting in high turnover. “Without sustainability and experience in our child welfare staff, we can’t make sure that those kids are in safe, stable, successful placements,” Bolz said.

Ricketts also proposed exempting school aid from cuts, increasing the number of corrections officers, and adding 100 beds to the Nebraska State Penitentiary.

But it was on taxes that Ricketts made possibly his most far-reaching proposals. He promised once again to try and achieve property and income tax relief. “It’s an urgent need. We must help our farmers and ranchers with crushing property tax bills. We must help all Nebraskans keep more of their hard-earned money, and attract more people to come to our state,” he said.

To do that, Ricketts proposed redirecting an existing credit that goes to all property owners. Under his proposal, it would go only to owners of agricultural and residential property, not commercial or industrial property. It would exclude people who live in other states but own property in Nebraska. It would also exclude people who rent property, who don’t get the existing credit, but whose landlords do, and may factor in those savings when calculating rent. The credit starts at 10 percent of property taxes paid, and would increase if revenues exceed projections.

Ricketts proposal, introduced by Sen. Jim Smith, chairman of the Revenue Committee, would also reduce the top income tax rates of 7.81 percent for corporations and 6.84 percent for individuals down to 6.69 percent for both, by 2020. Sen. Tom Briese, who’s working with farm and education groups on his own proposal for property tax relief, said his plan will differ from the governor’s. “My proposal will identify new revenue sources to be directed towards property tax relief, while at the same time protecting the interests of K-12education,” Briese said.

Briese said he would use income, sales, and excise tax dollars to restore some state aid to schools that’s been cut in recent years, as well as capping how much property tax can be used. He will introduce the plan in the next few days.

Ricketts also proposed ensuring that federal Title X funds are not used to fund abortion. Those funds are used to provide birth control largely to low income women by organizations including Planned Parenthood, which would be denied funding under the proposal. Planned Parenthood said those funds can’t be used for abortion and it doesn’t do so; opponents argue providing funds to Planned Parenthood indirectly supports abortions by supporting an organization that provides them.

Responding to the Republican governor’s speech, Nebraska Democratic Party Chair Jane Kleeb said “Gov. Ricketts fails to address how we will fix the $200 million budget shortfall as he throws the predictable political football of abortion.”  

In other legislative action Wednesday, yet another attempt to repeal Nebraska’s motorcycle helmet requirement has failed. Faced with a filibuster by repeal opponents, it would have taken a two-thirds majority, or 33 senators in the 49-member Legislature, to invoke cloture and proceed to a vote. Repeal supporters mustered only 30 votes, leaving their effort dead for the year.



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