Legislature discusses budget, tax cuts

Nebraska senators debating Tuesday (Photo by Fred Knapp, NET News)
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March 13, 2018 - 5:45pm

Nebraska lawmakers wrestled with which direction the state should head on spending and taxes, Tuesday, as they debated the budget and a new tax plan was unveiled.

The budget proposed by the Legislature’s Appropriations Committee cuts state agencies by two percent this year and two percent the next, except for higher education, which would get a one percent cut. It also takes $100 million from the state’s cash reserve to balance the budget. Sen. Kate Bolz, vice chair of the committee, said dipping into the cash reserve is justified. “The cash reserve transfer is in the name of other priorities. It’s in the name of protecting higher education; it’s in the name of keeping a lot of the programs and priorities that we have in our state budget stable,” Bolz said.

The proposed budget would leave about $296 million in the state’s cash reserve at the end of the current two-year budget period. Proposed tax cuts could reduce that still more. Sen. John Stinner, chair of the appropriations committee, said he views $250 million as the minimum that should be kept in the cash reserve. That’s about three weeks worth of the state’s annual funding. Sen. Steve Erdman argued that’s not enough. “We stand up here and talk about $250 million is a good reserve, and we’re fine with that. If this state was a business and we were applying for a loan and we had 20 days of working capital in reserve, we wouldn’t get a loan. This state is in dire need of cuts,” Erdman said.

Sen. Adam Morfeld accused Erdman, a former farmer, of hypocrisy. “To sit here and talk about we need to cut government, and all he sees when he drives in the morning is government programs, government programs, government programs, is a bunch of hypocritical nonsense,” Morfeld said. “He only needs to wake up every morning and look out his window and there’s a big government program right there. It’s called his farm operation. And so to stand up here and talk about how all we need to do is cut, cut, cut and not to look in the mirror is nonsense,” Morfeld said.

Erdman collected $170,000 in farm payments between 1995 and 2011, according to the Environmental Working Group. He said he sold his farm in 2012, and the records show no payments after that.

Sen. Patty Pansing Brooks urged civility in the debate. “The budget is not numbers alone. It’s a social document. And to claim otherwise is disingenuous,” Pansing Brooks said. “We have to work together for the good of our people. We all represent approximately 36,000 people. So I would ask us all to take a breath,” she said.

The Legislature advanced the first two parts of the budget, authorizing transfers from the cash reserve and transfers from various other funds. Then lawmakers got into a debate on the main budget bill.

There, the main sticking point was Gov. Pete Ricketts proposal to prohibit giving federal Title X family planning funds to any organization that provides or refers patients for abortion. Supporting, the proposal, Sen. Dan Watermeier said it would not reduce available services, and any organization could still get the funds if it separates its abortion services administratively from its other services. “If every single one of these dollars went to Planned Parenthood for them to provide services, I’m fine with that. We need to have a very strict concrete wall so that we do not lose the $1.5 million of Title X funding. And this amendment inside of the budget bill does exactly that -- no more and no less,” Watermeier said.

This is where Nebraska's Title X funds go this fiscal year (Source: Nebraska Dept. of Health and Human Services)

Sen. Adam Morfeld said the proposal would hurt services. “Out of the 28,000 Nebraskans that actually utilized Title X funding for family planning services, 8,000 of them are served by Planned Parenthood -- the exact agency and organization that this bill is targeted towards, Morfeld said.

Also Tuesday, Sen. Jim Smith unveiled the latest version of what he said was his and Gov. Pete Ricketts’ tax plan. The proposal would give Nebraska resident owners of agricultural land a refundable credit on their income tax equal to two percent of their property tax for 2018, and owners of residential property a one percent credit. Those credits would increase gradually until they both reach 20 percent of property tax liability by 2017 for agricultural land, and 2030 for residential property. The proposal would also cut corporate income tax rates from 7.81 to 6.84 percent in 2019. The Revenue Committee is expected to discuss the proposal Wednesday. For NET News at the capitol, I’m Fred Knapp.





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