LINCOLN–Gov. Pete Ricketts laid out his 2019 budget proposal in front of government employees and the public in his annual State of the State address, Jan. 15.
The proposal, which focused heavily on limiting property taxes and projects a 3.1 percent state spending increase each year, has received various reactions from state senators.
After listening to Ricketts, Sen. Dan Quick of Grand Island said he’s looking forward to the governor’s budget and revenue tax plan and the review by the Revenue and Appropriations committees, both of which he praised for their work.
“I agree with some of things that [Ricketts] said, so I think that’d be very good, especially for economic development in our state and to help grow those needs,” he said.
Sen. Dave Murman of Glenvil also felt positive following Ricketts’ address, which he described as short and sweet and to the point.
“He was supporting business in the state, keeping taxes as low as possible for individuals and businesses to be able to spend their money as they see fit rather than have the state or the government spend the money,” he said. “So, all values that I very much support.”
Sen. Steve Erdman of Bayard was leery about the prospects of Ricketts’ projected state spending increase, particularly in the midst of a steady drop in state tax receipts — December was the third straight month in which tax receipts declined.
“It’s a pretty aggressive budget, projecting a 3 percent increase in spending, when in fact, we may be going the other way,” Erdman said.
The drop in tax receipts, combined with Nebraska’s struggling agricultural industry, Erdman said, makes Ricketts’ proposal a recipe for state revenue issues. Nebraska ag took a $1 billion hit in 2018 after foreign countries imposed retaliatory tariffs following President Donald Trump’s tariffs on steel and aluminum imports.
“Agriculture is in the doldrums, and that’s the engine that drives this state,” Erdman said. “And untilagricultural economy improves, the state’s revenue will not improve as well.”
Although she was glad to hear Ricketts’ budget priorities and thoughts on economic development, Sen. Megan Hunt of Omaha said in-state talent retention — not property tax relief — should be the main focus in balancing the budget.
Ricketts announced his plans to create the Nebraska Talent Scholarship programs to help local colleges attract students in programs like engineering and healthcare. He said he also plans to provide the Developing Youth Talent Initiative with an additional $1.25 million annually. The program allows middle school students opportunities in manufacturing and technology within the state.
But, Hunt thinks Ricketts’ proposals don’t address the issue as firmly as they could.
“My biggest priorities are going to be about talent attraction and retention to our state, and I think that we have to put more of a focus on making this a state where everybody has the potential to start a small business, have a family, to not experience discrimination, to be able to be who they are,” she said. “I didn’t hear a lot of priorities for that in his State of the State address.”
Quick echoed Hunt’s beliefs on the importance of talent retention, saying that focusing on this can help the state with economic development.
“A lot of times, [students are] leaving our state to find jobs in other states,” he said. “And I think if we can impress upon the value that they provide for our state, I think that’d be good.”
Part of Ricketts’ address included the issue of prison overcrowding, which he said was partially affected by new felony admissions. His budget recommends $49 million for an additional 384 high-security beds and $6.6 million for a staff increase and new inmate rehabilitation programs.
Murman said the issue of prison overcrowding will require a multifaceted approach. He said although the state should look at paroles for nonviolent offenders, he still believed in those receiving punishment for their crimes.
“Of course, the most important thing is the safety of the public, so we can’t just drain our prisons,” Murman said. “It’ll probably be a combination of building more facilities, hopefully not spending a lot of money to do that, because we don’t have the funds, of course.”
Quick said visiting the Nebraska State Penitentiary with several other senators earlier this week was eye-opening to the issues the center is facing.
“I think there’s also some issues maybe still with some staff turnover and some of those that we’ll probably have to look at,” he said. “And then also programming for inmates to make sure that they’re getting their needs met so when they come out, they can come right back into society and maybe be more successful.”
Ricketts also said his budget includes steps to ensure that federal Title X dollars are not used to fund abortions, saying that “Nebraska is a pro-life state, and our budget should reflect those values.”
Although Murman found Ricketts’ comments on the value of life to be very important to him as a state senator, Hunt was more critical of his viewpoint. She said everyone has the right to control their “reproductive destiny,” and as a Title X patient herself, she uses the funds to get breast exams, well-woman checkups and pap smears.
“If we want to go by what the governor says and work toward his view of a Nebraska with a strong workforce with housing for everybody, with jobs for everybody, with education for everybody, we have to make sure they have access to health care, and that doesn’t just mean you can go to the hospital when you have the flu,” Hunt said. “There are many health issues that especially women face, and if we don’t putroom in the budget, then we’re not taking care of all Nebraskans.”
Ultimately, Hunt said budget cuts will hurt Nebraska’s ability to provide aid for residents. To make room in the budget for property tax relief, and corrections and Medicaid expansion issues, she said senators will have to work together to reach common ground.
“That might mean being open-minded about revisiting some things in our tax code,” Hunt said, “so I hope that the governor can be open-minded about having a conversation about that with the legislature.”