You can’t have it both ways. Our parents told us that. We learned it from sometimes-painful experience. Yet, we often forget and think maybe this time it will be different.
The 2018 Legislature is back at work and the Governor is saying that he wants to provide meaningful tax relief for all Nebraskans while closing a $200 million gap in the state budget. Pardon me while I ask, again, what is the largest source of state revenue? Taxes? Do you see my confusion here?
Perhaps there is a magic pill. Maybe a magic wand that is yet to be waved. Or maybe it’s just the Kansas way, keep cutting the budget until it hurts really bad.
With his own tax plan trapped by a legislative filibuster last session – and still awaiting floor action –Governor Pete Ricketts said he’ll be pushing for a revised version of that tax reduction package that would combine corporate and personal income tax cuts with reductions in the valuation of ag land for local property tax purposes.
Some state senators, frustrated by last year’s less than successful effort, are sponsoring a bill to provide an estimated $1.1 billion in annual property tax relief by reducing the local school property tax load by up to 50 percent. If that fails, they are mounting a petition drive to put the question to voters in November.
Ricketts has raised a warning flag about that, noting the cuts that would have to be made to cover the $1.1 billion reduction. But proponent Sen. Steve Erdman of Bayard said state budget reductions could be accompanied by elimination of some sales tax exemptions. Erdman has suggested that state budget reductions could potentially be accompanied by elimination of some
exemptions to the state sales tax as a dual means of supplying revenue needed to help fill the gap in tax support for schools.
The Governor doesn’t like the potential option of attempting to increase revenue without hiking tax rates, a pathway that could be opened by elimination of some sales tax exemptions or business tax incentives. He said Nebraska is already a high-tax state. His option? Creating an environment that will cut red tape and create more job opportunities while controlling spending.
In his New Year’s message to the state – it was a press release that you may have seen – the Governor said, “In good times and in bad, Nebraskans work together to get things done and move our state forward. When we see a need, we go out and meet that need.”
That sounds like teamwork. Here’s hoping that spirit will prevail in the weeks ahead because the tax and budget concerns, while the biggest the state faces, aren’t all the problems that need to be addressed.
Ricketts said he has been in extensive negotiations with tax reduction proponents along with Revenue Committee Chairman Sen. Jim Smith of Papillion. But he has vowed to work with all senators on the priorities Nebraskans want. It will be interesting to see how many of those “other” priorities can be addressed in a short session.
He spoke of the teamwork experienced in the 2017 session and said, “Working together, we can accomplish great things.”
Remember, this is an election year and half of the legislative seats (the even-numbered districts) and the governor are on the ballot. That changes the mood and the drama in the legislative chambers.
Let’s hope that enough senators are on board with Ricketts’ teamwork idea to make good things happen, without giving away the farm.
J.L. Schmidt is the statehouse correspondent for the Nebraska Press Association. He has been covering Nebraska government and politics since 1979. He has been a registered Independent for 19 years.