COLUMBUS — State Sen. Paul Schumacher sees difficult times ahead for the Legislature as lawmakers grapple with slashing the state’s two-year budget amid looming projections of a revenue shortfall in the tens of millions of dollars.
“It’ll be more of the same as the last session,” Schumacher told about 50 Columbus leaders during the Nebraska Chamber Legislative Forum held last week at the local chamber of commerce office.
“We won’t get around to any of the big stuff,” Schumacher predicted of the 60-day session that gets underway Jan. 3. Next year will be the senator's last in the Unicameral because of term limits.
The Columbus senator cited the conditions of the state’s finances and brevity of the 2018 session as the reasons lawmakers won’t be tackling major issues such as tax and prison reform and boosting community mental health services.
“Our state finances today are in pretty sorry shape,” said Schumacher, who was frustrated by 2017 budget cuts to aid for disabled Nebraskans and the big bite taken out of the state's cash reserve.
“I’m getting calls from moms about what they’re going to do for their 27-year-old disabled son,” Schumacher told the audience. “We’ve cut our cash reserves in half to where it’s dangerous."
The topic of tax reform consumed much of this year’s 90-day session. Gov. Pete Ricketts’ plan for a mix of property and income tax cuts ultimately failed on the floor of the Unicameral, but he has vowed to bring it back in 2018.
Tax reform, pushed by an agricultural sector that has been feeling the pinch of sharply rising land values and property tax bills, is viewed by Schumacher as a steep hill to climb.
Nebraska relies on a combination of income, property and sales taxes to finance local and state government, with the largest share coming from property taxes that help support K-12 public schools, cities and counties.
“Who’s going to replace property taxes for funding public education?” Schumacher asked. “That’s a tough nut to crack.”
During last week's forum, Jamie Karl of the Nebraska Chamber said the state has very limited power to affect local property taxes, especially with the upcoming legislative session being so short.
“The budget crunch will make it (tax reform) a very difficult uphill climb,” said Karl, vice president of public affairs and policy at the state chamber.
Karl told the chamber audience the key business-sponsored bills enacted in 2017 included unemployment insurance reform that saves Nebraska employers millions of dollars and regulatory changes to speed up transportation infrastructure projects.
The chamber executive also touted a chamber-supported grant program to help address the state’s workforce housing shortage.
The bill passed last spring, LB518, provides $7.3 million from the Affordable Housing Trust Fund to establish a dollar-for-dollar grant program. The grants will be available to communities in counties of fewer than 100,000 people.
A shortage of affordable housing is one of the factors local economic development officials identified for why Columbus businesses have trouble recruiting workers and filling job openings.