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Budget, taxes loom large in upcoming Nebraska session

January 6, 2019

LINCOLN, Neb. (AP) — Nebraska lawmakers are set to kick off a new session Wednesday with proposals to balance a tight state budget, lower property taxes and legalize medical marijuana in the face of a potential ballot measure.

The new, 90-day session will also usher in 13 new state senators who will reshape the officially nonpartisan Legislature in ways not yet known.

Here are some things to watch:

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THE BUDGET

A persistent state revenue shortfall could create budget headaches once again for lawmakers, who have relied on Nebraska’s rainy-day fund the last several years.

Nebraska faces a projected $95.1 million revenue shortfall in its upcoming two-year, general fund budget.

It’s a tiny fraction of the roughly $9 billion total state budget and smaller than other recent shortfalls, but some lawmakers worry the downturn will continue and they won’t have enough money left in the rainy-day fund to cover state expenses. The fund holds about $296 million, down sharply from the $729 million stashed away in 2016.

“I think we may be getting to the point where we can’t afford to use any more of that,” said Speaker of the Legislature Jim Scheer, of Norfolk.

In an interview last week, Gov. Pete Ricketts said tapping the cash reserve was appropriate given the downturn in agriculture, the state’s largest industry. Ricketts has previously said he’d like to keep about $500 million in the rainy-day fund.

“The reason you have a rainy-day fund is to help cushion against economic downtimes,” he said. “In agriculture, it’s clearly raining.”

Lawmakers will also debate how to pay for a voter-approved measure to expand Medicaid to an estimated 90,000 low-income residents. Ricketts said he will fit that expense into his budget proposal to lawmakers, but it’s likely to crowd out other priorities over time.

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PROPERTY TAXES

Lawmakers will try once again to address the complaints of farmers, ranchers and homeowners who have seen sharp increases in their local property tax bills.

The issue rises to the forefront nearly every year, but lawmakers seldom agree on how to pay for property tax cuts and who should receive most of the benefits.

“I’m relatively optimistic we can get something done this year,” said Sen. Tom Briese, an Albion farmer who has introduced numerous property-tax proposals. “A lot more folks are realizing the gravity of the situation.”

The biggest recipient of property tax dollars are K-12 public schools, particularly in rural districts that no longer qualify for state equalization aid because they contain too much valuable land. Farmers argue that they’re paying higher property taxes even though lower commodity prices have reduced their incomes.

Sen. Patty Pansing Brooks, of Lincoln, said she understands the pressure farmers are facing and wants to help, but she also sees needs in her urban district.

“We have to work together,” she said. “The conservative and rural members need to work with the urban senators and the progressives to really get something done.”

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ELECTING NEW LEADERS, SETTING THE RULES... AND MORE GRIDLOCK?

Lawmakers will choose new committee leaders in a secret-ballot election that’s often full of surprises.

During the last elections in 2017, conservative Republicans won nearly all of the Legislature’s leadership positions and tried to force through a change that would have made it harder for Democrats to win committee chairmanships in the future. Democrats and even some moderate Republicans blasted the moves as a partisan power grab, and the dispute brought the Legislature to a virtual standstill for 30 days.

The leadership votes were highly unusual in an officially nonpartisan Legislature, where committees are traditionally led by a mix of Republicans and Democrats. The new session will mark the first time lawmakers have formally addressed those issues since 2017.

Pansing Brooks said she’s hopeful lawmakers will try to build coalitions more than they have in previous years.

“The original my-way-or-the-highway approach doesn’t work,” she said. “People are starting to realize it takes coalitions, it takes people working together.”

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MEDICAL MARIJUANA

Nebraska lawmakers could face more pressure to legalize medical marijuana in some form, thanks to a group of senators and activists who are promising to put the issue on the 2020 ballot if nothing passes this year.

A newly formed ballot committee, Nebraskans for Sensible Marijuana Laws, plans to launch a signature-gathering campaign, although organizers said they’d prefer that lawmakers address the issue. Sen. Anna Wishart, of Lincoln, a leading proponent, will introduce a medical marijuana bill this year.

Similar measures won approval last year in Missouri, Oklahoma and Utah, bringing the total to 33 states that have legalized the drug for medicinal purposes. Unlike past efforts in Nebraska that have faltered, the latest campaign is backed by the Marijuana Policy Project, a national group that has helped lead five successful marijuana-related ballot measures.

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Follow Grant Schulte on Twitter at https://twitter.com/GrantSchulte

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