Governor shares vision for growing Nebraska

January 29, 2019

Gov. Pete Ricketts’ vision to grow Nebraska includes developing talent, boosting efficiency, being good stewards of taxpayer money, and promoting the state.

Ricketts visited the Hastings Noon Rotary Club Friday to share that four-pillar vision for his Grow Nebraska program.

Ricketts began by citing several lists that placed Nebraska high for various business and quality-of-life criteria.

He brought along trophies recognizing Nebraska’s back-to-back wins of Site Selection Magazine’s Governor’s Cup.

Nebraska received the award for achieving the most economic development projects per capita in the nation in 2016 and 2017.

“That’s what those four pillars are all about, creating those opportunities for our families,” he said.

Among Ricketts’ initiatives for developing talent is expanding the state’s Developing Youth Talent Initiative grant program that began in 2015 with Hastings being one of the inaugural recipients.

As part of the initiative, businesses partner with local schools to create programs that expose seventh- and eighth-graders to manufacturing and information technology career opportunities.

Flowserve Corp. of Hastings was one of the initial recipients of the award, receiving $125,000 on behalf of the Hastings Public Schools’ manufacturing career pathways program.

Ricketts is proposing in this legislative session to expand that program from two grants each year to 12, with two grants in each of the community college districts in Nebraska.

Statewide, more than 7,000 students from 23 school districts have benefited from the Developing Youth Talent Initiative.

“We want to expand that even more,” he said.

Ricketts also is proposing a new postsecondary Nebraska Talent Scholarship program that provides $4,000 annual scholarships for students attending community colleges, state colleges and universities targeting the most-needed fields.

In Ricketts’ proposal, the program would begin with 65 scholarships for community college students, 250 for state college students, and 250 for university students.

The program would cost $260,000 for the first year of community college funding and $520,000 for the second year, as well as $1 million for state colleges and universities and $2 million for the second year, for a total budget impact of $6.8 million over the course of two years.

“That’s a way we can really help make sure our kids are getting the education they need to take the jobs we have available,” Ricketts said.

Graduation rates would be tracked and further adjustments made as necessary.

Ricketts has had conversations about a similar scholarship program for private colleges such as Hastings College, as well. While Ricketts said he isn’t opposed to expanding the program to private colleges, he wants to get the program started and demonstrate success and then look at expanding.

The state government already has taken several steps to address the second Grow Nebraska pillar, efficiency, with more steps planned.

State government has worked to become easier to do business with, cutting regulatory red tape. Efficiencies are being gained through the use of the Lean Six Sigma process improvement program.

One efficiency already gained was combining the Nebraska Department of Roads and Department of Aeronautics into the Department of Transportation.

Ricketts now is proposing combining the Nebraska Department of Environmental Quality with the Energy Office to create a new Department of Environment and Energy, finding synergies to do a better job serving customers and reducing costs.

He also proposes moving three inspection programs from the Department of Labor to the State Fire Marshal’s Office to enhance efficiency and public safety in the inspection process.

“There’s all sorts of opportunities there to see how we can serve our customers better,” he said.

There are several ways Ricketts wants to address the third Grow Nebraska pillar — being a good steward of taxpayer money — which involve controlling spending and providing tax relief.

Ricketts’ proposed budget rose only 3.1 percent with agency operations only growing 2.3 percent.

That increase amounts to $280 million in growth. Two expenditures amount to more than half of that amount: a $103.8 million increase to fully fund the school-aid formula and $63 million for the state’s portion of Medicaid expansion.

Ricketts also is proposing a $51 million increase to the state’s property-tax credit relief program, which would bring the total for that program to $275 million. That amount is nearly double what the state’s property-tax credit relief total amounted to when Ricketts became governor — $140 million.

He is working with state Sen. Brett Lindstrom to establish a statutory floor of $275 million for property-tax credit relief.

Currently, that credit is an appropriation in the budget. Ricketts wants it to be added into state statute to give taxpayers more certainty.

He also is proposing a constitutional amendment to establish a 3 percent limit to the amount property taxes can be raised.

Ricketts praised Craig Kautz, superintendent of Hastings Public Schools, who was in attendance Friday, for the job the district has done managing its budget.

“Craig has done an outstanding job in managing his budget and the property taxes that go along with it,” he said.

Ricketts said HPS property tax asking has increased only around 3 percent over the course of the last six years.

Other tax-relief proposals include a bill from state Sen. Steve Erdman for an income potential assessment for agricultural land as a way to be more fair to farmers and ranchers. Several other agriculture states already do this to help manage ag land valuations.

Ricketts said Nebraska ag land values have gone up 252 percent over the last 10 years. Property taxes on ag land have gone up 162 percent during that time.

“I’m going to work with the senators, but I do have some principles,” he said. “I’m not going to raise taxes.”

Achieving property tax relief is a key topic of this legislative session.

Another tax proposal is military retirement benefit reform.

Ricketts said five of the six states that surround Nebraska don’t tax military retirement benefits at all.

“If you look, that makes us uncompetitive with those states,” he said.

Veterans continue to contribute to Nebraska in retirement, he said.

When he was the chief operating officer of TD Ameritrade, several of his high-ranking employees were military veterans.

Ricketts’ proposal is a straight 50 percent tax credit of military retirement benefits for all veterans including National Guard members and Reservists.

As part of the fourth Grow Nebraska pillar, promoting Nebraska, Ricketts has visited Japan twice, China twice, the European Union, Canada, Mexico, New York and San Francisco, with more trips planned this year in an effort to open up markets for Nebraska products.

“There’s a lot of demand for a high-quality product, and just like any other business, we’ve got to go out and sell it,” he said.

Companies like Kawasaki have invested back in Nebraska.

Among questions Ricketts received at the end of his presentation is how the federal shutdown has affected the state government.

One aspect of the government shutdown that was concerning — farmers not receiving Farm Service Agency loans — was alleviated when FSA offices were opened for three days earlier this month.

SNAP benefits were paid out early with recipients receiving February support in January.

A lot of state agencies have been funded through September.

“We’re keeping our ear to the ground, but so far the impact has been fairly minimal,” Ricketts said. “Obviously, the longer that goes on the more likelihood there is a chance of an impact.”

Later Friday afternoon, President Donald Trump announced a deal with Congress to reopen the federal government.

Another question was about online sales tax. Online sales tax collection officially began Jan. 1.

Those sales tax dollars should start to be remitted to the state in February.

Ricketts said the state is forecasting $30 million to $40 million in sales tax revenue to be generated each year. He said that entire amount should go to property tax relief as part of the $51 million property-tax credit relief increase.

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