Gov. Ricketts reveals two-year spending plan, calls for property tax relief in State of the State address

January 17, 2019

LINCOLN - Gov. Pete Ricketts unveiled a $9.3 billion two-year state budget during his State of the State address to the Unicameral this morning.

Ricketts said the state of the state was strong, mentioning a number of lists on which Nebraska ranks high for economic growth and business climate.

Ricketts told lawmakers his budget proposes a 3% growth to the General Fund, acknowledging that the state economy continues to suffer from an agricultural economy which has yet to rebound.

“Since 2013, farm income in Nebraska has been cut by over 60%,” Ricketts stated. “Think about that for a moment. When a family’s income falls by over half, you are forced to make tough decisions that have a significant impact on your way of life.”

Ricketts urged lawmakers to keep Nebraskans in mind as they work on the biennium budget he has proposed.

“As I worked on this two-year budget, I had one thing in mind: the people of Nebraska,” Ricketts said. “We have a responsibility to the people we care for and the people who pay the bills, the taxpayers. Let’s put Nebraskans first as we work on this budget.”

Ricketts proposed fully funding state aid to schools, adding nearly $104 million, bringing TEEOSA School Aid to a record $1.1 billion. Higher education would get a boost as well. The governor proposed providing $609.2 million to the University of Nebraska system, $54.8 million to the state college system, and $102.6 million to community colleges, all increases.

The Department of Health and Human Services would receive $240.9 million under the proposed budget with $63.1 million set aside to pay for voter-approved Medicaid expansion.

Ricketts outlined a three-step process to provide relief to the property tax burden, proposing adding $51 million to the Property Tax Credit Relief Fund each fiscal year, bringing the fund to a total of $550 million. The second step would establish a floor for the fund of $275 million with the third step being preventing local governments from raising property taxes by more than 3% through a constitutional amendment which would go before voters if approved by the legislature.

Ricketts added he is willing to listen to legislators on their proposals to ease the property tax burden.

“I know there will be many proposals introduced this year,” the governor said. “As we work together on property tax relief, any proposal should help control spending, fit into the budget, and cannot raise taxes on one group of people to reduce taxes on another.”

Ricketts also cautioned legislators to be careful with efforts to reform tax incentives aimed at luring businesses to Nebraska.

“As you work to reform incentives, I encourage you to keep in mind these goals. Nebraskans want tax policy that is simple, transparent, accountable, and attracts higher-paying jobs,” according to Ricketts.

Ricketts acknowledged the state prison population remains too high, high enough to trigger drastic measures to reduce it. The governor told lawmakers sentencing reform enacted by the Unicameral hasn’t been enough to bring prison populations below 150% of designed capacity.

“While sentencing reforms have helped control population growth in our prisons, new felony admissions mean our population has not decreased at the rate expected,” Ricketts said. “My budget recommends an additional 384 high-security beds, which will help assist in bringing our prison population below the emergency level set by the Legislature.”

Ricketts also proposed spending $6.6 million for additional staffing and inmate programming as well as $3.9 million to upgrade information technology at the Department of Correctional Services.

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