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Nebraska lawmakers to face tough issues in 2018 session

January 3, 2018

Neb. Speaker of the Legislature Sen. Jim Scheer of Norfolk, stands in the Legislative Chamber on the first day of the 2018 legislative session in Lincoln, Neb., Wednesday, Jan. 3, 2018. Scheer said he's confident lawmakers will have a positive, productive session this year but acknowledged he may be more optimistic than others. Lawmakers begin the 2018 session with a looming state revenue shortfall that could make it harder to pass new spending measures or tax cuts. (AP Photo/Nati Harnik)

LINCOLN, Neb. (AP) — Nebraska lawmakers set to work on a new session Wednesday with a looming state revenue shortfall and an expected push for tax cuts that would take effect once the state’s finances recover.

Senators kicked off the 60-day session with little drama, unlike the previous year, when conservatives won nearly all of the committee chairmanships on the largely ceremonial first day and sparked an angry rebuke from moderate and liberal legislators, who have traditionally shared some of the leadership positions.

Speaker of the Legislature Jim Scheer said he was hopeful lawmakers would have a productive session, but reminded his colleagues that no one would win every debate. The first 30 days of last year’s session were dominated by a contentious effort to make it easier to overcome filibusters.

“It was nice to start on a positive note,” Scheer said. “I’m looking forward to great things. I may be more optimistic than most, but I think we’ll have a great session.”

On Wednesday, senators introduced 119 new bills and filled two vacant positions.

Jim Doggett was chosen as the Legislature’s new sergeant-at-arms to replace Ron Witkowski, who retired last year after serving in the post since 2004. Staffers for the sergeant-at-arms help maintain order in the legislative chamber and carry notes to senators from lobbyists and others. They’re commonly known as “red coats” for the red jackets they were on the job.

Lawmakers also voted 25-24 to appoint state Sen. Robert Hilkemann of Omaha to serve as the new chairman of the Committee on Committees, which decides committee memberships.

A committee’s membership determines whether or not a bill advances to the floor. The panel had been led by former Sen. Joni Craighead of Omaha, who resigned from office in September. The rest of the Legislature’s committee chairmanships are already filled.

The biggest issue expected so far in this year’s session is the projected $173.3 million state revenue shortfall in the current two-year budget cycle. The Legislative Fiscal Office reported the figure in November, but the shortfall is expected to rise to $200 million because of a reduction in federal money to the Department of Health and Human Services.

The shortfall could force lawmakers to cut services, take cash from outside funds or withdraw money from the state’s emergency cash reserve. Raising taxes is likely off the table in the mostly conservative, one-house Legislature.

Gov. Pete Ricketts has said he plans to pursue a fresh tax package this year after his previous income and property tax plan stalled in 2017. Ricketts will present lawmakers with his agenda in his annual State of the State speech next Wednesday.

Sen. Jim Smith of Papillion, the chairman of the tax-focused Revenue Committee, said the governor’s plan would be phased in over several years to try to avoid the state’s current budget problems.

Ricketts has given few specifics, but lawmakers who support the tax plan may try to work around the current budget problems with so-called revenue triggers. The triggers would reduce income tax rates automatically in years when the state collects more money than expected.

Ricketts has said he supports the use of such triggers, although critics argue that they essentially put the state’s tax system on autopilot and could hinder its recovery after a sharp revenue downturn.

Ricketts said last week that he’s still waiting for an analysis by the Nebraska Department of Revenue that will predict how the federal tax bill might change the state’s finances. Passing a tax package could become easier if the state sees an uptick in revenue, but could make it harder if the federal law causes state tax collections to decline.

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

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