Ricketts unveils property tax package, prison funding plan

Published: Jan. 15, 2019 at 7:05 AM CST
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Gov. Pete Ricketts called on lawmakers Tuesday to approve a new property tax package and boost funding for Nebraska's prison system in the face of a looming state deadline to reduce overcrowding.

Ricketts unveiled the plans in his annual State of the State address that focused heavily on taxes while highlighting his new college scholarship initiative and a proposed tax exemption for military retirees.

"Property tax relief is the number one priority Nebraskans want as I travel the state, and many of you have shared similar stories with me from your districts," Ricketts said.

Ricketts is seeking a constitutional amendment to prevent local property tax revenues from growing more than 3 percent annually. The measure would require voter approval on the 2020 general election ballot.

The Republican governor's plan would provide $550 million over two years to the property tax credit fund, a 23 percent increase over the previous budget cycle. The fund provides state money to local governments to reduce what property owners would otherwise have to pay.

Ricketts said he was open to other ideas as well.

Speaker of the Legislature Jim Scheer said he hopes lawmakers will find compromise on property taxes without taking an all-or-nothing attitude that has sunk other recent proposals. The governor's package "is a good step forward, and progress can be made in future years," said Scheer, of Norfolk.

Sen. Lou Ann Linehan, chairwoman of the tax-focused Revenue Committee, said she agreed to sponsor the governor's proposal to cap local government revenue growth because it would prevent them from collecting too much at one time.

"You've got to put some kind of brake on spending," said Linehan, of Omaha.

The measure is likely to face opposition from local school districts and counties who face budget pressures of their own. Renee Fry, executive director of the OpenSky Policy Institute, said property tax caps "tend to have unintended consequences," and many tax policy experts oppose them.

The governor's proposed budget recommends an additional $49 million to build two new high-security units at the Lincoln Correctional Center and $6.6 million to increase staffing and inmate rehabilitation programs. The new units would allow for an additional 384 beds.

Nebraska's corrections department faces a July 1, 2020, deadline imposed by the Legislature to lower its inmate population to 140 percent of what its facilities were designed to hold. If the department falls short of that target , the prisons will fall into an automatic "overcrowding emergency" that will force state officials to consider paroling all eligible inmates right away.

Sen. Steve Lathrop, the chairman of the Judiciary Committee, said he still has questions about the prisons proposal given the corrections department's longtime struggle to address high employee turnover rates. Lathrop said many employees are leaving for higher-paying jobs at nearby county jails.

"If we're going to build more beds, how are we going to staff them?" said Lathrop, of Omaha.

Ricketts also called for increased state funding to K-12 public schools and the University of Nebraska, plus a scholarship program for students in high-demand areas such as engineering and information technology.

State spending would increase at an average rate of 3.1 percent annually under the governor's budget proposal. Ricketts said much of the increase is driven by the funding boost for K-12 schools and the voter-approved measure to expand Medicaid under the federal health care law.

"We have a responsibility to the people we care for and the people who pay the bills, the taxpayers," he said. "Let's put Nebraskans first as we work on this budget."

Governor Pete Ricketts' Fly Around Tour: Each one of the stops will be at the airport in the city the governor stops in.
Tuesday, Jan 15:
1 p.m. Grand Island
2:30 p.m. North Platte
3:30 p.m. Scottsbluff
Wednesday, Jan. 16:
2pm: Valentine
10am: Norfolk
3pm: Fremont