Prioritizing Balancing the Budget and Tax Reform

The 2018 legislative session has commenced! Last week, State Senators gathered at the State Capitol building in Lincoln to kick off the second session of Nebraska’s 105th Legislature. This is a short 60-day legislative session. From now until to mid-April, State Senators will be debating changes to the state budget and a variety of policies. Short sessions require the Legislature to focus on high-priority issues. During this session, many senators have said that the state budget and tax reform will be at the top of their lists.

There’s a good reason for making the budget a top priority. In October, the Nebraska Economic Forecasting Advisory Board revised revenue projections downward by $100 million for fiscal year 2018. For fiscal year 2019, the Board revised projections downward by $123 million. The Board’s actions will require the Legislature and me to work together and revise our budget.

As I have prepared budget recommendations, three principles have guided my budget-making process. First, my budget will rely on current revenues. Nebraskans expect the state to live within its means, and I will not support raising taxes. Second, any budget that is passed must be balanced. Third, the budget must restrain government spending to create a more effective and more efficient state government. My budget adjustment recommendations will be unveiled in my State of the State address.

Following my recommendations in my State of the State address, the Appropriations Committee will review the budget, hold hearings for public input, and forward a budget package to the full Legislature. I look forward to working with State Senators to bring the budget back into balance without raising taxes.

Adhering to these budget principles has helped create room for tax reform. Thanks to our work together constraining spending over the last few years, we have set ourselves up for tax relief. Working with the Legislature, we have successfully cut the rate of growth in state spending by 90 percent, from 6.5 percent before I took office to 0.6 percent for our current budget.

While the Legislature and I have provided over $840 million in property tax relief together over four years, additional steps must be taken to keep Nebraska growing. Nebraskans across the state want property tax relief. The call for tax relief is not just a desire. It’s an urgent need. I repeatedly hear stories of how high property taxes are impacting Nebraskans across the state. For example, this fall, a farmer approached me at an event to let me know high property taxes had driven him to sell his farm and leave the state.

Over the summer and fall, I have been sitting down with State Senators and groups interested in seeing tax relief happen. During my State of the State address, I will be unveiling a new tax plan that has property tax relief as its top priority in addition to other components. This plan will provide relief to ag producers, families, and businesses that are growing our state.

As with the budget, I have been following a couple of principles while working on tax reform. First, we are not going to increase taxes on Nebraska’s families and ag producers. Second, whatever change we make must fit into the budget. There are some tax reform efforts currently being promoted that could result in massive tax increases for Nebraska families or damaging changes that would eliminate state support for K-12 education or harm the state’s public safety agencies. I will oppose such efforts.

As we work on tax reform, it’s important that everyone come to the table in a spirit of compromise and cooperation. Tax relief must fit in this year’s budget through rigorous restraint of spending and growth. Together, we can accomplish some great reforms and set the state up to provide big tax relief into the future.

Throughout the session, I hope that you take time to stay connected to the work we are doing at the State Capitol. Your senators want to hear from you on the priorities that matter to you. Senator contact information can be found by visiting http://www.NebraskaLegislature.gov. My team also values your input, and you can reach us at [email protected] or at 402-471-2244.