Nebraska Governor Pete Ricketts got off to a poor start last year and it appears as though 2016 won’t be any better. Ricketts kicked off the new year by initially refusing to meet with President Obama when he visited Omaha in January. This was an obvious snub since then Governor Johanns met with President Clinton when he came to Nebraska in the closing days of his Presidency in late 2000.
The disrespect Ricketts demonstrated caused a firestorm of criticism. The press demanded that he meet with the President and the Governor’s office was inundated with critical emails. Initially, Ricketts claimed he was too busy to meet with President Obama but he relented and rearranged his schedule. Ricketts thanked his staff for working hard to shake up his allegedly busy schedule but as it turned out all they had to do was move a speech up by 20 minutes. Obviously, Ricketts’ staff didn’t have to work very hard to make him available to meet with President Obama.
Some of Ricketts’ biggest mistakes and struggles last year involved his dealings with the Legislature. His top priorities didn’t even make it out of committee and three high profile bills – including a repeal of the death penalty – were passed over his veto. Several Republicans speaking on background were critical of his lack of engagement with the State Senators.
In 2016, Ricketts is trying to raise his game and he testified last week in front of the Revenue Committee regarding his latest property tax legislation. Ricketts’ plan would limit property tax increases to agricultural land to 3% per year and place limits on local spending.
The problem with Ricketts plan is that it isn’t a tax cut – it is a tax shift. According to the non-partisan Open Sky Institute, the Ricketts plan would cause large cuts to spending on education. Local school districts would have to either sustain big program cuts or increase local taxes.
In addition to potentially hurting Nebraska’s schools, Ricketts’ plan would finance this tax cut on agricultural land by raising taxes on both residential and business properties. This tax increase on homeowners and small businesses could cause property taxes to skyrocket for many Nebraska residential, business and commercial property owners.
This potential tax shift and program cuts encountered spirited opposition from cities, counties, school districts and other local government entities. Lincoln Mayor Chris Beutler contended that the consequences of the Ricketts plan could be “devastating” to local governments and even jeopardize the City of Lincoln’s coveted Triple A bond rating. A representative of the Stothert Administration testified that the proposed limitations on local government spending could hurt Omaha if it annexes additional land.
What appeared to be overlooked by Ricketts is that the state is not in a position to afford a large tax cut at the present time. Currently, commodity prices are down and this has caused a $110 million shortfall in state revenues. In addition to the tax cut that he proposed, Ricketts also wants to spend an additional $150 million on infrastructure improvements. A tax cut and increased infrastructure spending would jeopardize the state’s hard earned rainy day fund just when Nebraska’s economy is experiencing slower economic growth.
It must be emphasized here that Nebraska Democrats do favor responsible middle class property tax relief. In 2007, then State Senators Tom White and Steve Lathrop played instrumental roles in helping pass legislation that created a property tax credit for all real estate owners. This tax credit saved the owner of a $150,000 house approximately $141 in 2015. (This property tax cut was the subject of a controversial mailing that the state sent out late last year.)
Well informed sources at the Capitol tell me that Ricketts probably lacks the votes to pass his tax shift plan. In any event, we Nebraska Democrats must take nothing for granted. I would urge each and every one of you to contact your State Senator and express your concerns about Ricketts’ plan.
The ultimate solution to Ricketts’ ongoing reign of error is to elect more Democrats to the Unicameral this year. We have recruited an outstanding group of candidates and this should be a good election cycle for Democrats. We can’t let Pete Ricketts get a compliant Legislature and turn Nebraska into Kansas and Wisconsin. Now let’s get it done!
