State of the State

Gov. Pete Ricketts gives his State of the State address on Wednesday in the Norris Chamber at the Nebraska State Capitol.

LINCOLN — With extra money to spend, Gov. Ricketts earmarked funds to lower the state’s traditionally high property taxes, help repair flood damage and address the state’s workforce shortage.

In his State of the State speech on Wednesday, the Republican governor also thanked first responders, state workers and everyday citizens who jumped in to help when Nebraska was swamped by flooding last March. He called it the state’s “finest hour.”

“When we were faced with the most widespread and costliest natural disaster in state history, Nebraskans responded with heroic grit, determination, resilience and generosity,” Ricketts said.

His policy ideas won praise from several state lawmakers for addressing each of the state’s top priorities. But the plaudits were not unanimous.

State Sen. Steve Erdman of Bayard said the governor’s property tax proposal, which earmarks $520 million in relief over three years, doesn’t go far enough.

“It really isn’t a whole lot to really alleviate the problem,” said Erdman, who is a leading supporter of an initiative petition drive seeking a 35% rebate on property taxes paid.

The governor is generally backing a bill crafted by the Legislature’s Revenue Committee bill, which would provide about a 13% to 15% break in property taxes paid to schools.

To address high turnover and a shortage of corrections officers, Ricketts is devoting $8 million to increase pay checks and provide for raises for longevity.

But the governor did not include any new funds for prison construction, which has been advocated by unions representing prison workers and Omaha police.

Ricketts said a proposal to start planning a new, 300-bed work-release prison in Omaha is not a priority at this time, though adding new prison beds is regularly considered.

That isn’t enough to resolve the “crisis” of prison overcrowding in Nebraska, which ranks second-worst in the country, said Omaha Sen. Steve Lathrop, who proposed the Omaha prison.

Lathrop said that while he’s grateful that Ricketts moved to increase pay for corrections officers, the only other solution to lowering overcrowding besides new prison beds is to reform or shorten prison sentences.

“We look forward to his leadership in sentencing reform,” the state senator said.

Wednesday marked Ricketts’ sixth State of the State since being elected in 2014.

Property tax relief, repairing flood damage, improving the state’s economy and addressing some deficiencies in social services took center stage.

“I think he hit the mark on all of the top priorities of the state,” said State Sen. John Stinner of Gering, who heads the Legislature’s Appropriations Committee.

The governor placed property tax relief as his top priority.

Ricketts said he agrees with the “framework” of the Revenue Committee’s proposal, Legislative Bill 974, and plans to continue devoting $275 million a year to the state’s property tax credit program. Funds for the new property tax relief bill would come from excess state tax revenue, which has exceeded forecasts in recent months.

In his speech, the governor made his pitch for a stricter lid on local spending, which is one of the most controversial aspects of LB 974, and one that’s been opposed by the state’s largest school districts, including Omaha and Millard.

“We need local spending restraint because, over the last 10 years, local governments have raised local property taxes 54% while inflation only grew at 17%,” he said.

To address the workforce shortage, Ricketts pitched a plan that stalled last year. It would earmark $16 million over the next three years for scholarships for students studying in high-need, better paying fields, such as math, engineering, health care and information technology. State business leaders have called the workforce shortage a “crisis” in the state.

He said he’s devoting $3.8 million to repair on a collapsed irrigation tunnel that funnels water to farmers in Nebraska’s Panhandle, and sending $9.2 million to about a dozen Nebraska cash-strapped counties to help them qualify for federal funds to repair flood-damaged roads and bridges because the farmers and counties can’t afford the entire cost.

“The state must do our part,” he said during the speech, noting that more than $400 million in requests have been filed for federal disaster relief.

The governor’s budget would increase spending by 4.4%, but he pointed out that if the extra funds for property tax relief are removed, the growth in state government would be 2.9%. Ricketts has often said he wants to limit growth in state spending to 3% a year.

Ricketts also urged state lawmakers to pass a bill to renew state tax incentives for business expansions. LB 720 was blocked from passage last year. The Holland Children’s Institute criticized LB 720, saying the governor should help struggling families rather than provide millions in tax breaks for big corporations.

World-Herald staff writer Martha Stoddard contributed to this report.