Ricketts proposals on property taxes, education seen as modest by some

Jan. 22, 2015, 5:55 a.m. ·

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Gov. Pete Ricketts gives State of State speech to Legislature (Photo by Fred Knapp, NET News)

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In his State of the State speech Thursday, Nebraska Governor Pete Ricketts highlighted his legislative proposals, which several senators suggested were modest.


In contrast to his inaugural speech two weeks ago, Ricketts’ State of the State speech had more policy nuts and bolts in it. He talked about his budget proposal, and how it fits with property tax relief, which he’s identified as his number one priority. Ricketts offered senators two specific proposals. First, adding $60 million per year to the property tax credit relief -- that’s an existing fund that last year lowered the taxes on a $100,000 house by about $72 from what they would otherwise have been, which was about $1700 on a statewide average. At that rate, Ricketts proposal would save that homeowner about an additional $30.

The governor also told senators he wants to work with them to reduce the valuations on ag land, from 75 percent to 65 percent. Currently, someone who owns $1 million dollars worth of farmland is taxed as if it were worth $750,000. Ricketts wants to reduce that to $650,000. If that owner currently pays $10,000 in property taxes, the proposal could reduce that by about $1,300.

In his budget Ricketts sets aside $90 million a year for when and if the two property proposals are fully implemented. That’s 2.5 percent of the nearly $3.6 billion Nebraskans paid in property taxes last year. At a news conference following his speech, Ricketts was asked if that was enough to devote to what he says is his top priority. "Well, that’s just a start," he said.

Ricketts said he’ll work with senators on more proposals. Grand Island Sen. Mike Gloor, chairman of the Revenue Committee, said senators got a start on property tax relief last year. Gloor used a baseball analogy to suggest progress was slow. "It wasn’t a home run. It was bunts and singles," he said. And Gloor predicted that would continue. "I don’t think we can afford a homerun on property tax relief. It took us decades to get to the point where it’s been askew. And I think it will take a number of years of consistent monitoring and effort to get it back to the point where we can say we’ve done enough," he said.

Ricketts has also proposed a $23 million effort to relieve income taxes on military retirees.

On education, Ricketts is proposing a 3 percent increase in state aid to schools next year, and 1.6 percent the year after that. And Ricketts said his budget addresses manufacturers’ concerns that they can’t find enough skilled workers. "I have proposed an investment in innovation. My budget includes funding for a pilot program -- $250,000 in each year – to form a public/private partnership to create career and vocational training," Ricketts said.

To put that in context, the $250,000 a year compares to just under $1 billion a year that will be funneled through the general state aid to schools formula. Sen. Kate Sullivan of Cedar Rapids, chairwoman of the Education Committee, said Ricketts career and vocational education proposal was less than she’d hoped. "Admittedly, $250,000 when you look at those challenges doesn’t go very far," she said.

In his post-speech news conference, Ricketts didn’t offer any specifics when asked if there were particular fields the new program might involve. "This is a pilot program, so we want to find some private sector companies that want to work with us. And it will depend on their specific needs when we start the pilot," he said.

Sullivan said it’s also been difficult for senators trying to get a handle on specific fields in which companies have high needs. "We’ve contacted the Department of Labor and they said ‘We don’t really have any data identifying that. We can talk in generalities,’" Sullivan said. "If we have workforce needs, maybe we need to be more specific identifying what they are and where they are, and then aligning our educational system to support that," she continued. Will a pilot study help that? Perhaps."

Sullivan said she wants to work on the issue with Ricketts new director of Economic Development.

Ricketts also took time in his speech to recognize several people in the audience – including a doctor and two nurses from the University of Nebraska Medical Center who have treated Ebola patients. And he also singled out Susanne Shald of McCook, a widow with three children insured by Medicaid.

"She works hard and is intent on teaching her children the value of a great work ethic, just like her father taught her. So when her 16-year-old daughter got a job and was told that if she earned more than $6,000 a year she would lose her health insurance, Susanne was infuriated – and I don’t blame her," Ricketts said. "Susanne and her children put faces on our need for a common sense approach for a government that doesn’t create disincentives for people and families to work."

According to the Department of Health and Human Services, the Affordable Care Act, or "Obamacare," changed tax regulations in 2011 so that children’s income, formerly ignored in computing a family’s eligibility for Medicaid, now must be counted as part of a household’s income.

Lincoln Sen. Kathy Campbell, chairwoman of the Health and Human Services Committee said she was not aware of that provision of the law. Campbell is promoting expanding Medicaid under the Affordable Care Act, which Ricketts opposes.

But Campbell said overall, she thinks Ricketts laid a good foundation. "I have found in my conversations with the governor that he truly does listen and he wants to be collaborative, and so I thought the speech was a good beginning for working with the Legislature," she said.

The next five months of the legislative session will witness how much collaboration there is, and how much conflict, over taxes, education, health care and other issues.