Proposals for water projects and property tax relief moved forward in the Nebraska Legislature Friday, as the official forecast for state tax revenues increased.
The biggest chunk of the state’s current two-year budget was approved last year. But now is when the changes people have proposed this year come into focus.
Friday, the Appropriations Committee voted to include two proposals in the recommendations it will send to the full Legislature next week.
One would raise the amount of state revenues devoted to offsetting local property taxes by $25 million a year. That could reduce property taxes on a $100,000 house by about $14 a year.
Another recommendation would use about $20 million in one-time money from the cash reserve and commit $11 million a year in ongoing appropriations for water projects like dams and reservoirs.
A task force created by Sen. Tom Carlson of Holdrege had sought up to $50 million a year. But Carlson said he is pleased. “We asked for $50 million and I had instructed everybody on the task force, and everybody that I talked to that our jaws are set and we are asking for $50 million and we’re not asking for less,” he said. “I think you have to have that attitude because you have to have a goal. And then you also end up being realistic,” he added.
Lincoln Sen. Kate Bolz said she still wants more clarity on what kind of projects the money will be used for. “We use water for so many purposes in our state. For irrigation, for public power, we use it for drinking, we use it for recreation,” she said. “We just need to make sure that the top priorities – and for me, one of the top priorities is drinking water for Lincoln and addressing the potential that our city in particular has for facing a drought and resulting water shortages – are taken into consideration,” Bolz added.
Carlson said the criteria for water projects will be spelled out in another bill to be taken up this year.
Friday afternoon, the state’s Economic Forecasting Advisory Board raised its projections for how much Nebraska will collect under existing tax rates for the current and next fiscal year. The board raised its estimate by $99 million over the projection it made last October.
In the grand scheme of things, that’s a little more than a one percent increase to the $8.2 billion previous projection. But it’s enough to set off a scramble over what to do with the extra money.
Following the board’s action, Gov. Dave Heineman issued a statement saying the Legislature’s priority should be tax relief for Nebraskans, not a “spending spree for special interest groups.”
But Anne Hindery, CEO of the Nonprofit Association of the Midlands, said cutting taxes based on projections could threaten schools, health care, and other services.
Appropriations Committee Chairman Sen. Heath Mello said the projections give the Legislature flexibility to put together a package that includes “responsible” tax reform with “investments” in water infrastructure, prison reform, and public education.