Whether economic forecasters for Nebraska were optimistic or pessimistic depended Thursday on how far they lived from the state's urban centers.
But the Nebraska Economic Forecasting Advisory Board came to some compromises in predicting state revenue, and lowered the revenue predictions for this fiscal year and the next two by about $110 million.
That will translate to the state's rainy day fund losing $69.2 million and a lowering of state budget revenue of $39.5 million.
The Legislature's Appropriations Committee is in the midst of developing a budget for the 2019-21 fiscal years. Chairman John Stinner said after the meeting the committee can make the necessary adjustments to the budget needed in light of the lowered revenue.
But there is concern about the cash reserve going down to about $278 million by the second year of the budget. And there won't be much money for senators' proposals this session that have price tags attached.
The forecasting board makes predictions on sales, individual income, corporate and miscellaneous taxes. Sales and individual income tax forecasts were the most controversial among forecasting board members, and were the ones most often lowered.
They will meet again April 25 for another forecast of tax revenue.
Net tax receipts have been below forecast for at least the past four months.
Gov. Pete Ricketts said the forecast will be used in the next several months to consider how to balance the state budget without raising taxes.
"Ultimately, the next two-year budget will be built on the April forecast after final individual income tax receipts have been reported,” he said.
Members of the board from eastern Nebraska and urban areas had upbeat reports during Thursday's meeting about the economic activities in their cities in terms of jobs and construction outlooks.
Many of the members, however, were more pessimistic about the number of workers available in Nebraska and deterioration in the quality of those workers.
Leslie Anderson, president and chief executive officer of the Bank of Bennington, said that while construction was booming in the eastern part of the state, and small businesses were doing well, the labor shortage is starting to cause wage inflation.
Thomas Henning, president and CEO at Cash-Wa Distributing Co., said that in Kearney and Buffalo County there are about 1,100 unfilled jobs.
Many of the members agreed the agricultural slowdown is continuing.
John Kuehn, a rancher, veterinarian and professor from Heartwell, and a new member of the forecasting board, said a lot of the discretionary choices people are making in agricultural purchases are being delayed.
"And I think that's going to have a really continued ripple effect through our local economies, which hurts many of our rural economies," he said.
Other economic indicators he has seen among college students and their families, especially in the past year, are financial stress, hunger insecurity and inability to make tuition payments.
"You see in attendance rates, kids leaving school midterm, midyear because of financial stress, really starting to snowball in some of our institutions of higher education," Kuehn said. "So we need to begin to keep an eye on that sector as well as an indication of how Nebraska families are able to spend what discretionary income they have."
The nation's farmers are struggling to pay back loans after years of low crop prices and export markets hit by tariffs, with a key government program showing the highest default rate in at least nine years.
Many agricultural loans come due about Jan. 1, in part to give producers enough time to sell crops and livestock and to give them more flexibility in timing interest payments for tax-filing purposes.
"It is beginning to become a serious situation nationwide at least in the grain crops — those that produce corn, soybeans, wheat," said Allen Featherstone, head of the Department of Agricultural Economics at Kansas State University.
While the federal government shutdown delayed reporting, January figures show an overall rise in delinquencies for those producers with direct loans from the Agriculture Department's Farm Service Agency.
Nationwide, 19.4 percent of FSA direct loans were delinquent in January, compared with 16.5 percent for the same month a year ago, said David Schemm, executive director of the FSA in Kansas. During the past nine years, the agency's January delinquency rate hit a high of 18.8 percent in 2011 and fell to a low of 16.1 percent when crop prices were significantly better in 2015.
While those FSA direct loan delinquencies are high, the agency is a lender of last resort for riskier agricultural borrowers who don't qualify for commercial loans. Its delinquency rates typically drop in subsequent months as more farmers pay off overdue notes and refinance debt.
With today's low crop prices, it takes high yields to mitigate some of the losses and even a normal harvest or a crop failure could devastate a farm's bottom line.
Many bankers also are concerned about farm conditions. Several of the Nebraska bankers interviewed for the most recent Ag Credit Survey from the Kansas City Federal Reserve, released Feb. 14, said they expect farmers to have to refinance loans or sell assets to increase working capital and shore up debt and liquidity positions.
The situation now is not as bad as the farm credit crisis of the 1980s — a time of high interest rates and falling land prices that was marked by widespread farm foreclosures. At the height of that crisis in 1987, U.S. farmers filed 5,788 Chapter 12 bankruptcies. There were 498 in 2018.
However, those bankruptcy numbers are climbing, especially in the Plains and Midwest. Nebraska had more farm-related bankruptcies in 2018 than every state except Wisconsin, and the numbers, though small, have tripled since 2015.
Some fears are also surfacing in reports such as one this month from the Federal Reserve Bank of Minneapolis, which said the outlook is pessimistic for the start of this year, with respondents predicting a further decline in farm income. About 36 percent of farm lenders who responded said they had a lower rate of loan repayment from a year earlier.
Creighton University Economist Ernie Goss' February survey of rural bankers in parts of 10 Plains and Western states showed that nearly two-thirds of banks in the region raised loan collateral requirements on fears of a weakening farm income. The Rural Mainstreet survey showed nearly one-third of banks reported they rejected more farm loan applications for that reason.
Grain prices are down because farmers around the world have had above-average production for several years. But some nations' economies are not doing as well, decreasing demand for those crops, Featherstone said. Grain prices peaked in 2012 and prices have roughly fallen 36 percent since then for soybeans, 50 percent for corn and 48 percent for wheat.
When President Donald Trump imposed tariffs, China retaliated by stopping soybean purchases, closing the biggest U.S. market. While trade negotiations with China continue, many farmers fear it will take years for markets to recover — as it did when President Jimmy Carter imposed a grain embargo on the then-Soviet Union in 1980.
In 2018, the Lincoln Police Department investigated 10 suicides with firearms, Chief Jeff Bliemeister told the Legislature's Judiciary Committee on Thursday.
Forty percent of Lincoln suicides in the past 23 years involved use of a firearm. And the majority of those men, women and children were not prohibited by law from possessing those guns, he said.
Some of those deaths could have been avoided by a controversial bill (LB58) introduced by Lincoln Sen. Adam Morfeld that would enable law enforcement to remove firearms from a person at high risk of harming themselves or others, he said.
Changes to Nebraska gun laws for safety sake were the topics of hearings Thursday, including Morfeld's bill and one (LB343) introduced by Sen. Steve Halloran of Hastings that would authorize schools to allow employees to carry concealed handguns. A number of opponents turned out to speak against that bill.
Morfeld, who is considering prioritizing his proposal, said it would save lives by allowing guns to be removed temporarily with due process from a person at "extreme risk" of harming themselves or others.
Bliemeister said family and law enforcement are in a unique position to have detailed knowledge of a person's struggles. But law enforcement lacks legal avenues to temporarily remove a weapon if a person in crisis has firearms, unless that person commits a crime.
Families of people in crisis requested intervention by the Lincoln Police Department more than 3,600 times in 2018. Only 307 times was a person placed in emergency protective custody, the chief said.
"This procedure would only, and I want to really stress this, be used by the Lincoln Police Department and most of the law enforcement agencies in the most extreme of circumstances," Bliemeister said, "after other options have been exhausted and within the boundaries of the Constitution to stop self-inflicted or targeted violence on others with a firearm."
Morfeld's bill would allow a family member or the police to petition the court for an extreme-risk protection order to temporarily take away those guns. The law requires a hearing before a protection order can be issued. It also provides other civil protections.
On average, one Nebraskan dies by suicide by gun every three days, Morfeld said.
Kevin Griger with the Sarpy County Sheriff's Office also supported the bill, telling the committee that while there is no one reason for active shooters in schools, some have had numerous contacts with law enforcement while experiencing a mental health crisis.
Opponent Patricia Harrold of the Nebraska Firearms Association encouraged the committee to strengthen the process by which a person is deemed unsafe to themselves or others, and to better protect their civil liberties.
The bill concerned William Roche because a judge has to make a mental health decision without a tight requirement of evidence, he said. Firearms can be taken away without warning. And roommates could lose their guns, too, because they live with the person whose firearm is being taken.
Corey Reiman, a Lincoln criminal defense attorney, said he was concerned about people who are wrongfully accused. Domestic disputes, for example, are ugly and protection orders are used as weapons.
"How many people are we going to sweep up in this law that shouldn't have lost their firearm?" Reiman said.
Halloran's bill, called the School Safety Rapid Response Action Act, would allow a school district's governing body to develop a program authorizing school employees who hold a concealed carry permit to voluntarily carry handguns in school buildings, on school grounds, in a vehicle or at school events.
Halloran described the shootings a year ago at Marjory Stoneman Douglas High School in Parkland, Florida, in which 17 people died within minutes.
Red Cloud Schools Superintendent Brian Hof, a retired Army reservist, came to the hearing to support the bill. He is a Nebraska concealed carry instructor, and many teachers have taken his courses, he said.
"I believe that with the combination of the state requirements, along with concealed carry training, along with any additional requirements the school board may implement, we can make our kids even safer," Hof said.
A host of opponents lined up to speak against the bill, including the Nebraska State Education Association, the University of Nebraska-Lincoln police chief, educators, high school and college students.
Teacher Paul Schulte, representing the NSEA, said rather than allowing employees to carry concealed weapons, schools must have stronger security measures, better trained school resource officers, and deeper and more complete counseling and mental health services.
Tom Perkins, a member of a community college board from Scottsbluff, said the bill is ill-conceived because it presumes teachers are capable of killing someone.
There is a real possibility a teacher called on to defend students could end up with post traumatic stress disorder. And if an officer responds to a school shooting and comes upon two armed people, the officer may have to decide which to kill, he said.
"Will it be the teacher or will it be the bad guy?" Perkins said.
UNL police chief Owen Yardley said allowing firearms on campus would reduce clarity for police officers, campus security and campus members in identifying threatening situations.
"Many of our events that are held on our campuses are competitive or controversial in materials or subject matter," he said. "To ensure safety for all who are on our campuses we believe that firearms should not be available in situations where emotions may be elevated."
Halloran reminded the committee that his aim is not to arm all teachers.
"My intention is to give schools an option, not a mandate," he said. "I have no pretense that many schools will adopt this. I would say it's safe to say most schools won't."