Another revenue projection, another downward revision of tax revenues.
With the Nebraska Legislature needing to close a $195 million gap this year, taxes and spending will again take center stage at the Capitol.
The outcome is ultimately up to the 49 men and women in the chamber when they reconvene in January. But for any senator to say any option is entirely off the table would be shortsighted, given the prolonged problems faced by the state, most notably in its largest industry, agriculture.
Right now, the open-mindedness being expressed by Gov. Pete Ricketts and the Legislature is encouraging. The governor said he’s “willing to discuss different ideas” floated by senators – a promise that he must keep in 2018 and that must be reciprocated by legislators.
However, this dedication by lawmakers to a common cause must continue long beyond the immediate aftermath of this latest forecast, without devolving into the acrimony that can result from the butting of heads during a stressful legislative session, as was seen in the spring.
This year’s long session was dominated by sometimes heated discussion of plans for various tax cuts. Tax reform, in particular, is long overdue for Nebraska. But the urban-rural split reared its head during debate on proposals regarding income tax vs. property tax reductions – and neither passed.
It’s also worth considering that Nebraska may have a revenue problem, rather than a spending problem. Various groups have targeted for removal a variety of incentives, credits and exemptions – both in state code and the tax structure – they argue would help the state bring in more money to fund essential government operations. Some, however, view those as an intolerable tax increase.
Large spending cuts to a variety of state agencies, including the University of Nebraska system, also drew loud criticism from several legislators. But, a government can’t cut its way to prosperity. Many expenditures need to be viewed as long-term investments – including, for example, education, child welfare and prisons – in the positive future of Nebraska.
To paraphrase Appropriations Committee Chair Sen. John Stinner: Short-term gain must come with as minimal of long-term pain as possible.
The work of the Legislature will not be easy this year, particularly for those who sit on Appropriations. Trimming $195 million from an $8.9 billion budget represents just slightly more than 2 percent of the state budget. But years of restraining spending and cuts some agencies felt hit the bone mean that further reductions or the elimination of some incentives will no doubt be met with resistance.
Despite this, for the good of all Nebraskans, these early indications of accord must carry over into the difficult work of balancing the budget in 2018.