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NE Budget Debate Begins: Storm Clouds Brewing?

Budget clouds on the horizon? Nebraska's long-term fiscal health could be at stake as state budget talks begin. (Carl Wycoff/Flickr)
Budget clouds on the horizon? Nebraska's long-term fiscal health could be at stake as state budget talks begin. (Carl Wycoff/Flickr)
April 24, 2017

LINCOLN, Neb. -- Nebraska's Unicameral begins the first round of budget debates Monday, with the arduous task of addressing an estimated $900 million revenue shortfall.

As a past member of the Appropriations Committee, former Sen. Danielle Conrad understands the gravity of the situation. But she said she isn't seeing a commonsense, common-ground approach to the budget.

"I'm heartbroken to see that the Appropriations Committee is so fractured headed into this debate, and has been split on so many of those key votes,” Conrad said. "That shows me that storm clouds are brewing."

Debate began Friday on L-B 461, a tax reform measure that includes cutting top income tax rates.

John Harms, who also served on the Appropriations Committee, said it would hurt vital state services and only benefit the wealthy.

"Sometimes, you get in so deep that you can't cut your way out of that,” Harms said. "The middle class sometimes gets hurt on this thing. We need to protect that middle class because they pay a fairly healthy, large portion of the bill."

The tax rate cuts would be tiered and based on state tax revenue projections, which supporters say would boost the economy. But opponents counter that faced with lower revenue projections, the Legislature's hands would be tied.

Conrad explained that the state's overall, long-term fiscal health is at stake in these budget talks.

"It's a time for all Nebraskans to start a conversation with their elected officials about how these decisions will really impact so many things that we care deeply about in Nebraska,” she said; "like roads and education, and natural resources and economic development."

Harms noted that past budget shortfalls have never been solved by cutting taxes. He contends there hasn't been enough talk about removing tax exemptions or incentives that could bring in revenue.

"It is a tragedy that we're unwilling to actually address that issue, and I don't think it's fair to the taxpayers,” Harms said. "It takes courage to make the right decision and look down into the future; what does it do five years, 10 years, 20 years out? You get your eyes opened up real quick when you start doing that."

State tax revenue estimates are due Wednesday, and the Government Accountability Office predicts states could see 40 years of reduced revenues. The budget must be enacted by May 10.

Mary Kuhlman, Public News Service - NE