Ricketts makes budget vetoes; workforce housing measure advances


May 16th, 2017

Gov. Pete Ricketts discusses his budget vetoes (Photo by Fred Knapp, NET News)

Gov. Pete Ricketts announced Monday he has vetoed $56.5 million worth of spending approved by the Legislature, which must now decide whether it wants to try and override those vetoes. And lawmakers advanced a bill supporters say will help address a housing shortage that’s hurting economic development.

Gov. Ricketts had previously vetoed an $11 million installment toward replacing the Capitol’s heating, ventilation and air conditioning system. Monday, he announced another $45.5 million in vetoes from the budget for the next two years. The biggest cut – nearly $34 million — came in rates paid to providers of services in behavioral health, child welfare, developmental disabilities, and Medicaid, such as nursing homes. The Legislature had approved keeping those rates the same; the governor’s reductions would cut them an average of three percent. Ricketts also cut the operations budget of a long list of state agencies by half a percent, saving nearly another $12 million.

In a news conference, Ricketts described the cuts as necessary in light of declining state tax revenues.

“When Nebraska families see their income go down, they tighten their belts. And they’re expecting us to do the same thing. Now, the budget that was handed to me was balanced with budget gimmicks and a gas tax increase. And so I’m going to be returning that budget with thoughtful and measured vetoes to be able to correct that,” Ricketts said.

By “budget gimmicks,” Ricketts said he was referring to the Legislature’s decision to lower the reserve it requires be built into the budget, from 3 percent to 2.5 percent. His vetoes would restore that cushion to 3 percent. He said his veto of $7.5 million a year the Legislature wanted to take from roads funding for other purposes would avoid a gas tax increase, which he said would amount to two-tenths of a cent per gallon.

Sen. John Stinner of Gering, chairman of the Legislature’s Appropriations Committee, disputed that the gas tax would increase. But overall, Stinner was noncommittal in response to the governor’s vetoes.

“I’m by and large supportive of the governor. We may have a disagreement one way or the other on little, tiny items. But we’ll see what happens,” Stinner said.

Nebraska Appleseed Executive Director Rebecca Gould objected to Ricketts vetoes of Medicaid funding, issuing a statement saying “We urge the Legislature to override these vetoes and stop placing low-income Nebraskans and children in jeopardy with dangerous cuts to life-saving services.”

Stinner said the Appropriations Committee will meet Tuesday morning to discuss which of Ricketts’ vetoes to recommend overriding. He said the full Legislature will then vote on those recommendations Wednesday morning. Under the budget passed by the Legislature, state spending would increase by an average of 1.1 percent annually for the next two years. Rickett’s Budget Director Gerry Oligmueller said the governor’s vetoes would reduce the annual increase to about 0.6 percent.

Also Monday, lawmakers gave first round approval to a proposal that would extend property tax breaks to housing approved by cities to attract workers in expanding industries. Tax increment financing, or TIF, currently allows developers to use money they would otherwise have to pay for increased property values to instead offset costs like site acquisition, demolition, and infrastructure. The bill by Sen. John Stinner of Gering would also allow the money to be used for construction itself. Stinner said that would help economic development by making housing available for workers in areas where they can’t find it now.

However, Sen. Mike Groene of North Platte said workers aren’t the ones asking for this.

“No laborer has called me. No worker has asked me for this bill. I’ve gotten emails from real estate interests. It’s a tool to maximize profits. And that’s fine,” Groene said. “Business is a shark and it should be. But we have a duty to use property taxes for its purpose. And that’s support public infrastructure, support public schools, support public safety.  Not for a minority of interests who want to maximize their profits.

Sen. Matt Williams of Gothenburg supported the bill.

“It’s clear to those of us who work in economic development that there is a need for workforce housing in our rural areas. It is the largest obstacle to creating economic activity — to fill jobs that exist today that are going unfilled,” Williams said.

Lawmakers voted 33-9 to stop a filibuster against the bill before giving it first round approval.

And with little debate, senators also voted approval for two nonbinding resolutions on hot topics nationally.

One urges the federal government not to act against so-called DACA recipients – that’s the Deferred Action for Childhood Arrivals program created under former President Barack Obama, giving protection to young adults brought to this country illegally as children.

President Donald Trump campaigned promising to end the program, but while some individual recipients of DACA status have been deported, he has not ended the program. Senators voted 24-1 in favor of the pro-DACA resolution by Omaha Sen. Tony Vargas, with 17 senators not voting and 7 excused.

Senators also supported a resolution by Lincoln Sen. Kate Bolz in favor of protecting refugees regardless of race, ethnicity, religion, age, or sex. Trump’s executive order calling for a temporary halt in refugee admissions and a reduction in the overall number is working its way through court challenges. Bolz’ resolution passed on a vote of 21-7, with 14 senators not voting and seven excused.

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