Governor Ricketts (NE) endorses more roads funding; property tax idea questioned

NET News, 7 January 2016
Fred Knapp, Reporter/Producer

Gov. Pete Ricketts, center left, gestures as Sen. Jim Smith, center right, looks on (Photo by Fred Knapp, NET News)

Gov. Pete Ricketts Thursday endorsed using up to $150 million from the state’s cash reserve to jump-start highway construction, a proposal the chairman of the Legislature’s Appropriations Committee suggests is fiscally irresponsible.

At a Capitol news conference, Gov. Pete Ricketts laid out his support for creating a new fund to pay for road construction, called a Transportation Infrastructure Bank. “This bank will be something that we will transfer $150 million over a phased in period from the cash reserve, and then replenish that money,” Ricketts said. The money will go to the invest in the state’s highway system, help counties repair bridges, and help businesses that need road connections, he added.

Omaha Sen. Heath Mello, chairman of the Legislature’s Appropriations Committee, said he supports the idea of an infrastructure bank. But Mello questioned the timing of this proposal. “Right now it feels like it’s a fiscally irresponsible decision to try to earmark the state’s cash reserve up to seven years in the future without knowing what we’re currently going to do to solve this year’s budget problem,” Mello said.

Nebraska currently has a little over $700 million in its cash reserve. The budget problem Mello referred to includes a shortfall of $110 million. But that “shortfall” is how much the state is short of a surplus senators are required to build in when they approve a budget. So even considering the shortfall, the state was still projected last November to end next fiscal year $157 million in the black.

Sen. Jim Smith of Papillion, chairman of the Legislature’s Transportation Committee, said money from the proposed Transportation Infrastructure Bank would be used to pay for some long-deferred projects. “The primary portion of this infrastructure bank will go to satisfy the promises and commitments we made back in the 1980s on expressway systems,” Smith said.

Map of expressway system (Courtesy Nebraska Department of Roads)

In the 1980s, the state approved 600 miles worth of new expressways. About one-quarter of those have not been built.

The bill creating the infrastructure bank has not yet been introduced, but Smith has said some funds to replenish it will come from a six cents per gallon gas tax increase he got the Legislature to pass last year, over a veto by Gov. Ricketts. Asked how he reconciles support of the new construction program with his opposition to that tax increase, Ricketts said “I’m not looking to go back and re-fight battles from last year. I think those battles were resolved last year.”

Roads Director Kyle Schneweis said construction projects will be prioritized over the next six months, and he hopes expressway construction using infrastructure bank money will begin in 2019.

Meanwhile, on another fiscal issue facing the state, an expert brought in by the Open Sky Policy Institute think tank is cautioning against a  proposal to hold down property taxes by limiting increases in assessed value of properties. David Merriman, a professor of public administration at the University of Illinois-Chicago, questioned the resulting shift in tax burdens among property owners. “Is the intent to shift it from the ones that are benefitting the most from rapid appreciation to those that are benefitting less – for example, farmers that are seeing rapid appreciation onto farmers that are seeing less rapid appreciation? And why is that a good public policy goal?” he asked.

Some farmers argue that just because the assessed value of their land has gone up, that doesn’t give them any additional income unless they sell it. But Merriman said there are other ways to address that problem. “If the concern is that because the capital gain hasn’t been realized, the farmers don’t have sufficient income to pay that tax, then there are other tools that could be used that more directly address that issue such as tax deferments,” he said. Merriman explained such deferments allow the tax to be deferred until there is a transfer of property, either because the farmer has passed away or the land has sold.

Meanwhile, senators continued to introduce new bills, (for the Legislature’s home page, where you can look up bills by number or date of introduction, click here) including LB 787 by Lincoln Sen. Adam Morfeld that would allow people to take pictures of the ballots they fill out in voting booths. Morfeld said it could increase interest in elections. “People are excited about voting in elections. And by doing ballot selfies, they oftentimes post it on social media, Facefook, other things, which also alerts other people too there’s an election going on, and gets other people excited to vote in the election and think about the issues,” Morfeld said.

Existing law prohibits showing anyone your completed ballot. A federal court in New Hampshire overturned that state’s ban on “ballot selfies,” despite critics’ fears that eroding ballot secrecy could make it easier for people to sell their votes. That court decision is now being appealed.
Another bill introduced Thursday by Sen. John Kuehn of Heartwell, LB792, would prohibit state-elected officials from lobbying for two years after they leave office. Many former state senators go to work as lobbyists, and former Attorney General Jon Bruning, who left office last January, registered as a lobbyist in December.

Kuehn said his proposal is not aimed at anyone in particular, but he wants a discussion of the public policy.

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