By Governor Pete Ricketts
December 14, 2021
Governor’s official photo here.
Families and businesses with healthy finances follow a budget. Families have to monitor their spending to meet day-to-day needs and be prepared for future expenses. Businesses have to keep costs lower than revenues to meet payroll and make a profit.
State government is no different. We have to set a budget and stick to it to be successful. As public servants, we have a special obligation to be responsible with taxpayer dollars.
Before I took office, State spending was growing at 6.5% a year—an unsustainable pace. During my time as Governor, the State has passed four budgets. We've successfully limited the average annual rate of growth to 2.5%. At the same time, we’ve improved the delivery of government services to our customers—the people of Nebraska. We’ve also achieved strong economic growth in Nebraska. This has increased State revenues, which continue to surpass expectations.
This combination of budget discipline and growth has made it possible for the State to deliver historic amounts of tax relief. Nebraskans will see over $2.0 billion of total tax relief over the next two years, including $1.9 billion in direct property tax relief. This is the equivalent of 20% of our General Fund budget going to tax relief.
As my team prepares for the 2022 legislative session, I have three priorities to control spending and maintain our state’s financial health. First, Senators must slow growth of local government taxes to protect the property tax relief we’ve delivered. Second, the State must use federal stimulus funds to support one-time projects rather than creating new programs that will require ongoing funding. Third, Senators must stick to the two-year budget passed last year and avoid adding new spending.
This session, Senators need to take action to limit the growth rate of local government tax increases. Otherwise, the tax relief provided by the State will simply result in new spending by local political subdivisions such as primary and secondary schools.
It’s like putting water in a leaky bucket. Until you patch the hole, you’ll continually have to pour more and more water into it. We’ve seen this when the State has added more state aid to education. It has only provided temporary tax relief.
In the 2021 legislative session, I supported LB 408 to limit the annual growth of local government property taxes to 3%. This reasonable limit would have prevented property tax bills from increasing faster than families can afford. We nearly advanced the bill, falling just 4 votes short of moving it forward. In 2022, I’ll work with Senators on new plans to slow property tax growth to ensure our property tax relief benefits hardworking Nebraska families.
As we look to restrain local tax increases, we must also guard against the expansion of state government. During next year’s 60-day session, the Legislature will decide how to spend funds received by the State as part of the American Rescue Plan Act (ARPA) of 2021. Senators need to make sure these one-time ARPA dollars are devoted to one-time projects. Otherwise, the ARPA money could end up growing the size of government and putting the burden on future generations of Nebraskans to pay for it.
Finally, Senators need to be prepared to say “no” to special interest groups looking to take advantage of the State’s strong financial position. We worked hard to rein in spending when setting the current two-year budget. Now isn’t the time to take on more spending with costly budget adjustments.
Nebraska has a rock-solid tradition of financial responsibility. Moody’s Investors Services ranks us as the least indebted state government in the country. Since 2011, the State has achieved a AAA credit rating from S&P Global—the highest rating possible. In September, Truth in Accounting ranked Nebraska #7 nationally in its 2021 Financial State of the States. “Unlike most states, Nebraska had more than enough resources available...to pay all of its bills, including public employees’ retirement benefits,” said the report. “This means Nebraska’s elected officials truly balanced their budgets.”
Every legislative session, Senators have a duty to be good stewards of taxpayer dollars. As they convene next month, let’s all heed the reminder carved on the side of our State Capitol: “The Salvation of the State is Watchfulness in the Citizen.” I encourage you to be vigilant about how Senators plan to spend the people’s money. You can find your State Senator’s contact information at www.NebraskaLegislature.gov. You can also reach out to my office with any questions at email@example.com or 402-471-2244.