It’s almost over, but it’s far from over. The 2017 Legislature is groaning toward a June 2 finish, but the situations created in the final days will probably have an impact on the 2018 session and definitely on the 2018 election. The tax plan favored by Gov. Pete Ricketts is dead for now. For the first time in a long time, passage of the two-year-budget has been an uphill battle.
The tax plan doomed itself with the inclusion of income tax cuts in a bill that was supposed to provide property tax relief. For three years, Ricketts has been beating the drum for property tax relief. He has said that he has heard from people all across Nebraska who want property tax relief. In fact, his constant use of that line has almost become annoying.
All of a sudden, with state Sens. Lydia Brasch of Bancroft and Jim Smith of Papillion carrying the water on his omnibus bill, LB461, the focus became income tax cuts. Brasch, elected by the Gang of 27 to lead the Agriculture Committee, proposed a change in farmland valuation that became part of the measure. Promoted by the Gang to lead the Revenue Committee, Smith also brought income tax cuts triggered by revenue growth to the table.
Ricketts started talking about income tax cuts growing the economy. That’s what they said in Kansas — it didn’t work. They tried the triggers in Oklahoma — they didn’t work. Rural interests and their senators looked at the numbers and asked for more property tax relief. But Ricketts clung to the income tax cuts, egged on by the Americans For Prosperity.
The train ran off the tracks when lawmakers rejected a cloture motion that would have freed LB461 from a filibuster. There were 22 senators who either voted against the cloture motion or did not vote. Ricketts denounced the 22 senators and said they had voted “against taxpayers.” The state Tea Party director vowed retribution.
Lawmakers are well aware of Gov. Deep Pockets’ penchant for using his own money to support candidates running against senators who disagree with him.
Sen. Burke Harr of Omaha, one of 15 Democrats in the officially nonpartisan Legislature, said he led the filibuster because the proposal was tilted too heavily toward income tax cuts, while most Nebraskans want property tax relief. He said it is irresponsible to be cutting taxes at the same time that the state is dealing with a budget shortfall. He countered Ricketts’ scolding by saying, “We’re not saying ‘no’ to taxpayers, we’re saying ‘no’ to a bad bill.”
Ricketts pushed hard for the bill with telephone town halls, mailers and statewide appearances. The bill included Ricketts’ proposals for cutting the top individual income tax rate and changing how agricultural land is valued as well as cuts in the top corporate income tax rate and increased tax credits for most taxpayers.
So, where to from here? There’s always next session, but the same senators and lobbyists and issues and faltering economy will be in place. While Ricketts and the Tea Party make their list of incumbents to defeat, supporters of property tax reduction may take the matter to the people. A ballot question could come either in the form of an initiative that writes a new law or a constitutional amendment that makes a more permanent change.
And then there’s the legislative races. Brasch, Smith and Harr are among six senators who will be term-limited out. Another 18 will be facing election for their second and final term. Ricketts and the Americans for Prosperity Nebraska branch will have their lists. The Republican Party will likely be pushing for the election of more Republicans to further tip the scale, which now counts 32 Republicans, 15 Democrats, one Independent and one Libertarian.
As the 2016 elections proved, there is no magic in simply being a Republican. Several fell out of favor with Ricketts who pumped money into the campaigns of other Republicans to replace them.
J.L. Schmidt, a registered Independent, is the Nebraska Press Association’s statehouse correspondent.