Nebraska still wants the Colorado Canal to take water from the South Platte River
By Grant Schulte, The Associated Press
LINCOLN, Neb. – Nebraska Gov. Pete Ricketts on Wednesday stepped up his push for income tax cuts, a new state prison and a $500 million canal to claim water in Colorado, arguing that the State should raise more than enough revenue to pay for it all.
The Republican governor’s remarks came just days after a state board predicted Nebraska would receive $775 million more than expected. That will leave lawmakers with nearly $500 million in cash available for new spending, as well as an expected cash reserve of $1.7 billion and $1.04 billion in federal pandemic funds.
“With these stronger forecasts, it’s even more important that we address all of these different priorities,” Ricketts said at a press conference.
Ricketts approved a measure that would lower Nebraska’s highest personal and corporate income tax rate, which would benefit many middle-class taxpayers but give a much bigger boost to lower incomes. highest in the state. Taxpayers who earn at least $1 million a year account for more than half of all reported income in Nebraska, but they pay about 10% of total state income taxes.
Ricketts noted, however, that neighboring Iowa just approved a flat tax of 3.9% that is well below Nebraska’s highest individual rate of 6.84%.
Nebraska’s proposal would drop that rate to 5.84%. Missouri’s highest rate is 5.4%, Kansas’s is 5.7%, and Colorado’s is 4.55%, while South Dakota and Wyoming do not impose taxes on income.
“We risk being a huge outlier in the region if we don’t act,” Ricketts said.
Senator Lou Ann Linehan, another Republican and chair of the Legislature’s Committee on Revenue, argued that lowering income taxes is “crucially important” to keep the state affordable for people. middle-income families.
“When we have that kind of income, we have no right to keep that money,” said Linehan, from Omaha.
Opponents, however, said the tax measure would take money away from other priorities, such as public schools and health care.
“We fear that we are currently in a fiscal bubble and could cripple ourselves financially as we rush to pass tax cuts without a clear understanding of the true economic prospects for our state,” said Rebecca Firestone, executive director of the ‘OpenSky Policy Institute, a Nebraska think tank that generally opposes such measures.
Ricketts also said he wants full funding for a new $270 million state prison to replace the 153-year-old Nebraska State Penitentiary in Lincoln.
Department of Corrections Director Scott Frakes said the current facility is very outdated and was last upgraded at a time when most people wanted to “store” prisoners, instead of their provide services to prevent them from reoffending once released.
Ricketts also identified the Colorado-Nebraska Canal project as a top priority, saying it’s the only way Nebraska can ensure it continues to receive an adequate water supply from the South Platte River. . Colorado’s rapidly growing population has put more pressure on the river, but a century-old pact between the states allows Nebraska to build a canal and claim some of the water.
Nebraska Department of Natural Resources Director Tom Riley said failure to preserve the state’s water supply would have huge economic and environmental consequences.
Nebraska’s surge in revenues was largely due to federal COVID-19 aid, as demonstrated by many other states that went from pessimistic budgets at the start of the pandemic to large surpluses.
Ricketts argued that the state’s light-hearted approach to the pandemic also played a role. Nebraska was one of seven Republican-run states that never issued a formal stay-at-home order. Nebraska also has the lowest unemployment rate ever by any state, and its agricultural and manufacturing industries are doing better than before the pandemic.