2022 Legislature: Action on Fiscal Issues, Stalemate on Others

April 22, 2022, midnight ·

Nebraska Capitol (Photo by Fred Knapp, Nebraska Public Media News)
Nebraska Capitol (Photo by Fred Knapp, Nebraska Public Media News)

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Tax cuts, spending increases, and a balanced state budget were among the results of the just-completed session of the Nebraska Legislature. At the same time, lawmakers remained deadlocked on a long list of issues, including criminal justice reform, abortion, and gun rights. Here’s a look back at some major things that did – and didn’t – happen this legislative session.

When lawmakers convened in January, state tax revenues were already exceeding projections. Sen. Lou Ann Linehan, chair of the Legislature’s Revenue Committee, said that meant lawmakers were doing a good job managing the state’s finances.

Senator Lou Ann Linehan
Sen. Lou Ann Linehan (Senators' photos courtesy Nebraska Legislature)

“It’s time to send the extra money that we do not need, that we did not budget for, that is above and beyond what we anticipated to get, back to the people that earned the money,” Linehan said.

In the end, lawmakers voted to eliminate income taxes on Social Security and lower the top marginal rates on personal and corporate income over the next five years, while maintaining and allowing for the expansion of credits to offset property taxes.

Sen. John Stinner, chair of the budget-writing Appropriations Committee, said tax cuts were headline news.

Senator John Stinner
Sen. John Stinner

“But I think we also had safeguards in place that protect the fiscal status of the state of Nebraska,” Stinner said.

Stinner pointed to a $1.3 billion cash reserve, more than 25 percent of next year’s $5.1 billion budget, and the conservative assumption of no revenue growth for the next two years.

Meanwhile, lawmakers also approved significant spending increases, fueled by higher-than-expected receipts and just over $1 billion in federal American Rescue Plan Act, or ARPA funds.

Spending approved included more than $300 million to revitalize urban areas with housing, infrastructure and other improvements, primarily aimed at the predominantly African American area of North Omaha. Sen. Justin Wayne hailed the measure as historic.

Senator Justin Wayne
Sen. Justin Wayne

“This isn’t just a big step for North Omaha. This is a huge step for the state. Not only the billion-dollar impact, but what it says to generations of people who may have felt they were left out,” Wayne said.

Other major spending initiatives went for water projects. Gov. Pete Ricketts proposed spending $500 million for a canal to take water from the South Platte River in Colorado and bring it to Nebraska. The so-called Perkins County Canal was originally agreed to nearly 100 years ago in a compact between the states, but was never built.

Announcing the proposal in January, Ricketts pointed to a long list of water projects being considered in Colorado.

“Should all the long-term projects be effected, they would reduce the amount of water flows coming to Nebraska by 90 percent,” Ricketts said.

Colorado officials said that was a brainstorming list of potential projects, and called the canal proposal a “boondoggle.” With some Nebraska lawmakers also expressing skepticism, the proposal was scaled back, at least for now, to $54 million to conduct a study and acquire options for land purchases.

Senator Mike Hilgers
Sen. Mike Hilgers

The Legislature also moved ahead on other water projects, including a new marina at Lake McConaughy near Ogallala, an expanded one at Lewis and Clark Lake along the Missouri River in northern Nebraska and a new lodge at nearby Niobrara State Park. And they appropriated $20 million to study building a lake of at least 3,600 acres between Lincoln and Omaha.

Speaker of the Legislature Mike Hilgers, a leading promoter of the lake idea, said it could be transformative.

“Big picture, it’s a big idea, it’s a big vision, and if we hit it, it’s going to be a home run, in my opinion,” Hilgers said.

Lawmakers also set aside money for raises for workers in 24-hour facilities like prisons and veterans’ homes, which have been facing staff shortages, and for providers of services for people with developmental disabilities and nursing home residents. They also directed funds to the University of Nebraska for projects including a rural health center at the University of Nebraska at Kearney to train health professionals, including doctors.

Senator Curt Friesen
Senator Curt Friesen

Most of the spending was approved with overwhelming support. One of the few naysayers was Sen. Curt Friesen, who warned the Legislature was overspending just because the state was temporarily flush with cash.

“We talk like we’re a conservative bunch of senators. We’re not going to spend money. We’re going to hold down our budget. And yet you dangle money in front of us, and we grab it and we run with it. And we spend it on everything we can think of. And I’m not sure we’re solving any problems,” Friesen said.

One problem remaining unsolved is prison overcrowding. Ricketts has proposed building a new, 1,500-bed prison, now estimated to cost $270 million. But a group of legislators led by Sen. Steve Lathrop argued without sentencing reforms, including less prison time for some drug offenses and earlier parole eligibility, prisons would remain overcrowded even after new construction.

Senator Steve Lathrop
Sen. Steve Lathrop

Lathrop’s criminal justice reform proposal failed, and while lawmakers set aside another $175 million for prison construction, bringing the total to over $240 million, they did not give permission for the money to be spent. Lathrop, who decided not to run for reelection, said that shows lawmakers remain stuck on criminal justice and other issues.

“I think we have gotten to a place where the Legislature was at a stalemate…It’s hard to identify other than budget bills and a consequential tax cut, where we addressed significant problems facing the state,” Lathrop said.

Other examples of stalemate occurred on guns, where a proposal to allow carrying concealed weapons without a permit, and on abortion, where a proposal to ban the procedure if Roe v. Wade is overturned, were both blocked by filibusters.

With 24 of the 49 legislative seats up for election this fall, and 12 senators blocked from running for reelection by term limits, it could be a very different Legislature that confronts these and other issues in the future.