Key bills create significant shortfall in next biennium

Key bills create significant shortfall in next biennium

This week, lawmakers will debate three proposals to related to property taxes. The measures are:

• LB 958, which would increase the property tax credit for agricultural land owners and cost $60 million over the next biennium;
• LB 959, which would alter parts of the state school funding formula and cost $17 million over the next biennium; and
• LB 1067, which would eliminate the common levy of the Douglas and Sarpy County Learning Community and cost $31.6 million over the next biennium.

If all three bills pass, the fiscal impact would be more than $100 million to the state budget over the next biennium. Furthermore, if these and other bills that have passed the first round of legislative approval and appear set to become law, are adopted, Nebraska could find itself faced with a $240 million budget shortfall in the next biennium (FY18 & FY19).

Without a way to pay for the new measures, projected spending for key services like schools, roads, public safety or health programs for senior citizens and individuals with disabilities will need to be cut to fund the new proposals. While some aspects of these proposals may have merit, their cumulative fiscal impact will leave the next Legislature with difficult budget choices about how to close a $240 million budget hole. Furthermore, none of these proposals take effect until next biennium. This approach to passing tax measures and finding a way to fund them later is a policy approach that has caused problems in other states like Kansas and Oklahoma.

LB 959 and LB 1067 will be debated Wednesday starting at 11 a.m. LB 958 will be debated on Thursday. Debate can be viewed on NET 2 and NET Nebraska will stream the debate live. OpenSky will provide updates on our Twitter page.