'I want Nebraska to win': Gov. Jim Pillen shares goals in first State of the State address
Gov. Pillen's first budget calls for record tax cuts, K-12 funding and 1.3% spending
Gov. Pillen's first budget calls for record tax cuts, K-12 funding and 1.3% spending
Gov. Pillen's first budget calls for record tax cuts, K-12 funding and 1.3% spending
Nebraska's economic state has never been stronger.
That was the message from Gov. Jim Pillen in his first State of the State Address.
"We have more money in our coffers than anyone can believe, or quite frankly comprehend. There's bushel baskets of it," Pillen said.
A projected $2.3 billion in surplus revenues.
Pillen believes that money should go to provide for billions of dollars of tax relief, pump up state support to K-12 education. And then hold the line on spending over then two years to 1.3 percent growth.
"We must have the courage to say no. No to overspending and maintain a focus of investing in our kids and giving this money back to Nebraskans," Pillen said.
On education — Pillen is calling for the creation of the Education Future Fund initially using a billion dollars of surplus funds and then committing $250.000 million each following year.
That would provide $1,500 per student in all schools.
Increase funding for special education programs to 80% combined state and federal aid.
Grants for recruiting and retaining teachers.
He also called for a 3% cap on school spending that could be overridden by 75% vote of local school board members or a 60% vote of residents.
Pillen is also calling for $39.4 million for scholarships for Nebraska students who attend Nebraska institutes of higher education.
And offer $25 million in tax credits for donations for student scholarships to private schools.
"This helps us to compete for our kids and keep them here," Pillen said.
On taxes, Pillen's plan would lower the top income rate for individuals and businesses to 3.99% by 2027; eliminate taxing Social Security benefits immediately instead of in four years; add $390 million more into the property relief fund; and shift valuing AG land from market-based to income-based for tax purposes and then place a 3% cap on annual increases.
"Our tax policy chases our kids out, chases our grandparents out of his state. We can't grow Nebraska that way," Pillen said.
"We, Nebraska's leaders, must compete for Nebraska to win. The cuts I am proposing today make us more competitive," Pillen said.
Pillen's budget provides for:
$99.4 million for state employee pay raises.
$5 million annually for grants to retain teachers and health professionals.
$96 million to replace the aging State Penitentiary.
$574 hundred million toward building the Perkins Canal in on the South Platte River in Colorado.
$100 million in road construction in order to obtain an additional $400 million in federal funding.
The University of Nebraska would get a 2% increase.
"We have asked agencies to tighten their belts and focus on what is needed, not what is nice," Pillen said.
Pillen would leave $1.6 billion in the state's rainy day fund.
"This is a very historic budget but it is very conservative. And there's not a shadow of a doubt we can do this," Pillen said.
State Sen. Robert Clements, the chairman of the Legislature's Appropriations Committee agreed.
"The recommendations in the tax relief he has is sustainable," Clements said.
"When we have revenues exceeding our budget needs those are taxpayer dollars that we should return," Clement said.
But state Sen. Danielle Conrad had more concerns.
"I think there's a lot to like in the governor's bold ideas in regards to increased investments in education," Conrad said. "However, aspects of the governor's tax package are very deeply concerning. I'm concerned that they're directed as huge tax giveaways to millionaires and billionaires."
Health care providers said the governor's budget "ignores the crisis" happening with the state.
The Nebraska health care and human service providers joined forces and issued the following statement saying, "It ignores the financial realities of the increasing costs to provide care and ignores the lasting impact that the closure of essential services, due to financial burdens, will have on rural Nebraskans.
"This budget jeopardizes the care that rural Nebraskans — especially our elderly Nebraskans and vulnerable families have access to."
Nebraska Hospital Association President Jeremy Nordquist said currently Medicaid only covers 40% of the actual cost of care. They had requested a 9.6% increase in Medicaid provider rates next year and 7% the next year. The governor's budget included no increase.
"Right now in Nebraska 55% of hospitals are operating in the red, running a negative margin. We can't sustain that for two years with no increases. We will lose services and maybe hospitals across the state," Nordquist said.
Pllen said health care costs are 'upside down' since the pandemic.
"Everyone in health care has to start studying that problem to come up with a solution. I'm not an advocate that more money will solve our health care problems," Pillen said.
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