The 2020 session of the Unicameral will long be remembered as one of the most unusual and acrimonious sessions that played out in the midst of a pandemic and a deep recession. When the session began in January, the Nebraska economy was strong and the state was on a sound financial footing. As a consequence of that rosy scenario, property tax cuts, corporate tax subsidies and a UNMC project for the development of a new national pandemic and all-hazard disaster response center were at the top of Pete Ricketts’ legislative agenda.
Subsequently, in March, the legislature shutdown due to the pandemic. When the legislature re-convened in July, the world had changed. The economy had fallen into the deepest recession since the Great Depression and we were suffering from the deadliest pandemic in over a century. Due to this sharp economic downturn, thousands of Nebraskans were thrown out of work and revenue forecasts were substantially downgraded. Nonetheless, the Ricketts’ agenda that was hatched when times were good remained unchanged. It was like the recession and pandemic never happened.
Despite the radically changed circumstances, the Unicameral passed the bill (LB 1107) that contained this agenda by a 41–4 margin on the last day of the session. According to the Journal Star, this legislation consists of the following: “Besides a new state income tax credit to defray property taxes paid to support K-12 schools, Legislative Bill 1107 updates the state’s main economic incentive program and pledges $300 million toward the proposed $2.6 billion NExT Project at the University of Nebraska Medical Center in Omaha. The new income tax credit is expected to provide a 3% reduction in overall property taxes initially, but funding for the credit is anticipated to grow from $125 million in the first year to $375 million after three to five years, dependent on growth in state tax receipts.”
This bill passed by an overwhelming bi-partisan margin, notwithstanding the fact that we simply may not be able to afford it. During the debate over LB 1107, the non-partisan Open Sky Policy Institute warned that the legislation: “ would only add to the already-sizable gap between projected appropriations and revenue shown in the current General Fund Financial Status. If LB 1107 is passed, it could grow the state’s gap in funding to nearly $840 million…Without any additional revenue to offset the program’s continually growing cost, the state will face a fiscal cliff. This will result in the Legislature having to raise revenue or cut services like health care and education, which are essential to a strong economy.”
The handful of opponents to LB 1107 echoed those concerns during floor debate over the measure. Senator Justin Wayne contended that the bill “handcuffed the state in dealing with economic struggles caused by COVID-19, which he predicted will not be known until September or October.” Senator Machaela Cavanaugh stated that the “tax break she’ll get from LB 1107 amounts to only $150 and that it was morally wrong to prioritize property tax relief over funding for schools and the needy. I would be devastated if our public education system will suffer so I can get $150 more. It’s not worth it.”
While most of the senators were focusing on a stale agenda that comforted the already comfortable, the GOP majority literally did nothing to solve the problems created by COVID-19. The efforts of Democratic senators to assist the victims of the crisis were consistently rejected by the 30–19 GOP majority. There was no eviction moratorium, no PPE for teachers or children at school, no protections for meatpacking plant workers, and no improvements made to an overburdened unemployment insurance system. It was truly a legislative session that reflected the current Gilded Age we are all living in.
This big tax and incentive package is a reckless gamble for the highest stakes. If we don’t have a quick and strong economic recovery, we will see big cuts to health care and education in upcoming legislative sessions. The problem with living in a red state is that once taxes are are cut, they will never be increased again — regardless of the circumstances. The GOP majority will never try to fix a budget crisis with a tax increase. Never.
I would recommend that you commit your time and/or money to good legislative candidates. We need a check and balance on Ricketts and his crickets in the unicameral. Elections have consequences. Let’s chase the money changers out of the State Capitol in 2020! Together, we can whip the corona virus and take our state back!