Omaha World-Herald. May 17, 2015.
Nebraska avoids warning sign with cash reserve
When Nebraska legislators gathered in Lincoln in January, they faced one big job that had to be finished: Writing the state budget.
The Legislature last week completed that work, sending Gov. Pete Ricketts a plan that balances spending with revenues.
Lawmakers have even gone a step further, building up a healthy savings account. Thanks to responsible budgeting over the past several years, the state should have a cash reserve of about $718 million on June 30, 2016. That "rainy day" fund will provide an important cushion when the economy eventually turns from boom to bust.
Still, not everyone will be satisfied when lawmakers adjourn.
Each legislative session, requests for more spending include everything from school aid to prisons to social services. Good, often emotional arguments are offered for the additional dollars being sought. Making the difficult decisions on which programs get more and which don't is an area where the 49 state senators — and particularly those on the budget-writing Appropriations Committee — earn their pay.
But the importance of balancing needs and wants with available revenue can't be overstated. That is reflected in a new report that finds nearly half the 50 states struggling to get the job done.
Even with the U.S. economy at its healthiest since the Great Recession, an Associated Press analysis of statehouse finances nationwide finds at least 22 states dealing with projected budget shortfalls. The number of states facing budget gaps prompted Standard & Poor's Ratings Service to call the trend a sort of "early warning."
"After all, if a state is grappling with a budget deficit now, with the economic expansion approaching its sixth anniversary, what will be its condition when the next slowdown strikes?" credit analyst Gabriel Petek wrote.
The causes for these budget gaps are many. In some states, revenue growth has been stagnant, making it difficult to keep up with growing populations and higher costs for health care and education. Other states have been hurt by a steep decline in oil prices, or they saw efforts to promote growth with tax cuts fail to work as anticipated.
Alabama faces a $290 million shortfall. Some projected cuts would create a $27 million hole in the state's court system, forcing more than 600 layoffs and leaving courts without staff to send jury notices, monitor juvenile delinquents, process protection orders and collect and distribute child support payments.
While the Census Bureau recently reported that total state government tax collections in fiscal year 2014 rose 2.2 percent, a fourth straight year of increases, 17 states saw declines in their tax revenues. Alaska had the biggest drop, $1.7 billion. The state, which leans heavily on oil revenue, projected a $3.2 billion budget shortfall.
In Illinois, lawmakers are trying to figure out how to close a $6 billion shortfall, largest in the nation, while also struggling to remedy $105 billion — with a "b'' — in public pension debt.
In Kansas, Gov. Sam Brownback and lawmakers faced deficits after aggressive tax cutting. That led them to reduce school funding this spring, the AP reports.
In Nebraska, meanwhile, the Legislature gave final approval to an $8.7 billion, two-year state budget designed to fund essential needs and provide additional money for the state's Property Tax Credit Fund, education and corrections.
The budget kept the state's overall spending increase to the 3.1 percent mark laid down by Gov. Ricketts.
This combination of diligent work and prudence is testament to the state's longstanding pay-as-you-go philosophy.
Not all Nebraskans will be satisfied with every decision state senators have made. But looking at the 22 states struggling to climb out of budget holes, Nebraskans can take satisfaction that the state lives within its means.
Lincoln Journal Star. May 17, 2015.
Give job creators a break
Some people (check the Associated Press story in Monday's Journal Star) identify a legislative attempt to protect gays and lesbians against discrimination in employment and housing as a "liberal" issue.
If LB586, sponsored by Sen. Adam Morfeld of Lincoln, is a liberal bill, then liberals must have taken over the business community in Lincoln and Omaha. (Sarcasm alert.)
The chambers gave vocal support to the anti-discrimination bill at a public hearing before the bill was voted out of committee.
"Talented employees want to work in an environment that is open, welcoming and nondiscriminatory," testified Clark Lauritzen, chairman of the Omaha Chamber and executive vice president of First National Bank.
"At the Chamber, we work every day to get more of these talented employees to move to or stay in Nebraska, yet we hear direct feedback from talented people who do not want to work in Nebraska because the state does not offer protection from discrimination based on sexual orientation."
Not only did the chambers go on record in favor of the bill, they followed up in meetings with individual senators. As Morfeld said, the support of two of the state's biggest business groups is a game-changer.
The chambers' thinking has evolved rapidly. Only a few years ago most business groups opposed previous attempts. Then the position moved to neutral, and now the chambers are actively pushing the bill.
The position switch is rooted in pragmatism. Businesses need the law in order to remain economically competitive. Nebraska's unemployment rate of 2.6 percent is the lowest in the nation. The state needs every edge it can get.
To be sure, some business owners in the state still oppose the law. But young workers, particularly those in highly competitive fields like software development, rightly see issue as one of fundamental fairness. Gay and lesbian workers have always been in the workforce, of course. Now gay and lesbian individuals are more open about their orientation. Young workers have grown up in a more honest world.
Morfeld pulled the bill from the agenda last week to see if concerns can be allayed that it does not provide an adequate exemption for religious organizations. The bill should have such an exemption, but it should be recognized that opponents exaggerate the need. For example, officials at Skutt Catholic high school in Omaha faced no legal repercussions when they declined to renew the teaching contract for a gay speech teacher. Omaha's ordinance protecting gay workers has a religious exemption.
Supporters of Morfeld's bill say "it's the right thing to do," just as they said of earlier attempts. And it is. In Nebraska, workers can be denied jobs or fired simply because they are gay or lesbian. That's not fair.
Now it's clear that providing legal protection against discrimination is also the practical thing to do. The bill will be back on the agenda next year. Lawmakers have a chance to eliminate an obstacle to the success of Nebraska's job creators. Get this law on the books.
Scottsbluff Star-Herald. May 16, 2015.
Water: Why can't NRDs make decisions that affect the quality of our most valuable resource?
How much is pure water worth?
That's impossible to say, but to the federal government it's still worth at least $6.5 million. That's how much the U.S. Department of Agriculture plans to invest in the Ogallala Aquifer region this year to help farmers and ranchers conserve billions of gallons of water and improve its quality.
None of that money will be spent in the Panhandle, but Nebraska will be getting funding for projects in the central part of the state. Regardless, the investment signals the importance of clean water to the nation's food supply and its economic future. Although some recently have argued that the aquifer out here isn't part of it, the High Plains aquifer, also called the Ogallala Aquifer, covers 84 percent of Nebraska. It was created more than a million years ago through geologic action and covers about 174,000 square miles from South Dakota to Texas. It underlies eight states and averages 600 feet in saturated thickness, but is as thick as 1,000 feet in some areas.
The Ogallala supports nearly one-fifth of the nation's wheat, corn, cotton and cattle. In many areas it's being depleted at an unsustainable rate. USDA's Natural Resources Conservation Service has already spent more than $66 million on efforts to improve the quality and availability of the water, and farmers and ranchers have invested many millions in matching funds. The money will be used on weather stations and instruments to measure soil moisture and nutrients, and on advanced irrigation systems. Some of it will convert irrigated cropland to dryland farming in areas where that makes sense, and to restore grasslands. The efforts are expected to save billions of gallons of water. While not specifically saying so, they're an obvious response to prolonged drought and concerns about global warming.
Properly managed, the aquifer can serve as a bank for water in good years and a life-sustaining reserve in bad years. At times, Nebraska has behaved as if the water will last forever. Sustainability — using it no faster than nature can replenish it — has been a big concern, as well as an unwillingness to admit the obvious connection between pumping out groundwater and the rivers and streams above. According to a study by the Robert B. Daugherty Water for Food Institute at the University of Nebraska, groundwater levels declined in parts of western Nebraska from 1981 to 2013, in some areas as much as 60 feet in just 50 years.
But the story here, particularly in the Panhandle, has been more positive than elsewhere. Except for a rapidly depleting pocket in the Alliance area, water levels have held up. Much of the credit for that goes to Nebraska's unique Natural Resources Districts. The law that created the state's 23 NRDs more than four decades ago gave them authority over the management of a wide range of natural resources, including groundwater. Some opponents feared they'd strip control of water from farmers, while others feared that locally elected NRD boards would be controlled by farmers and act solely for the benefit of agriculture.
The truth lies in between. While well drilling continued at a rapid pace, in our area the NRDs have also been responsible for controlling the spread of irrigation wells, metering and regulating the use of water and even taking some land out of production in areas deemed to be over-exploited. Today, there is more irrigated agriculture in Nebraska than in any other state.
"As is well known, the southern portions of the aquifer have seen significant drops in the water table since intensive irrigation began over 70 years ago," the Water for Food Institute study said. "Less well known is the fact that, on average, during this period Nebraska has lost less than 0.5 percent of its historic water levels, even in the face of significant increases in total area irrigated. And although groundwater has declined in some parts of the state, Nebraska has been able to slow or even reverse these declines."
While some producers resent any level of regulation, the NRDs have succeeded in winning public support, even for measures designed to protect the environment, such as reductions in use of fertilizers and other chemicals. And as we've seen with the recent fight over a fracking wastewater disposal well, they've helped to persuade conservative Nebraskans that groundwater is a valuable asset worthy of protection. Local control requires board members to develop leadership skills and understand the importance of listening and responding to local concerns. Yet they also understand that what happens in one or more of the NRDs, whose boundaries are set by watersheds, can affect another.
The partisan oil-patch mantra of "drill, baby, drill!" is exposing our water and soil to depredation by outsiders, who are more interested in cheaply disposing of waste products far from their own lands than in keeping Nebraska liveable. If the state lawmakers listen to concerned Nebraskans, they'll soon understand that the wastewater issue should be under the control of elected officials experienced in responsible stewardship of our most valuable natural resource. They already exist, through our NRDs.
Kearney Hub. May 16, 2015.
Gas tax hike could make tax cuts easier
We're told that few governors have worked harder to cement relationships with lawmakers, but Pete Ricketts may have taken a step backwards this week after state senators voted 30-16 on Thursday to override his veto on the gas tax hike.
Ricketts' response to the vote felt more like a threat than an acknowledgment of the legislative will. Instead of a graceful attitude, Ricketts resorted to reminding lawmakers that he wants tax breaks, not hikes.
"When I travel the state, Nebraskans tell me that they need tax relief, not tax increases. Our state already has the 13th highest property taxes, the 15th highest income taxes, and this tax hike makes our gas tax rate the 16th highest in the nation. This tax increase will not only hurt Nebraska's hardworking families, but it will only make it more difficult to grow Nebraska because of our state's burdensome tax climate."
By voting to gradually increase the gas tax a total of six cents over the next four years, lawmakers actually might have set the stage to more easily achieve tax cuts and real reform. The gas tax increase isn't a perfect solution, but it will help address the backlog of $10.2 billion in repairs and improvements our roads and bridges need.
Because motorists pay the gasoline tax, it can be classified as a user tax. It allows users of our roads, streets and bridges to pay for their upkeep and improvement. Partitioning funding for roads and bridges in the gas tax will allow lawmakers to focus their energies more fully on dissecting Nebraska's property tax problems and achieving solutions. The property tax issue is as complex as it can be, given the many factors that are in play: Ag land valuations, school funding, spending reductions, and on and on.
By settling the roads funding issue, the focus now can turn to the tougher problems of cutting property taxes and reducing spending.
Rather than blustering about tax relief, Ricketts could have acknowledged the Legislature's decision and promised to work with lawmakers to find creative solutions to the roads maintenance and funding issues.
The governor has suggested that his new roads director will bring new ideas to the table. That's something to look forward to. For their part, lawmakers should keep an open mind about addressing the gas tax again in the future. The trend of more fuel-efficient vehicles has exposed shortcomings in the gas tax, but until there's a better answer, Nebraskans will be digging a bit deeper each time they fill up.