LINCOLN- On Thursday Governor Pete Ricketts presented his annual State of the State address. Historically this has become the date during bill introduction that the Governor announces his annual legislative priorities. This year was no different, with Governor Ricketts a number of steps he will be perusing during the 2021 session including tax relief, a new prison, and broadband deployment, among others. Here are 6 key takeaways from the Gov. Ricketts State of the State Address:
Property tax relief. In the governor's State of the State Address, he laid out a two-pronged approach to tackle property tax relief, which he deems as the top priority for Nebraskans. He is planning to approve $1.36 billion in credits for tax relief.
In the proposed budget, $275 million a year will be provided in the state property tax credit program and $107 million will go to homestead tax exemptions. $88 million will be transferred into the state's cash reserve fund which would then have over $500 million in funds. This would trigger the additional property tax credits according to LB1107, a bill passed last year that created a new income tax credit. LB1107 is expected to allow for a 17% growth in tax breaks over five years.
Property tax cap. Ricketts is seeking a legislative approval of a ballot issue to restrict local government tax increases to 3% a year without authorization from voters.
Broader broadband. The governor wants to see $20 million a year going to expanding broadband's reach. The two-year increase would be enough to get an additional 30,000 homes connected as it is estimated that 80,000 homes lack access.
New prison. Governor Ricketts is proposing taking $230 million from the cash reserve to build a new state prison. This would replace the Nebraska State Penitentiary and would aid in curing the state's overcrowding issue.
Veterans and military. The budget has $50 million ready to help lure the U.S. Space Command headquarters to Offutt Air Force Base even after the federal decision to put the site in Alabama. He also hopes to see the state exempt all military retirement benefits from income taxes, up from 50%.
Spending growth. The governor's plan calls for a 1.5% growth in state general fund spending over two years. The state benefited from one-time factors, such as higher federal matches for Medicaid and a low school aid increase with federal coronavirus relief as well. The calculation does not include money used on property tax credits.