LINCOLN — Gov. Pete Ricketts called for more tax relief as he signed the state budget into law Monday.
The governor issued no vetoes on the $9.7 billion, two-year state budget package, which he praised for controlling state spending and significantly increasing direct property tax relief.
“As the Legislature continues their work, there are additional opportunities to deliver significant tax relief,” he said in a statement. “I look forward to working with senators to deliver even more relief for the people of Nebraska.”
The budget leaves lawmakers with $206 million during the two-year budget period ending June 30, 2023. The total could change Thursday, when a state panel meets to update the official revenue forecasts for the period. Ricketts urged more tax relief without endorsing any specific measure. Lawmakers will be debating several possibilities this week.
In his statement, the governor highlighted several features of the package, starting with the 1.7% average annual spending growth. He said the figure is about a quarter of the annual average budget growth before he took office.
The state was able to keep spending growth lower than normal this year because of some one-time factors. Those include a higher federal match for Medicaid, a lower-than-expected school aid increase and federal coronavirus relief. The spending growth figure does not include money used for property tax credits.
He pointed out the $1.45 billion of direct property tax relief, including $613 million for a long-standing property tax credit program, more than $627 million for new income tax credits to offset a portion of school property taxes and $214 million for the homestead exemption program benefiting low-income elderly and disabled homeowners.
In addition, the governor noted that the budget funds the state school aid formula, providing more than $1 billion a year for K-12 public schools, and expands his career scholarships program to include students attending private colleges and universities. It also provides more money to provide textbooks for students in private and parochial schools.
Finally, Ricketts said the budget “kicks off the process” of building a new, modern correctional facility. The budget puts $15 million into the design, planning and site selection for a new prison, which he said is needed to replace the aging Nebraska State Penitentiary and increase the capacity of the overcrowded state prison system.
Lawmakers set aside $100 million for a potential new prison but emphasized that they were not authorizing construction this year. The budget includes $15 million to develop prison alternatives and programming, plus money to update the state’s master plan for corrections in conjunction with a new study of the state’s criminal justice system by the nonprofit Crime and Justice Institute.