LINCOLN — Gov. Pete Ricketts will be sworn in Thursday to start his second term in office. In advance, he sat down with The World-Herald to talk about the next four years and the legislative session that starts Wednesday.
In the interview, he pledged to make property taxes his top priority for the session, while controlling spending, stopping any new or increased taxes, and promoting economic development.
He talked about fitting the voter-approved Medicaid expansion into the state budget and about his plan to fix the prison system. And he answered questions about his political future.
Here are highlights of the interview, which started with Ricketts talking about his approach to governing the state.
Ricketts: My first term, the vision was to grow Nebraska. We’ve got great people here in our state and they deserve great opportunities. We want people to live the good life here in Nebraska.
The four pillars of our Grow Nebraska strategy have involved, first pillar, connecting Nebraskans to great-paying job opportunities and making sure they’ve got the skills to be able to take those jobs. The second is making sure we’re cutting the regulatory red tape and delivering government services at the speed of business.
The third pillar is making sure we’re good stewards of those taxpayer dollars. Then the fourth pillar is going out and promoting ourselves, making sure that we’re telling the world that we’ve got the best place in the world right here in Nebraska.
In the next four years we’re going to build upon that foundation, each of those pillars, and look to expand them and take them to the next level. That’s really what it’s all about at the end of the day, making sure we’re creating those opportunities for Nebraska families.
Q: So can you tell me a little bit more about what you want to expand on, do more of, do better?
Ricketts: That’ll be part of what we roll out in the State of the State through what our budget provisions are.
Q: This first question is about property taxes, especially for farmers and ranchers. Do you have a new proposal to address the level of property taxes in the state?
Ricketts: Property taxes have been the No. 1 thing people talk to me about, continue to talk to me about. In my State of the State address we will have additional proposals with regard to how we’re going to provide that additional property tax relief.
Q: You’ve talked about controlling spending, but there are limits to how much money you can free up through spending controls. You, in the past, proposed changes in how agricultural land is valued, but that has been criticized as not doing enough for the farmers and ranchers. What new can you do without a tax shift?
Ricketts: First of all, when we’re talking about taxing one group of people to pay for another group of people’s tax relief, that’s not tax relief. That’s a tax shift. That doesn’t actually do anything for taxes. What we have to do is make sure we’re controlling spending, and that is the key to that sustainable tax relief.
You talked about some of those ideas we’ve had in the past, those were good ideas. There’s not going to be one idea, there’s not going to be one thing that addresses this issue. I think that’s what you’re going to see in this upcoming session is a lot of discussion about different ideas on property tax relief.
Q: What if their property tax relief proposal includes some new source of revenue?
Ricketts: I won’t be able to support anything that is actually raising taxes like that.
Q: That would be a veto?
Ricketts: We don’t use that term around here so early, before we even know what a bill is, but in general I won’t be able to support measures that are actually looking to raise people’s taxes. And this is not new to anybody.
Q: What about other taxes? Will you be looking at income tax cuts again this year?
Ricketts: Certainly I’m willing to work with the Legislature on that. My priority for this year, though, is going to be property tax relief.
Q: Speaking of fitting in the budget, there’s Medicaid expansion. Voters approved that in November. How do you believe that should be paid for? Should it be paid for through budget cuts, either in existing Medicaid services or in other state programs?
Ricketts: It’s all got to fit within the existing budget. That means everybody else who is currently receiving state funds is going to have to make room for that. So whether it’s K-12 education, higher education, property tax relief. For everybody as a whole, there is going to be less money because we’ve got to make Medicaid expansion fit into the budget. It’s all about setting priorities in the budget.
Q: Another budget issue is the prison system. Prisons continue to be above capacity by a fairly significant amount. There continue to be problems hiring and retaining workers, despite the steps that you and (Corrections) Director (Scott) Frakes have taken so far. So what else should the state be doing to fix the corrections system?
Ricketts: The plan that Scott Frakes has laid out is the plan that we’re following. Over the last several budgets, we’ve asked for and received about $117 million in capital investments. We’ve invested more in things like pay for our correctional officers, professional development and programming. All these things have to come together to be able to address those issues. We’re demonstrating that we’re taking the steps to address the issues we have with regard to population in corrections.
Q: A legislative committee that studied the state’s economic development activities called for ending the state’s business tax incentive programs this year, including the (Nebraska) Advantage Act. Do you agree with that conclusion?
Ricketts: I’m happy to work with the Legislature on what do we do with regard to economic incentives. I think everybody agrees there’s opportunities to improve on what we’re doing. I personally would like to see a program that is more accountable, more transparent and focuses on higher-paying jobs. I think there’s opportunities to make improvements to it, but every state, even Texas, which has no income tax, has incentive programs to be able to help draw businesses.
Q: The Legislature’s Planning Committee made what they called a “singular and urgent” priority recommendation to get the cash reserve fund back up. They recommended two months’ worth of state revenues, which would be more than $800 million. Do you agree with that and, if so, how should the state go about that?
Ricketts: The reason you have a cash reserve is to be able to cushion you against revenue shortfalls or downturns, and we have seen that here in Nebraska with our ag economy. We’ve appropriately used the cash reserve to cushion us against this. I would be comfortable with a cash reserve around $500 million, but I think the most urgent priority is property tax relief.
Q: Looking at this new group of senators, most folks are saying this is probably going to be another difficult year, with a fair amount of division. How do you anticipate this session will go? How will you be able to work with these senators?
Ricketts: I hope what we see is a spirit of cooperation coming in. If you look at last year, we had a lot of success with regard to different bills, whether it was getting our Social Security tax relief bill passed, avoiding the big tax increase from the federal tax law changes, working on opioids together, (authorizing) autonomous vehicles, occupational licensing reform. Now what I’d like to see is that same level of cooperation, plus getting property tax relief done on top of it.
Q: It’s going to be four years, correct? You’re not going to run for something here?
Ricketts: I’m going to be governor for the next four years. Even if there’s an open Senate seat in two years, I am not running for that seat.
