Nebraska, a deep red state that voted heavily Republican, is finding out that acting President Musk views them as parasitic wasteful spenders.
Oops.
One way forward – build out clean energy, take advantage of huge natural resource, help farmers diversify their income as corn prices crash, and bring much needed revenue to hard pressed rural communities.
The federal government is again planning to decrease the percentage of state Medicaid costs it will cover for Nebraska, leaving state lawmakers on the hook for an additional $90.3 million this budgeting cycle.
State Sen. Rob Clements of Elmwood, chair of the budget-writing Appropriations Committee, announced the revision Thursday, one day after legislative staff found the overlooked Federal Medical Assistance Percentage (FMAP) revisions from January.
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Clements’ committee issued a preliminary budget Feb. 18 that identified $171 million toward closing the shortfall. However, some of those items, including a $14 million cut to the University of Nebraska, will be fought in committee and, if advanced, during floor debate.
With the Medicaid changes but without the committee’s recommended cuts, the state budget shortfall for the 2025-27 fiscal years is $457 million. Including the committee’s changes, the shortfall would be about $289 million, according to the legislative fiscal office.
Clements said it will be “a tougher year than we thought” to balance the budget.
Sen. Tom Brandt, who represents a southern Nebraska district that leads the state in percentage of unpaved roads, said low corn prices contributed to the shortfall.
“When you take the 46,000 corn farmers in the state of Nebraska, and their income has all got basically cut in half, it has a direct impact on the amount of income taxes paid into the state of Nebraska,” he said. “I doubt anybody forecasted that.”
To overcome the shortfall, Brandt said he hopes to remove sales tax exemptions on pop, candy, fantasy sports and luxury services.
“When you look at pool cleaning services, I don’t even know why they’re exempt. When you charter an airplane, when you charter a limousine, when you hire a sightseeing company, these are all things that currently are exempt,” he said.
But Sen. Danielle Conrad, who has emerged as one of the Legislature’s leading voices against sales tax expansions, said both sides of the aisle could take issue with the proposal.
“It’s going to find skepticism from Republican and conservative colleagues who said, ‘Hey, I meant it when I said it, no new taxes.’ And it’s going to find concern and skepticism from myself and other progressive senators who say, ‘Hey, wait a minute. This is going in the wrong direction. Sales taxes are regressive’,” she said.
“Those massive income tax cuts that were made in recent years, you can see that they’re blowing a hole in the state budget, and you can also see that they’re primarily benefiting the wealthiest Nebraskans,” she said..
John Hansen, President Nebraska Farmer’s Union, in Nebraska Examiner:
Our 100% public power state is scrambling to find enough new electrical generation soon enough to meet the needs of our skyrocketing load growth.
Fortunately for us, Nebraska has the third-best wind resources and the 13th-best solar resources in the nation. Based on this wealth of renewable energy potential, our state can produce much of its own home-grown energy in the energy market.
If we fail to harness and harvest our own wind and solar resources, our Nebraska public power owners’ money will be sent to neighboring states to buy the power we need.
Last May, the Omaha Public Power District bought 600 megawatts of electrical capacity from rural Kansas. That should be a wake-up call to rural Nebraska.
With due respect to our neighbors, I think a majority of Nebraskans would rather put their public power dollars to work building rural Nebraska.
For Nebraska to take advantage of this tremendous energy market opportunity, our county officials must put and keep the “welcome mat” out for renewable power generation.
They must protect public health, safety and welfare, while also respecting landowners’ private property rights and putting reasonable zoning regulations in place that allow legal, economically and environmentally beneficial renewable energy facilities to operate in their counties.
“Brandt said he hopes to remove sales tax exemptions on pop, candy, fantasy sports and luxury services.”
I recognize that sales taxes are regressive, but I can definitely get behind removing those exemptions (and wondering how fantasy sports and luxury services were exempt in the first place).