Nebraska Gov. Pete Ricketts is urging lawmakers to pass a package to slow the statewide growth in property taxes and to reject any proposals that expand Medicaid under the federal health care law



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LINCOLN, Nebraska — Nebraska Gov. Pete Ricketts urged lawmakers Thursday to pass a package of bills meant to slow the statewide growth in property taxes and to reject any proposals that expand Medicaid under the federal health care law.

"We need to grow Nebraska's economy, create more and better paying jobs, keep our kids and grandkids here, and attract people from all over the country to come and make Nebraska their home," Ricketts said, outlining his agenda during his second annual State of the State address.

His comments came in the midst of a short 60-day session with a looming budget shortfall that lawmakers will have to address.

The governor encouraged lawmakers to focus on property tax reforms and to pass a proposal that would provide up-front money from the state's cash reserve to accelerate work on long-delayed road and bridge projects.

He also highlighted the Department of Correctional Service's $26 million plan to add bed space at a community corrections facility in Lincoln, which is designed to give more inmates access to job training, work release and counseling programs.

"Our goal is helping offenders avoid becoming repeat customers and ultimately reduce recidivism," Ricketts said.

Ricketts repeated his opposition to any effort to expand Medicaid coverage through the Affordable Care Act, calling it "one of the biggest long-term risks we face to the budget." Lawmakers have rejected such expansion three times in as many years.

"This government entitlement crowds out investments in tax relief, education roads — things we need to grow our state," Ricketts said.

Sen. John McCollister of Omaha, a leading sponsor of this year's upcoming Medicaid bill, said his proposal addresses many of the arguments leveled by opponents. Other supporters of the new bill have argued it will differ substantially from past proposals, with safeguards in case federal funding drops below what was promised.

"The fiscal impact of the bill we propose will be very modest," McCollister said.

Ricketts also released his recommendations to balance the current two-year state budget, which faces an expected shortfall of $110 million, though the gap is likely closer to $140 million because of updated estimates in school funding requirements. Nebraska also must repay the federal government because they mistakenly paid for services for developmentally disabled people at rates that hadn't yet been approved.

Ricketts, in response to some lawmakers, said it's unnecessary to tap the state's cash reserves to balance the budget. Instead, he suggests using a combination of unspent money from state agencies, transfers from cash accounts and a reduction in new spending. But it would also withdraw $150 million from the reserve over seven years to pay for road funding — a plan that's likely to face resistance from some lawmakers.

Ricketts likened the Legislature to his family, saying he may disagree with senators on some issues but still enjoys working with them. "Sometimes there was a natural tension," Ricketts said. "But it's an honor to be a part of our work here in our state Capitol."

Sen. Heath Mello of Omaha, chairman of the Appropriations Committee, said the governor's budget represents "a solid start." But he cautioned that lawmakers may disagree with Ricketts over certain parts of his legislative package.

Mello said he supports the roads proposal as a policy, but has concerns over its long-term impact on the budget.

"I think we do have some hurdles still ahead of us," Mello said.

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Associated Press writer Anna Gronewold contributed to this report.

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