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Reaction to Ricketts' State of the State Address

Posted at 5:22 PM, Jan 12, 2017
and last updated 2017-01-12 23:13:25-05

Governor Pete Ricketts delivered his annual State of the State address on Thursday, addressing a roughly $900-million dollar budget deficit over the next two years, spending cuts but no tax hikes.

Ricketts promised to never support a bill raising taxes and his priority will be cutting taxes while providing more funds to the state's broken prison system and K-12 education.

“In a responsible way within our budget, looking to be more effective and efficient,” said Ricketts.

The budget shortfall is due to a decrease in farm income and reduced sales tax receipts but Ricketts said he wants to cut property taxes and proposed taking the top income tax rate-which currently is at 6.84% down roughly one-tenth of 1-percent per year starting in 2020-as long as state revenues grow 3.5-percent per year.

“For us to be more competitive we have to address that top income bracket,” said Ricketts.

But that argument worries Omaha Senator Burke Harr.

“We don't know what the situation is going to be in 2020, right, we may have another corrections problem, we may have another HHS problem we may have something lurking that we don't know about,” said Harr.

Ricketts also wants to dip into the cash reserve that’s expanded over $600-million dollars leaving it around $500-million dollars.

“I'm very concerned about the rainy day fund, this will be the second biennium in a row that we dipped into it,” said Sen. Bob Krist.

The governor's proposed state aid to K-12 education funding would grow by 2.7-percent and the Department of Corrections will get the money it requested.

“Corrections is an agency that we prioritize, we didn't want to interrupt the reform going on there and so we fully funded their budget request,” said Ricketts.

Now that Ricketts’ proposal is out there, it's up to the senators to pick it apart.

“It's a plan and I’m optimistic, we will balance the budget, but at what cost, we'll see,” said Krist.

To see the entire State of the State speech and read the script click here:

http://www.kmtv.com/news/local-news/governor-delivers-state-of-state