Governor says Nebraska faring well compared to others states, but he cites much uncertainty

Neb. governor: State well-positioned for growth

LINCOLN, Neb. — Amid looming budget problems, Gov. Dave Heineman tried to shift focus to Nebraska’s financial health compared with other states’ while acknowledging Thursday that the next 12 to 18 months would be a time of economic uncertainty.

In his annual State of the State address, the Republican said Nebraska has gained a reputation as a good place to do business and for people to get a fresh start as other states’ economies falter.

His agenda, however, includes few new initiatives to help Nebraska leapfrog other states in the competition to attract new jobs.

Heineman instead focused on successes over the past year, and in previous years, noting that 195 companies plan to invest $5.3 billion and create 16,000 jobs because of a tax break package implemented four years ago.

“He talked a lot about the last three years, but I think what we’re hearing there is we’ve reaped the benefits of some past actions that’s keeping us from going to the lowest of lows, to help prepare us to move forward,” said Sen. Chris Langemeier of Schuyler.

The state’s pending budget woes are a reason for Heineman’s largely stay-the-course agenda: While in a stronger position than other states, Nebraska lawmakers and Heineman in November dug the state out of the largest budget hole in recent memory and may have to do the same later this year if dismal fiscal projections hold true.

Analysts say the state may have to close another budget gap for the two-year budget cycle that begins in July 2011 — and it could be nearly twice as wide as the $334 million hole lawmakers closed two months ago.

Some say such a deficit could lead to the elimination of entire programs or agencies.

The exact effects of the largely across-the-board cuts imposed on state agencies during the November emergency legislative session is unclear, as lawmakers have yet to receive reports from state agencies.

Heineman said the state is still well positioned moving forward.

“During this national economic slowdown, we have seized the opportunity to make Nebraska more competitive,” he said. “Many states have raised income or sales taxes — Nebraska has not. Many states spent beyond their means — Nebraska did not. We controlled our spending.”

Heineman, who takes great pride in having implemented tax cuts in the past, is not proposing further tax cuts but emphasized tax increases won’t be considered.

During the current short legislative session — historically a time when state agencies ask for more money — there are no new recommendations that lawmakers significantly boost the budgets of state agencies.

One budget change Heineman is recommending in the middle of the current, two-year budget cycle is that the legislative and judicial branches cough up money to help fully fund property tax breaks for the elderly, veterans and disabled.

Budget analysts say the $3.6 million the state needs to fully fund existing homestead exemptions — which make certain percentages of home values off-limits to property taxes — is likely due to falling incomes that have made more elderly, vets and disabled eligible for the program.

Heineman’s speech also focused heavily on education. He pushed for efforts to reduce truancy in Nebraska schools, namely in Omaha, and to eliminate academic achievement gaps between students.

“Additionally, Nebraska needs to reform its school day and school year,” Heineman said. “The needs of students have changed dramatically during the past century, yet our American education system continues to rely upon a 100-year-old school calendar.”

He stopped short of proposing that the school day or year be lengthened but said districts “need to examine their current school day and school year with a focus on increasing learning opportunities.”

Heineman also announced his intention to work with the state department of Education and the University of Nebraska to create a so-called virtual high school so students in both rural and urban districts can take a wider range of classes online.