This past week was one of some good news for the nation and for Nebraska, even in the midst of civil unrest. Riots and civil unrest dominated the media, mostly drowning out the good news that as the economy in many states begins to reopen, jobless claims are down and there is reason for optimism as we emerge from the limitations of the Coronavirus (COVID-19) pandemic.

The protests in Lincoln turned to violent and destructive riots, resulting in property damage to businesses including some broken windows at the Capitol. Calm has been restored in the city and damages are being repaired. There was no damage that will negatively affect the planned return of your Legislature on July 20, 2020.

While there were protests in many cities throughout the United States, District 17 and most rural areas of Nebraska were largely peaceful, working to stay healthy during the pandemic and starting to re-open businesses that are important to our economy and our quality of life.

Dakota County began Phase 1 reopening under loosened limitations, while Thurston and Wayne Counties began Phase 2. You can find more information on the reopening guidelines for District 17 counties in my May 22, 2020 Weekly Update at my Legislative webpage: http://news.legislature.ne.gov/dist17/

On the economic front, we have seen the USDA work alongside the State of Nebraska to begin bringing much needed relief to the agricultural community and, as counties begin to open up under loosened restrictions, we have seen optimistic signs as people return to work.

The jobless claims rate came in unexpectedly low this past week and 2.5 million jobs were added during the month of May. The national unemployment rate fell from 14.7% to 13.3%. Nebraska unemployment figures for May are not yet available but, while Nebraska’s April unemployment rate rose to a historical high of 8.3%, it fared far better than the national rate of 14.7%.

Here in Nebraska, economist Ernie Goss, PhD continues to analyze and give updated numbers as they are released every Thursday. In a recent Platte Institute Webinar featuring Dr. Goss, he analyzed the latest numbers. Manufacturing in Nebraska is on the rise, but the service industries were hit harder, and the agricultural sector hit the hardest by the economic shutdown resulting from COVID-19 concerns. Dr. Goss estimates that the fiscal impact to Nebraska from March 14 to May 5, 2020 is $80 million. However, this figure does not take into account relief brought by the CARES Act.
Dr. Goss said he expects Nebraska hit the peak of unemployment mid-May. He expects a rebound in the stock market and, although optimistic about recovery, does project that it will take longer than originally hoped.

As I studied the video and analysis, I was pleased to hear the experts say that although this may be the most severe recession we have experienced, it should also be the shortest in duration.

The Legislature must take a leadership role in the recovery process. I do not believe any of us are surprised at Dr. Goss’ prediction that the State will need to tap into its reserves to make up for the decline in revenue brought about by COVID-19.

As your representatives, we must focus on reducing property tax burden and concentrate providing a regulatory environment that facilitates business start-ups and growth.

We will not know the total impact to the reserve funds until we know the revenue from income tax. Those figures will not be available until after the delayed filing deadline of July 15. The Governor and Chair of the Executive Committee have called for a special meeting of the Economic Forecasting Advisory Board on July 23 to consider the impact of COVID-19 and to review and revise the forecast of net general fund tax receipts for the remainder of the biennium accordingly.

The key to successful recovery is unified purpose and shared sacrifice at both the State and local levels. The Legislature, along with local government entities, including our K-12 and secondary education providers must work together to reduce the tax burden on already stressed property owners, businesses, and agricultural producers by restructuring the property tax system. We have already seen plans to rein in spending by the University of Nebraska and Creighton University. We also need local school districts, specifically the larger districts in Lincoln and Omaha, to step up and support property tax reform that allows flexibility in property valuations and that reduces school districts’ reliance on property taxes. So far, Senators representing the largest school districts have made a concentrated effort to stall that reform by use of filibuster. These districts continue to have higher property taxes than most of Nebraska, while also receiving the largest amount of supplemental state funding under the current formula. As I have noted in prior newsletters, the current property tax reduction proposal (LB1106) would decrease the schools’ reliance on property taxes while increasing state aid and provide per pupil state aid funding equally to school districts across the state. This approach would reduce the burden to individual, business, and agricultural property owners. It is time that these large school districts release the senators representing their districts to do the right thing for all of Nebraska by joining with senators who have been working tirelessly to bring balanced tax relief to all taxpayers across the state.

As always, I invite you to let me know your thoughts, ideas, concerns, or suggestions by contacting me at jalbrecht@leg.ne.gov or by calling my office at 402.471.2716.