I spent most of last week in Lincoln working with staff and meeting with other members of the body to discuss new legislation for 2027 and preparing for upcoming interim studies.

I will be hosting an interim study on LR310 on October 16, regarding the organizational structure of the Nebraska Tourism Commission. Prior to 2012, the Tourism Commission was part of the Nebraska Department of Economic Development (DED). The primary reason for separating tourism from DED was to ensure that there was a statewide focus on tourism by creating a commission that had representation across the state. The commission is funded from occupation taxes collected for room rentals by hotels and motels across the state.

Last session, there was a bill introduced to combine the two entities again. I opposed the bill because I felt that the reasons for separating the two entities were still valid today. Since the bill did not advance, I then introduced LR310 to allow us to study the matter over the interim. I understand the interest in trying to combine a singular focus under one entity, but I remain skeptical that rural Nebraska will get the attention that it deserves and receives under the current structure. I scheduled the roundtable-style hearing to be held at Mid-Plains Community College to help allow more rural residents to take part in the deliberation process. Given the tremendous success of the commission under its new director, I see no reason to change course.

With the mid-term election just around the corner on November 3, we are seeing many political ads making promises and indicating they want a new direction. Many of these ads also exaggerate the financial position of the state of Nebraska. Let me be clear: the state is far from bankrupt.

Every year, the Legislature ensures that the budget is in balance based on the projections from the Nebraska Economic Forecasting Board. The Forecasting Board provides the official numbers that the Legislature is required to use when balancing the budget. This past year, the revenues were off due to the changes in federal tax policy that allowed for significant reductions in taxes owed at both the federal and state levels. As a result, tax refunds to Nebraskans were higher than expected. However, on the positive side, sales tax receipts have been running well above projections, indicating strong consumer spending which generally indicates a strong economy.

There are also several economic factors that are harder to quantify. For example, the effects of wildfires and resulting herd liquidation are hard to measure currently, but the demand for beef remains high and industry profits are still strong. Grain producers have seen production problems in the western portion of Nebraska, but generally favorable yields in the eastern portion of the state. However, the recent heavy rainfall in the eastern half of the state has created significant harvest problems that may also result in poor grain quality. Most grain producers use some form of crop insurance and due to production challenges elsewhere, price levels have risen above the cost of production. In the end, I expect results to outpace early expectations.

In 2027, the Legislature will once again balance the budget without over-depleting reserves. As I visit with my colleagues, we are very cognizant of pervasive concerns about the burden of property taxes and the need to reduce them. Many political subdivisions are raising property taxes at rates well above inflation, you can expect that steps will be taken to address this. It should also be noted that nearly half of the state budget is already devoted to property tax relief in one form or another. In each of the past three years, the Legislature has supported the Governor’s request to increase the Tier II property tax relief fund by $750 million to provide direct credits on your property tax statements. The direct property tax credits now total nearly $1.7 billion annually.

So, when politicians say they want to go in a different direction, ask what direction they want to go. Do they want to reduce your property tax credits? Or do they want to preserve those credits by raising other revenues? Personally, I support shifting more tax revenue to sales taxes. I believe we can expand the sales tax base without the need to tax agricultural and business inputs or necessities. I am also supportive of economic development efforts with proven impacts. Growing our state will continue to be key to solving our tax challenges at all levels.

It is a privilege to represent you in the Nebraska Legislature, and I look forward to hearing from you regarding issues that are important to you. I can be reached at 402-471-2729 or by emailing me at mike.jacobson@leg.ne.gov.