Things to watch for as Nebraska Legislature opens 90-day session on Wednesday

LINCOLN — The 2023 session of the Nebraska Legislature opens Wednesday, and Day 1 will set the tone for a 90-day session focused on adopting a new, two-year budget and deciding how to use a record-high surplus of funds.

Following the swearing-in of 13 newly elected state senators and 11 re-elected incumbents, lawmakers will dive into a debate over whether leaders of  legislative committees should be elected via secret ballots, as has been the tradition, or via public votes.

Kumbaya or chaos

There was talk Tuesday of peace breaking out — referred to as “kumbaya” after the folk song that evokes harmony — and senators sticking with tradition to avoid a divisive start to the session.

But there were also lawmakers predicting a Day 1 donnybrook that could devolve into a weekslong fight over the legislative rules. That’s what happened in 2017, when senators spent more than a fourth of that 90-day session fighting over rules.

“Whatever we do, we do not want to derail the session like we did six years ago. That turned out to be a waste of time,” said State Sen. Tom Briese of Albion.

Omaha Sen. Justin Wayne said he hopes that a rules fight can be put off for another day with so many new senators and a new speaker of the Legislature coming in. A rules fight could block the election of a new speaker and new committee chairs and delay work on legislation.

“You don’t want chaos on the first day like that,” Wayne said.

Secret vs. public leadership votes

Critics of such a rules change say it would change the nonpartisan nature of the Unicameral Legislature, making the races for committee chairs a partisan power play, rather than a vote for who’s best qualified.

But supporters of making such votes public maintain that constituents should know how their representative voted and that the world won’t end if the votes are made public.

“I believe people should be able to know every vote I make down there,” said Bayard Sen. Steve Erdman. 

There’s been talk in the past of ending the secret ballot voting for committee chairs, but the effort got a push this year from Falls City businessman Charles Herbster, who ran unsuccessfully for the GOP nomination for governor. He elicited pledges from senators to end the practice through his political action committee, Nebraska First PAC.

Beyond whether the 2023 session will start with a big fight or relative calm, here are some things to watch:

1. How senators will use a record surplus in state funds.

The state’s cash reserve fund has $1.3 billion more than required over the next two fiscal years, and state tax receipts, bolstered by stimulus spending, were nearly $2 billion more than required by the end of the 2024-25 fiscal year.

That’s a lot of money for big ideas and big tax breaks.

Rebecca Firestone, executive director of the OpenSky Institute, cautioned state senators  Tuesday to remember that the surplus is likely temporary and that the $1.9 billion figure is a projection and could change. She also noted that a major tax package passed last session will have an impact on future state revenues.

Elkhorn Sen. Lou Ann Linehan, who heads the tax-policy-deciding Revenue Committee, said she’ll be pushing to accelerate three tax cuts passed last year on a phased-in basis, as well as a reduction in the state’s top personal income tax rate to 4%.

Phased-in reductions in state personal income and corporate taxes, along with the gradual elimination of state taxes on Social Security, would happen sooner under Linehan’s plan.

Briese, a farmer who has pushed hard for property tax relief, said that any tax package has to include property tax relief, either through increased state tax credits or via state “foundation” aid for K-12 schools.

“We have an unprecedented opportunity for tax relief, and it’s incumbent on us to deliver that tax relief,” he said.

Omaha Sen. John Cavanaugh, who pushed last year to give taxpayers a rebate check from the state’s surplus funds, said any reductions in income taxes must provide cuts for the middle class.

“We gave tax cuts to the higher brackets last year,” Cavanaugh said. “We need to spread it around to more folks.” 

Linehan predicted that, as in past years, a tax relief package would combine several priorities.

“We just have to keep the ball rolling in the right direction,” she said.

2. Some big ideas for spending.

Lawmakers will debate whether to allocate the final $115 million towards construction of a new, 1,500-bed state prison in eastern Nebraska.

And there will be more discussion of investing $600 million in the Perkins County Canal, a recently resurrected project to retain Nebraska’s full rights to flows from the South Platte River.

Colorado and the growing Front Range now have designs on flows from that river. Nebraska officials say the only way for the state to retain enough water for irrigation, cities and wildlife here, is to build the canal.

There will be other big ideas. Sen. Tom Brewer of Gordon said he and Wayne are loading up for a big investment in Nebraska parks and hunting opportunities. Nebraska, Brewer said, is missing out on drawing tourists and hunters.

3. Adopting voter ID requirements.

Nebraska voters resoundingly approved a constitutional amendment in November that requires photo identification to be presented before casting a ballot. It gave the Legislature the job of sorting out the details.

Brewer, who heads the committee that will screen voter ID proposals, said they should not place obstacles against people being able to vote.

“We need folks voting, and (need to) make sure if they can’t afford to get IDs, that we help them with that cost,” he said.

4. Changes in state aid to K-12 schools.

There’s been much talk about changing the state’s complicated formula for distributing state aid to schools over the years, but few breakthroughs.

Incoming Gov. Jim Pillen made changing the state’s “broken” system a campaign priority, and he has a committee working on a proposal.

There’s been no information so far about what that committee has come up with, and Fremont Sen. Lynne Walz, the current chair of the Education Committee, said it will be difficult for that group to find a consensus in such a short time.

“I don’t know if they realize how hard it is to pass a school funding package,” Walz said.

Briese said any increase in state aid needs to come with some type of cap on local school spending so that increased state funding translates into lower local property taxes.

But Walz said she can’t support a “hard cap” on schools,because each individual school district can face an unexpected problem.

She said she’ll be pushing for an “education trust fund” — sort of like a cash reserve for state aid — to ensure that schools get adequate state aid even when Nebraska faces an economic downturn.

5. Criminal justice reforms vs. new prison construction.

Wayne said he’s working on reforms that will help reduce the state’s national-worst prison overcrowding. Among the ideas: launching more transitional housing for inmates leaving prison that includes job training.

The senator, who will likely lead the Judiciary Committee that rules over prison and sentencing policies, said he wants to see reforms adopted before a new prison is approved.