Gov. Cites Continued Progress in State of the State Address

(Lincoln, Neb.) Gov. Dave Heineman delivered his State of the State address to the Legislature today, outlining proposals designed to continue building economic vitality throughout Nebraska. The address focused on reshaping Nebraska by expanding property tax relief, creating high-paying jobs and maintaining a prudent cash reserve.

The Governor called for additional property tax relief while also providing funding for strategic investments in key areas for the state. His budget recommendations for the remainder of the 2007-2009 biennium include investments that would provide one-time funding for roads projects and develop a single student information system for the University of Nebraska and the Nebraska State College System.

"Today, I am pleased to report that Nebraska is making progress in creating new jobs for our young people and expanding middle class job opportunities, but we have more work to do," Gov. Heineman said. "While we have made progress in lowering taxes in previous legislative sessions, taxes are still too high. Tax relief must continue to be a priority for our state and that is why I am proposing additional property tax relief as part of my budget recommendations."

The Governor's proposal would expand the tax relief package passed during the 2007 session by directing an additional $75 million to property tax reductions. The one-time investment would come from the Cash Reserve Fund and would be added to the $115 million already appropriated for property tax relief in FY 2008-09. The proposal would bring the state's investment in the Property Tax Credit Fund to $190 million next year and provide an estimated $151 property tax relief per $100,000 of assessed value.

"Our state economy continues to grow and I am proposing that we return this additional revenue to Nebraska taxpayers as a priority," Gov. Heineman said.

In addition to expanding tax relief for residents, the Governor has proposed increasing tax credits for businesses that create new, high-paying jobs in Nebraska.

Known as the Nebraska Super Advantage, the proposal would encourage companies to create jobs paying 200 percent of a county's average wage or 150 percent of the state average wage, whichever is highest. To qualify, businesses would have to create a minimum of 75 new high-paying jobs.

The Governor also called on state senators to maintain a prudent Cash Reserve Fund, expected to total nearly $465 million by the end of the 2007- 2009 biennium.

"The members of this Legislature have the experience and the wisdom to appreciate the value of a robust cash reserve," Gov. Heineman said. "There will be a temptation to spend it, but your leadership can preserve it. Your legacy can be a Nebraska better prepared for future progress."

In the budget recommendations introduced today, the Governor has proposed directing $15 million in state General Funds to the Roads Operations Fund. This one-time expenditure would potentially offset a possible shortfall in federal funding for Nebraska roads projects.

The Governor is also proposing $10 million for the University of Nebraska and the Nebraska State College System to begin a joint effort to develop a single student information system.

Other investments recommended by the Governor include fully-funding the state aid to schools formula. The Governor proposed providing an additional $53 million in funding for K-12 schools in FY 2008-09, bringing the state's appropriation for K-12 education to more than $900 million next year.