Governor Pete Ricketts' State of the State Remarks submitted by the Office of Governor:President Foley, Speaker Hadley, Members of the Legislature, Tribal Chairmen, Distinguished Guests, Friends, and Fellow Nebraskans.
Congratulations once again on the commencement of the 104th Nebraska Legislature. I want to commend all of you for your willingness to serve your constituents and our great state. I recognize your personal sacrifice as well your commitment to public service, which is a high and noble calling.
I look forward to working together in a spirit of collaboration, which is of course the tradition of Nebraska's unique non-partisan institution.
Our future success as a state depends upon our ability to work together, and I look forward to continuing to work with each and every one of you.
Speaker Hadley, it's a pleasure to work with you and I look forward to what we can do for this state. Congratulations on being chosen to serve as Speaker. The confidence your colleagues have in you speaks volumes and Nebraska is grateful for your dedication.
I also want to take a moment to recognize the Nebraska National Guard. The role of these men and women, who are truly citizen soldiers, has never been more important, has never put more pressure on families, and has never been more difficult or dangerous. We live in a dangerous world. They not only protect us by deploying to foreign regions, but they keep us safe here at home in situations like the tornados in Pilger and Beaver Crossing. We are grateful for their service and sacrifice.
Nebraska is a special place. We are more than just lines on a map. We are bound together by more than just our common geography. It's a culture, it's a way of life. It's the way we treat each other with dignity, respect, and civility.
We have a great state, built by our ancestors who made Nebraska home for themselves and for their children and grandchildren. Like our ancestors before us, we have a duty to create an even better future for our kids and grandkids. And just as our ancestors before us, we have a duty to Grow Nebraska.
I'm excited to join you to take advantage of our opportunities. I am encouraged by the discussions I have had with many of you about how we Grow Nebraska.
As citizen legislators, you bring all of your life experiences to our work. I too have outside experiences, and I promised the people of Nebraska I would put my business experience to work for the state. To that end, I have worked to develop a budget, a blueprint that slows the growth of spending, provides for property tax relief, has room to make improvements in critical areas like corrections and HHS, and also funds the essential services of state government.
Let me take a moment to talk about my philosophy on the cash reserve. My budget recommendation for the next biennium does not draw down the reserves. However, right now, we have too much money there. My belief is we should work together to return more of that to the taxpayers. The remaining reserves should only be used for emergencies or one-time critical expenses.
It is easy to view a government budget as a collection of numbers in rows and columns next to agencies and programs, but behind the numbers are people's lives. We must be mindful that every dollar is precious. The dollars that fund our budgets are dollars earned by hardworking Nebraskans. We must also be mindful that the agencies and programs are designed to serve our citizens—and many of them are people in need.
This session, we will meet, we will debate, and we will even compromise, as we set about to fund the important services for the people we represent. That is our job and we will do it with dedication and commitment.
Today, I am privileged to report on the condition of Nebraska. It should come as no surprise that I believe the state of Nebraska to be strong.
Here in the heartland we have major military installations, academic research centers, and we are at the heart of the nation's agricultural system. Nebraska is on the front lines of bioterrorism preparedness. At the University of Nebraska Medical Center our medical professionals have made national headlines with their success responding to the Ebola outbreak. I want to recognize the members of that team who are here with us today for their success and bravery: Dr. Dan Johnson and nurses Kate Boulter and Shelly Schwedhelm. Thank you!
Our people, everyday heroes all across Nebraska, are the reason the state of our state is so strong. From teachers that prepare our kids for an ever-changing world to the medical professionals at UNMC treating Ebola patients. From the law enforcement officers and firefighters who put themselves at risk each and every day to farm families that feed the world. From the volunteers who build our communities to the crews at Offutt Air Force Base and our military families that answer the call. These Nebraskans love to serve and they make our state strong.
I have long said that Nebraska's greatest resource is our people. I know from personal experience when you hire a Nebraskan you hire someone who has a great work ethic, is well educated, loyal, and will help your business succeed.
As I have said before: Nebraska is what America is supposed to be.
I traveled Nebraska from Chadron to Falls City and from Norfolk to Ogallala. I have listened to the people of Nebraska. I was privileged in my travels to connect with old friends like Senators Lydia Brasch, Bob Krist, Curt Friesen, and Jim Smith.
I also appreciated new friends, who supported me like Senators Dan Hughes and John Kuehn who served on my Ag Advisory Committee, and Senator Dave Bloomfield who was supportive throughout Northeast Nebraska.
Senators Campbell and Mello were gracious to meet with me about issues, and Senator Bolz came to a Lincoln event we had with Lieutenant Governor Mike Foley.
This budget, which is informed by my discussions with many of you—and by the fact that I grew up here—represents not only the priorities of Nebraskans, but their hopes for our shared future.
I'm eager to work with you on four major priorities to Grow Nebraska: First, strengthening our economy and creating jobs; second, reducing taxes; third, ease regulatory burdens; and additionally, expanding educational opportunities. All of these priorities are interconnected and are reflected in my budget recommendation.
Because it is so important that we boost our economic engine and create jobs, one of my administration's first steps was to conduct a national job search for a new Director of Economic Development. I'm proud to have Brenda Hicks-Sorensen, join my team. Her expertise will help us realize the untapped potential in our state, and we will be well-served with her track record of recruiting businesses. We want the world to know Nebraska welcomes business investment and has good jobs in great communities, and Brenda will help get the message out.
But creating jobs is more than just a marketing focus or incentives. We need to evaluate what we are doing to encourage small business to expand and grow. We need to have a plan to attract business investment as well as business relocations. We need to be strategic and aggressive about trade opportunities.
And there is no better place to start expanding export opportunities than with agriculture.
Our farmers and ranchers are feeding the world. According to Ronnie Green at the University of Nebraska, by 2050 there will be two billion more people on the face of this earth and because of rising standards of living, we will have to produce one hundred percent more food. Seventy percent of that will have to come from productivity and innovation. Our farmers and ranchers are the most productive and innovative in the world. Nebraska is number one in cattle on feed, number two in ethanol production, number three in corn production, and we are the fourth largest state for overall agriculture production. And I look forward to working with Senator Johnson and the Agriculture Committee to expand upon these successes.
This budget provides additional funds for more export trade missions in both the Department of Economic Development and the Department of Agriculture, and under my administration these departments will work more closely together than ever before.
Job creation, in part, depends on a tax climate that encourages growth. We have a lot of work to do to stay competitive with neighboring states. And staying competitive is something that is often overlooked when we talk about jobs. We need to attract new individuals and families to Nebraska.
We have a great way of life and great jobs to offer. Now, we need to highlight that and invite people to make a home in Nebraska. Unemployment in Nebraska is about 3 percent, which is a blessing and a challenge. A recent State Chamber study said retaining a skilled workforce is one of the top concerns of our business leaders. We have long discussed the problem of brain drain, and I can tell you as a dad that I want all roads to lead back to Nebraska. To do that we need to remove the obstacles.
Which is just one reason why we must reduce taxes.
According to one national business news network, we are the third overall highest taxed state behind only California and New York. Think about that for a second. We can do better.
Our high tax reality does not just hit the wallets of our citizens—it creates a reputation. It discourages new business investment. Our high taxes also discourage people from choosing Nebraska as a place to live, work and raise a family.
There is one consistent message I have heard in every corner of the state: property taxes are too high. My budget adds $60 million each year to the property tax credit relief fund—an increase of nearly 43 percent—for a grand total of $400 million in property tax relief this biennium. This property tax relief will help all Nebraskans: homeowners, small business owners, and our farmers and ranchers.
An example of someone we can help is Roger Brandt. Roger is a farmer from Carroll up in Wayne County who is here with us today. Last spring, Roger showed me his tax assessments for the three pieces of property he owns. His assessments increased between 36 to nearly 50 percent for each parcel in just one year. That is not sustainable. That is why I also want to work with you to reduce the ag land valuation. I have funded a phased in approach in my budget to reduce valuations from 75% to 65%.
We did not get to be a high tax state overnight, and we won't get taxes down overnight either. But together, we can take important steps toward providing tax relief.
I do want to take a minute to talk about funding our priorities. One of the most important things we do in government is take care of our most vulnerable citizens. As elected officials we give a voice to the voiceless. In Nebraska, we can—we must—do better.
My administration is conducting a national job search for a new CEO of Health and Human Services. I am looking for a transformational leader to reform the culture. State government needs to work for the children who are in the care of the state, for individuals who are in state facilities, and for all those who rely on government services.
We need a culture in our state agencies that is people-centric. The people who need our help do not fit neatly into the silos we have created. We need a system that cares for the entire person, helps them reach their full potential and if possible helps them live a life free of public assistance.
There are people who will continue to need our help. We must serve them effectively and with dignity and respect. When we start getting better outcomes for people, our costs will come down too.
Many people who receive services just need a hand up to get back on their feet. We have to prevent government from getting in their way. Last year, I met Susanne Shald in McCook. Susanne is widowed and her three kids receive health insurance through Medicaid. She works hard and is intent on teaching her kids a strong work ethic like her father taught her. So when her 16-year-old daughter got a job and was informed that if she earned more than $6,000 a year, she would lose her health insurance, Susanne was infuriated. I don't blame her. Susanne and her family have joined me here today. Susanne and her children put faces on our need for a common sense approach in government—one that does not create disincentives for people and families to work.
Next, it is time to pursue comprehensive reform in our corrections system, another department in need of a cultural change. Scott Frakes will be joining my administration as the new Director of the Department of Corrections. He brings over 32 years of experience starting as a corrections officer and working through the uniformed ranks before moving into management. I am confident that he will help chart a new course for this agency.
Inmates released early by mistake threaten not only the public safety, but also the public's trust in their government. Nobody in corrections wanted these mistakes to occur, but they did, and we have got to do better.
Under Director Frakes, we will create a culture of accountability, common sense, and excellence. The Department of Corrections will seek to improve its rehabilitation and reentry programs to address recidivism. We will immediately evaluate our short term and long term needs and set out on a course of reform to this system.
This budget leaves room to address immediate reform needs in corrections.
Many of you here today have worked to tackle the issues in corrections. There is no branch of government that has cornered the market on good ideas or solutions for this issue. We have to work together, executive, legislative, and judicial for comprehensive reform that includes addressing sentencing and good time laws, mental health, and management of these facilities. I will work with Scott Frakes to get a full picture of what we need to do; and I look forward to sitting down with the leadership of this body to set a time table we can agree on to make substantive changes.
This budget holds the growth of our state spending to a little more than 3 percent over the next 2 years. That is a slower rate of growth than the approximately 6.5 percent in the last biennium.
We will fund our priorities, but in a way that is sustainable. We grow our revenues about 5 percent a year on average. If we can restrain government's growth, we can afford to put money back in the pockets of taxpayers. In turn, taxpayers will be able to afford more goods and services, businesses will expand and we will Grow Nebraska.
Another way I have taken action to drive operational excellence in every corner of state agencies is a private sector solution to create the position of Chief Operating Officer. I have hired Felix Davidson, United States Marine Corps Captain and a business executive with a proven track record of success in change management and process improvement.
I have one more tax relief proposal—an important one. Like many of you, I believe we need to eliminate the state income taxes on the retirement benefits of our military families. I have left room in this budget package to work with Chairman Gloor and the Revenue Committee to give our veterans relief. Chairman Gloor, I thank you for your service in the U.S. Air Force, and I know you understand how important it is to take care of our veterans. From the crews at Offutt Air Force Base to the National Guard Armory in Scottsbluff, we cannot thank our men and women in uniform enough, and we do not want to lose these treasured individuals to other states.
Besides high taxes and lost talent, our business leaders say overregulation is a top concern. We all want clean air, clean water, and safe working conditions, but we must also apply common sense so that we do not create barriers for our businesses creating jobs.
When we get our property tax bill we can see exactly how much we are paying. The cost of regulation, however, is hidden—but it's a job killer all the same. As governor, I will stand up to the overregulation forced on us by Washington.
Whether it is new health care mandates on employers, EPA overreach on carbon emissions and the Waters of the US, or the delay of the Keystone XL pipeline, Washington just does not get it.
I have urged Congress and President Obama to swiftly approve the Keystone XL pipeline. It will bring much-needed tax revenue to Nebraska counties not only during construction, but for years to come.
And back here at home, we want to set a good example. I will be asking all of my state agency directors to make it a priority to innovate ways to reduce regulatory burdens and bureaucratic delays. Proper regulation protects our health and safety. Overregulation delays progress and growth. We can do better and we will.
As we seek to create jobs, slow the growth of government, reduce taxes and fight burdensome regulations, we must also continue to strengthen our education system.
As we balance our budget, we must ensure we put a priority on proper school funding and improving educational outcomes.
In particular I have talked a lot about career and vocational training. Every manufacturer I have talked to has said they cannot find enough skilled labor, and that is a barrier to expanding. To address this I propose an investment in innovation.
My budget includes funding a pilot program—$250,000 each year—to form a public-private partnership to create a career and vocational training program. Good-paying jobs in the skilled labor force, agriculture, and manufacturing are a great option for our young people. I visited Ash Grove Cement in Louisville and they were telling me if you get at 2-year electrician's degree out of high school, you will start working for them at $22 or $23 per hour. Stay there a year and pass 2 tests and you will be making $28 an hour. Now think about that, that's a 21-year-old making $56,000 a year plus full benefits. That's the start of a great career.
As I mentioned before, we honor the service of our national guard. My budget recommendation also includes an additional $120,000 per year for a total of more than $488,000 of tuition assistance for the patriots who serve in the Nebraska National Guard. We need to help them further their education as well.
As we work together, I want you to know about the culture we are fostering in my administration. Every day, I want my team to ask a couple of questions: How can I serve the people of Nebraska better today? As well as, what can we do to make Nebraska a place people want to be?
While many of us in this chamber have differing political philosophies or come from different ends of the state, I know we are united. We are united in our desire to make Nebraska a better place for our communities and for our children and grandchildren. We are united in our desire to make Nebraska a place where people want to be.
From the Native Americans who nurtured our rich land; to the pioneer homesteaders; to the founders of our great businesses, universities, farms and ranches, our ancestors built more than a state.
They built a community that reflects the best of America. Our ancestors made sacrifices for future generations, for the greater good of Nebraska. And so we too will focus on the future.
We will harness the spirit of our UNMC heroes and all the nurses and doctors across the state.
We will call upon the dedication of police officers and firefighters in Nebraska's cities and towns.
We will harness the determination of Roger Brandt and Nebraska's Veterans.
And we will call upon the hard work and aspirations of Susanne Shald and her family and all of the hard working families across Nebraska.
We will work together fueled by their strength and acting on their behalf. We will Grow Nebraska.
Thank you. God Bless you and God Bless the people of this great state.
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