Spending lid goes down

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BY NANCY HICKS / Lincoln Journal Star

Nebraska voters soundly rejected the state spending lid proposal and its threat of higher property taxes or cuts to services.

With 100 percent of the statewide vote counted, 70 percent of voters cast ballots against the amendment, which would have limited state spending growth to a cost of living increase plus population growth — likely about 3.2 percent next fiscal year.

Initiative 423, put on the ballot through a voter petition drive, had plenty of vocal opposition.

About 90 statewide organizations, including all farm groups and the state Chamber of Commerce, opposed the lid, spending more than $2 million on an education and advertising campaign.

They also sent information to their own members — more than 500,000 Nebraskans, said Karen Kilgarin, spokeswoman for an anti-lid coalition.

A similar coalition of statewide groups defeated a state tax lid on the ballot in 1998.

Even if the lid amendment loses,  state leaders must still pay attention to voter dissatisfaction with taxes, said John Hansen, president of the Nebraska Farmers Union, one of 13 farm groups that opposed the lid.

“There is obviously some fertile ground in Nebraska for these kinds of outside interests to come in and play out their ‘Nebraska taxes are way too high and the sky is falling’ kind of scenario,” Hansen said.

“I think the governor and Legislature are going to be heeding the voter unrest, and even if the 423 initiative fails, an effort will be made to continue to be as frugal as possible and trim where prudent,” he said.

Gov. Dave Heineman, who appeared headed to re-election Tuesday night, has already said he will be “tight-fisted” on the budget and will offer a restructuring of the income tax system with tax cuts for the middle class, said Aaron Sanderford, spokesman for Heineman.

The governor and Legislature approved more than $85 million in tax cuts last year when an improved  economy brought in higher-than-expected tax revenues.

The state is anticipating healthy increases in tax revenues over the next few years, averaging about 4.4 percent a year, “but that shouldn’t be construed as a license to spend,” the governor has said.

The proposed spending lid has provided a pricey debate, including lots of radio and TV advertising with simplistic messages.

Each side looked at the same issue but saw different results. And both sides accused the other of spreading false information.

Nebraska was one of three states with similar spending lid  initiatives on the ballot.

Groups with connections to wealthy New Yorker Howard Rich helped fund those voter initiatives and tried unsuccessfully to get similar lids on ballots in six other states.

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.