YORK – Bob Krist, a 10-year veteran of the state legislature and 24-year Air Force vet, is also the state’s Democratic nominee for governor.
Krist and lieutenant governor running mate Lynne Walz spent two hours speaking about their vision for solutions to Nebraska’s present property tax conundrum and answering questions on a few other topics.
Speaking first, Walz, a Fremont resident who represents all of Dodge County in the Unicameral, said that in her view there is a lot of influence concentrated in the present governor’s administration.
“He has a lot of power over certain state senators” for “his ability to put someone else in their place when the election comes up.”
Krist, a retired multi-aircraft pilot in the Air Force, noted he served the military for 24 years and state residents in the legislature for 10.
“I enjoyed my first six years in the legislature,” he said, but added, “The last four years, I will tell you, have been pretty painful.”
Krist, intending to make the point that in his opinion Gov. Pete Ricketts has manipulated the legislature, shared a past Ricketts quote, “Give me a legislature I can work with and we can get things done.”
Taking up the divisive matter of property taxes specifically, Krist said over the course of 10 years in the legislature and his entire life experience, “I believe you need to identify the problem first” and only then “figure out how to fix it.”
One problem Walz sees is that Nebraska state government “used to take 20 percent of income tax and fund education” with those dollars.
Over the years that 20 percent has been whittled down to less than 3 percent of income tax returned to local school districts in 2018.
“We’ve balanced the (state) budget on the backs” of local taxpayers.
In the years since the 2007 recession, he reported, “We borrowed from every cash fund and still cut programs” beyond that.
In addition, he said, “The state stopped sending any money to the counties. We said we’re going to keep that.”
Thus did “the perfect storm come together” to create the state’s present taxation Catch 22.
Special Education can be a crippling expense for school districts, yet state funding for SPED is down from 80 percent to below 50 percent.
“We’ve stopped funding education the way we should have,” he flatly stated.
The state, he said, has no option but to come together and find a way to bridge the rural/urban split among school districts and achieve consensus enough to flatten a worsening situation in the near term and reverse it in the long view.
The present funding formula, known by the mysterious acronym TEOSA, said Krist, “Is broken” and has “created haves and have-nots” among Nebraska school districts.
Krist favors a foundation approach to education funding in which a fixed and locked-in percent of the income tax in each individual district – a percent school boards could absolutely rely upon and budget accordingly, would come back to that district each and every year.
Such an approach would go a very long way in providing the local element of school finances and, in turn, relieve pressure on property tax duns, largely on agricultural land, that have gone through the roof.
How to replace those property tax receipts? Krist said there are a number of un-tapped or under-utilized revenue sources with great potential.
While stressing he’s not opposed to all of the tax loopholes that have been passed out piecemeal and now total an estimated $800 million in lost revenue a year, he said exemption gift horse’s feed could nonetheless be rationed better than is being done now.
In addition, he said, “We have many sources of income and revenue that have not been explored.”
Beginning with sales tax on internet purchases, Krist lamented that the Unicameral had everything in place to begin collecting the tax immediately once an anticipated Supreme Court ruling permitting that tax was rendered.
Krist said Ricketts, framed state sales tax collection on purchases made online, exactly as those obtained in brick and mortar stores, as a new tax or a tax increase and vetoed the legislation.
“It’s not a new tax, folks,” he said, noting that a multitude of states now receive internet sales tax proceeds.
The Supreme Court ruling came down exactly as predicted, however Nebraska has yet to collect a nickel of what some project to be an annual revenue stream of perhaps $30 million.
Krist feels that $30M number is likely short of the dollar value of what FedEx and UPS bring into Nebraska from beyond the state’s border.
Another wide-open economic growth area the candidate sees in the ag sector is production of industrial hemp.
“It’s not a drug,” he exhorted, “and we can grow it. It’s ditch weed and it grows everywhere. You’ve got to kill it to keep it from growing. This is a no-brainer,” he added.
It is ludicrous in his opinion that $60 million of industrial hemp is imported into the U.S. from Canada and is processed in this country into a variety of valuable products … “But we can’t grow it (legally)?”
He said industrial hemp has a long history as a value-added crop that dates back to rope manufacturing in the World War II era.
And what of sports betting … not the bets themselves but capturing dollars from online wagers that are placed every day in Nebraska.
“We are not taxing that service,” he said. “I’m not advocating for more gambling,” Krist emphasized. “This is about what’s going on now.”
He cited estimates that as much as $50 million is wagered per day on sports in this country.
Capturing those dollars, he said, “Is a simple plan. It’s just too simple for a billionaire to understand,” he added, eliciting chuckles from the room.
“Make no mistake, I don’t have all the answers,” he said, but pledged to sit down with all parties to these or other issues “and figure it out.”
Workforce development is a critical need, too, he said.
“We’re at a point where everyone in this state who wants to work is working,” which fosters adding economic value within the state’s existing workforce by fostering concepts like pursuing industrial hemp production in favor of chasing corporate giants with more jobs than the available employment pool could likely fill.
Krist also beat the drum for “the judicious use of bonding” to fund infrastructure such as the long neglected four-lane connectivity plan rather than relying upon the general fund. The latter’s roller coaster volatility, he said, has led to specific projects being started only to be suspended during lean financial times and started up again. The cycle, he said, yields rising costs in every case.
He said 2003 was the deadline for Phase 1 of a statewide four-lane expansion plan that now is slated to finish in 2033. Maybe. The cost has risen, he said, to $2.5 billion.
Bonding at a cost of 1.25 to 1.5 percent, he told the group, cannot help but be an improvement over annual cost increases of 3 percent or more over years of time during which nothing is completed.
Some of the state’s bridges, he said, “Are still not repaired from the 2011 flooding” on the Missouri.
In answer to a question, Krist said he very much favors expansion of Medicaid in the state, a question that will also be put to voters in the coming election.
Presently, he said, the state “is paying 100 pennies of every dollar” expended on Medicaid. Expanding it as planned, he explained, brings the federal government, the Veterans Administration and other outside payers into the formula. It must be an idea with an upside for states, he said, since 34 other states and the District of Columbia “already have expanded Medicaid in some way.”
Finally, as the father of a special needs daughter, Krist said, “We need to get medical cannabis in place in Nebraska in a correct way. We know what medical cannabis does for seizures in some cases and we know what it will do for pain,” including that suffered by many of his fellow veterans.
Medical cannabis, he said, would also help mitigate the “opioid epidemic in this country.”
First, he said, “is to get the issue on the ballot, and second is voting to pass it.” Even if the measure has the blessing of the electorate, “We will still need the governor,” whether the present administration or his should he be elected, “to take it forward.”
Ricketts, he said, opposes medical cannabis. Krist is in favor.