Two 'Debficits'

April, 2018

Lincoln -- The Nebraska Legislature is adjourning without providing property tax relief, further stressing the hard-pressed agriculture sector. The state budget simply can't sustain even the paltry amount half-heartedly offered by the governor. Now the state is facing a voter referendum on property taxes that may throw the state into fiscal chaos not seen in decades.

At the federal level, the Congressional Budget Office has just projected this year's federal deficit to exceed one trillion dollars, with many more such deficits projected far into the future. This is a huge reversal in the fiscal condition of the federal government, which in recent years had actually been cutting deficits.

These two dangerous conditions would not have developed had elected officials – one in particular – only abided by basic tenets of fiscal responsibility.

At the state level, when times were momentarily flush for agriculture, and when state revenues were growing nicely in 2011 and 2012, the legislature took a portion of the sales tax base and dedicated it to highway construction. This was a risky move as it violated a commonly accepted principle of public budgeting and finance: user taxes should pay for roads and sales taxes for general government. Rather than raising gas taxes, which for many years had been declining as a percentage of gas prices and construction needs, the legislature took tens of millions of dollars annually away from sales tax revenue, a textbook source of local property tax relief. The predictable happened: the farm economy faltered, land prices did not decline commensurately, and the state became crippled, unable to respond to the property tax crisis squeezing Nebraska's all-important agriculture sector.

At the federal level, Congress passed an unfunded tax bill in December of 2017, followed by a huge spending bill in early 2018. The combination is sending the federal deficit to unprecedented and dangerous levels.

One elected official has been instrumental in all three acts of breathtaking fiscal irresponsibility: Deb Fischer. As a state senator, she led the raid on the state sales tax base, which should have been preserved for property tax relief. As a U.S. senator, she voted for both the tax bill and the spending bill, sending the annual federal deficit over a trillion dollars.

Her name is now synonymous with deficits at both state and federal levels. Henceforth in Nebraska the word "deficit" should be called "Debficit."

It is no wonder that Deb Fischer has many challengers this election year, and that her re-election chances have been declining somewhat. Particularly in the Third District she may be weaker than many people assume. Nebraskans in this district especially want property tax relief and want their candidates to support federal fiscal responsibility, if not outright balanced budgets. Deb Fischer has a terrible record on both.