LINCOLN- Lawmakers’ dreams of making major tax cuts this year are about to collide head-on with the pandemic-driven costs of caring for Nebraska’s most vulnerable citizens.

On the one side are proposals to reduce individual and corporate income taxes, exempt Social Security benefits from taxes, and drive down property tax bills with increased state aid for schools.

People spoke in support of proposals to raise provider rates by 10% to 15% in the fiscal year starting July 1, bills that would boost state spending by $75 million or more for the two-year budget period.

Based on the committee’s preliminary budget plan, that would leave $30 million or less for tax cuts or other spending priorities. The amount available could change after a state panel meets in late February to update state revenue projections.

State Sen. John Stinner of Gering, the Appropriations Committee chairman, said rate increases are necessary to fulfill the state’s obligations in an unprecedented time. He said he hopes to lay a foundation, between state dollars and federal pandemic relief money, so providers can emerge from the pandemic with competitive wages and the ability to provide critical services.

“Increasing provider rates is something you have to do,” he said. “You do not want to call out the National Guard for group homes. All I’m trying to do is do what’s right, trying to keep people in business, trying to keep services going.”

But it will be up to the full Legislature to decide where to put the state’s money.

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