Nebraska governor wants to spend tax surplus on canal in Colorado, income tax cuts, new prison

LINCOLN, Neb. (WOWT) - Gov. Pete Ricketts on Wednesday outlined three spending priorities for Nebraska’s massive tax surplus.

The state is sitting on a $1.6 billion tax surplus based on reserves and economic forecasting.

The governor wants to use some of these funds to take private land and build a water canal there. Ricketts and his team said that based on a 100-year-old compact, Nebraska can take the Colorado land and build a $500 million water canal there to channel and boost how much water flows into Nebraska.

When pressed about whether Nebraska leaders could approach their Colorado counterparts in a “cooperative manner,” Nebraska Department of Natural Resources Director Tom Riley said that’s not an option.

“Colorado would have no obligation to just say, ‘Hey, here’s an extra 500 CFs — just give us a shout, we’ll make sure it’s there.’ ... Just as we wouldn’t for Kansas or anybody else,” he said during the governor’s news conference on Wednesday. “This is just part of the compact — a segment, an article — that we have never enforced. Our way to enforce it is to build a canal.”

The Legislature needs to approve $400 million before it can be used to build the canal; $100 million is coming from federal COVID-19 cash.”

The second item is a bill, introduced by State Sen. Lou Ann Linehan of Elkhorn, which would cut income taxes. She said taxes are the major reason why young people are leaving Nebraska.

“We need to make sure that we are doing our part to make sure they stay in Nebraska and they can be successful,” she said. “When we have these kinds of revenues, we have no right to keep that money from those families.”

The third priority for the tax surplus spending plan involves building a new $270 million prison in Nebraska. State Corrections Director Scot Frakes said Wednesday that he’s having “multiple conversations” over land options for the prison location.

Watch Wednesday’s news conference

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