LINCOLN, Neb. — Nebraska’s population is aging, and lawmakers want to know what to do about it.
A demographic shift over the next few decades could mean a surge of retirees relying on public services and sluggish growth in the number of workers who drive the economy and generate tax revenue, according to a report produced for a legislative committee.
Some lawmakers say the state isn’t doing enough to prepare for changes that could become a major drag on the state budget and economy. Those worries have prompted them to try to take a long-term view of how state officials should respond.
“We could find ourselves in a position of having to take some drastic action on taxes or drastic action on state government (spending),” said Sen. Paul Schumacher of Columbus, chairman of the Legislature’s Planning Committee.
Nebraska’s working-age and retirement-age populations are both projected to grow between 2020 and 2050, but the number of new retirees will be larger, according to a report by Jerry Deichert, director of the University of Nebraska at Omaha’s Center for Public Affairs Research. Retiree numbers are also expected to increase at a faster rate.
Nebraska will gain roughly 112,000 new residents between 18 and 64 years old during that period, according to the report. The population of those 65 and older will grow by 146,000. The state’s growth is largely driven by Latinos and concentrated around Nebraska’s largest cities, while the most remote areas lose population, Deichert said.
By 2020, Nebraska is projected to have roughly 3.5 working-age residents for every person older than 65. By 2050, the ratio is expected to shrink to about 2.7 working-age people for each resident older than 65.
Schumacher, who leaves office in January 2019, said he’s concerned that lawmakers spend too much time reacting to “knee-jerk pressures of the moment” and not enough energy on long-term problems that will have a greater impact on the state.
An older population and fewer younger residents could worsen the state’s workforce shortage, which in turn could cause businesses to leave the state and make it harder to recruit new ones, said Renee Fry, executive director of the OpenSky Policy Institute.
Fry said lawmakers should respond by placing a greater emphasis on early childhood education, before- and after-school programs and career training for the youths who will replace today’s aging employees.
“Those kiddos are going to be a really critical part of our workforce,” she said. “We need to make sure they’re career-ready when they graduate. If we’re not thinking about these kinds of trends now, my fear is we’re going to have some real problems with the economy.”
The shift could also stress the state budget unless lawmakers respond proactively, said Sen. Kate Bolz of Lincoln, who chaired the Legislature’s Aging Nebraskans Task Force.
Bolz said lawmakers should make permanent the state’s Aging and Disability Resource Center, a pilot program created in 2015 to connect aging residents and their families to the level of services they need. The program helps about 8,000 people a month and saves the state money by making residents aware of services that are less expensive than nursing homes, such as in-home respite care, Bolz said.
Bolz said the state needs to maintain its investment in nursing homes, which are already struggling to hire and retain front-line workers.
Additionally, Bolz said the state should create incentives for more residents to buy long-term care insurance. One option is a tax credit for people who purchase coverage, which would reduce the number of residents relying on the state to pay for care in a nursing home or other facility.
“You need to ensure you’re providing the right incentives at the right time,” Bolz said.
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