In the 1990 Nebraska gubernatorial election, Democratic challenger Ben Nelson narrowly defeated first-term Republican incumbent Kay Orr for the governorship of the state of Nebraska.
Orr's popularity had suffered due to changes in the state's income-tax structure enacted in 1987, which were seen as a violation of her pledge not to increase taxes. The impending construction of a low-level radioactive-waste repository in north central Nebraska also occasioned discontent with her administration. In the Republican primary, she easily defeated "perennial candidate" Mort Sullivan, but her winning margin was significantly smaller than expected.
Seven Democrats, four of them regarded as serious contenders, vied for their party's gubernatorial nomination. School funding, abortion, and the question of whether to establish a state lottery were among the issues that figured in the campaign. The primary election was so close that it took 48 days to declare Nelson the winner, by a margin of 41 votes.
The contest between Orr and Nelson was generally seen as an unusually negative one. Orr accused Nelson of questionable business dealings; Nelson accused Orr of violating the public trust. Each accused the other of negative campaigning. Salient issues included the 1987 tax changes; the radioactive-waste site; and a bill shifting a large portion of school funding from local property taxes to the state general fund, which included increases in the sales and income taxes, and which had passed over Orr's veto.
When the election was held, Nelson defeated Orr by a margin of 4,030 votes, with 49.91% of the vote to her 49.23%. It was suggested that a winter storm on the day of the election might have contributed to Orr's defeat, by reducing turnout among elderly and rural voters.
Background
In 1986, Republican Kay Orr, who had been Nebraska's state treasurer for five years, defeated Democrat Helen Boosalis for the governorship. During the campaign, Orr pledged not to increase taxes.
In 1987, at Orr's urging, the state legislature passed LB773, which changed Nebraska's method of calculating its personal income tax. Up to that time, the state's income tax had been a percentage of the taxpayer's federal liability. Under the new system, Nebraska would base its tax on federal adjusted gross income, with the state establishing its own system of exemptions and deductions. Proponents argued that such a measure was necessary to produce stability and give Nebraska greater control over its state revenues; opponents objected to the fact that the measure would increase taxes on lower- and middle-income taxpayers, while decreasing them for upper-income Nebraskans. The plan as proposed by Orr would have been revenue-neutral, neither increasing nor decreasing state revenue. The final version, however, as passed by the legislature and signed by Orr, increased receipts by an estimated $11–14 million.
The increase in revenues was seen as a breach of Orr's pledge concerning taxes, and her popularity fell as the new system went into effect. In December 1987, a poll indicated that 60% of Nebraskans approved of her performance and 25% disapproved; by March 1988, her approval rating had dropped to 48%, while those disapproving had increased to 38%. In December 1989, the numbers stood at 47% approval and 46% disapproval.
Orr's popularity was further damaged by the proposed siting of a low-level nuclear waste disposal facility in the state. In 1983, during the tenure of governor Bob Kerrey, Nebraska had joined Arkansas, Kansas, Louisiana, and Oklahoma to form the Central Interstate Low-Level Radioactive Waste Compact, under which a single disposal site would be constructed for all five states. In 1987, the members of the compact voted 4–1 to place the facility in Nebraska. At that time, Orr declared that she was not pleased with the choice, but had to acquiesce in the other states' decision. U.S. Ecology, the company chosen to construct and operate the facility, considered a variety of sites in the state. In January 1989, they announced that they had narrowed their choices to sites in Boyd, Nemaha, and Nuckolls counties; in January 1990, they declared that they had chosen the Boyd County location.
Democratic primary
Governor
Candidates Seven candidates ran in the Democratic primary. Four of them were regarded as serious contenders for the nomination. Mike Boyle, former mayor of Omaha, Nebraska's largest city. Boyle had been elected mayor in 1981 and re-elected in 1985, but in 1987 had lost a recall election brought about by a petition drive. Bill Harris, mayor of Lincoln, Nebraska's capital and second-largest city. Harris had represented a Lincoln district in the state legislature from 1982 until his election as mayor in 1987. Bill Hoppner, a former staffer for elected officials J. James Exon and Bob Kerrey. Hoppner had served on Exon's staff from 1973 to 1982, initially as legal counsel while Exon was governor, then as chief of staff when Exon was elected to the U.S. Senate. He had then returned to Nebraska and served as chief of staff for governor Kerrey from 1982 to 1984; in 1989, when Kerrey took a seat in the U.S. Senate, Hoppner had again served for a year as his chief of staff. Ben Nelson, an attorney and insurance executive. Nelson was making his first bid for elective office. In 1986, he had been the state chairman of Boosalis's unsuccessful gubernatorial campaign. In 1975–76, he had served as director of the Nebraska Department of Insurance.
The other three candidates in the Democratic primary were regarded as unlikely to win; when the election was held, the three combined drew less than 3% of the vote. Don Eret, a farmer from Dorchester, who had served in the state legislature from 1982 to 1986. Robb Nimic, a philosopher and theologian from Lincoln, who had filed as a pauper. Robert Prokop, a forensic pathologist from Wilber, who had held a seat on the University of Nebraska Board of Regents from 1971 to 1982.
Issues
Taxes and school funding
One of the foremost issues in the Democratic primary concerned school funding. In April 1990, the legislature passed LB1059, which made major changes to the financing of public education in the state. Prior to its passage, roughly 70% of the money for primary and secondary schools came from property taxes and other local sources. The expressed goal of the bill's supporters was to increase the state's contribution to school districts from 25% of operational costs to 45%; this would be funded through a 25% increase in the sales tax and a 17.5% increase in the personal income tax. Proponents maintained that the measure would lessen inequality among school districts and would avert a significant increase in property taxes; they also noted that courts in several other states had struck down locally financed educational systems such as Nebraska's. Opponents argued that the increased taxes would prove burdensome to Nebraskans, particularly the poor, and expressed doubt that the measure would prevent substantial property-tax increases. The bill passed; Orr vetoed it, but was overridden.
Of the four leading Democratic candidates, Boyle, Harris, and Nelson declared that they would have vetoed the bill, arguing that it would not in fact lead to long-term property-tax relief. Hoppner expressed enthusiastic support for the measure, "because it's at the heart of the traditional Democratic message of this state, because the people of this state care about our children".
Other issues
Another issue raised in the Democratic primary was the question of whether a state lottery should be established in Nebraska; and, if established, what use should be made of the revenues generated thereby. Of the four major candidates, Harris indicated that he was generally opposed to a lottery. Boyle proposed that proceeds be used for property-tax relief; Hoppner declared that they should be used for special one-time expenses, and not for routine spending; and Nelson maintained that they should be used to augment basic spending on education.
Harris and Hoppner both declared themselves supporters of abortion rights, and were endorsed by the pro-choice organization Nebraska Voters for Choice. Boyle expressed opposition to abortion, and received the endorsement of pro-life organizations Metro Omaha Right to Life and the Nebraska Coalition for Life. Nelson also declared himself an opponent of abortion, but said that if the legislature passed abortion-rights legislation, he would neither veto nor sign it, allowing it to become law without his signature.
All four of the major Democratic candidates asserted that illegal drug use was one of the critical issues in the campaign; Harris stated that it was the number-one issue facing Nebraska and the nation. All four were opposed to drug abuse and crime.
Nelson and junk bonds
In the final two weeks before the primary election, Nelson came under attack from Harris and Hoppner for his involvement with life-insurance holding company First Executive, for which he had acted as a consultant and director; he and his law firm had collected over $1.8 million in fees from the company. First Executive had large holdings in junk bonds, which had recently received a great deal of unfavorable attention related to investment banking firm Drexel Burnham Lambert's February 1990 declaration of bankruptcy, and to Drexel employee Michael Milken's April 1990 conviction for securities fraud. Nelson maintained that he had played no part in the junk-bond investment decisions of First Executive, having only joined the company's board in 1988.
Strategy and spending
Nelson led the field in campaign contributions and spending; by the end of April, his campaign had spent $593,000. In the same time period, Hoppner had spent $326,000; Harris, $156,000; and Boyle, less than $60,000. Nelson was criticized for accepting large contributions from insurance companies in Chicago and California; he had also loaned his campaign over $360,000, a sum far greater than that borrowed by any of the other candidates.
The number of viable candidates complicated the devising of campaign strategies. Under more ordinary circumstances, a candidate could win a statewide Nebraska Democratic primary by winning heavily in five eastern counties, containing just over half of the state's registered Democrats: Douglas and Sarpy counties, which include the Omaha metro area; Lancaster County, including Lincoln; and Dodge and Saunders counties. In this election, however, every Democratic vote had to be sought, which made it necessary to direct campaign efforts to the Third Congressional District, consisting of the western three-quarters of the state. Although the Third District was one of the most Republican congressional districts in the nation, its small population of Democrats might prove crucial in the final vote count.
The four candidates had four different strategies. Boyle's was based on securing a strong lead in Omaha, from voters who had supported him as mayor, and on doing well among conservative Democrats in the Third District, attracted by his pro-life stance and endorsements. Harris expected to win heavily in Lancaster County, and to draw votes from more socially-liberal Democrats throughout the state because of his pro-choice position; he had secured the endorsement of Democratic former governor Frank Morrison, who campaigned with him throughout Nebraska. Hoppner depended on the support of activist and party-line Democrats, drawn by his pro-choice stance, his support for LB1059, and his association with Exon and Kerrey; four days before the election, he received a formal endorsement from Kerrey, and began broadcasting a television commercial in which the senator declared his support for Hoppner.