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Balancing Our Budget

By Governor Pete Ricketts

January 6, 2017

 

The Governor’s official photo is available here.

 

Each year, senators come together to address important priorities on behalf of our state’s taxpayers.  In this first week of January, Nebraska’s citizen legislature returned to Lincoln.  The gravity of the responsibility of what is before us this session is humbling.  The Legislature and I need to get to work balancing our budget, controlling spending, and delivering much-needed tax relief for the citizens of Nebraska.

 

The budget will be the number one priority we deal with during this legislative session.  Over the past several months, tax receipts have been lagging.  In the last fiscal year, receipts came in $95 million below forecast.  In October, the forecast for the current fiscal year was revised downward by $172 million, leaving a gap of $267 million between forecasted receipts and current appropriations.

 

Over the past several months, I have been working with state agencies to manage their budgets in anticipation of working with the Legislature to address the gap between projected revenues and appropriations.  In July, I provided guidance to my cabinet and all state agencies, urging fiscal restraint.  In October, I placed a freeze on non-mission critical hires and a travel ban on non-essential, out-of-state travel.  Additionally, my State Budget Office reduced allotments, or the amount of money made available to an agency, as well as carryover appropriations for state agencies.

 

This year, we have two budgets on which to work.  The first is the current year’s budget, which we must adjust to close the gap between revenue and appropriations.  The second is the next two-year budget, which will cover Fiscal Years (FY) 2017-2019.  The budgets I am delivering are balanced, will not raise taxes, and will reduce government spending.

 

To address the gap in the current year’s budget, I delivered budget adjustment recommendations to the Legislature this week.  This budget makes $276 million in adjustments necessary to restore balance to the budget by reducing government spending and realigning existing revenues from other sources.  The budget adjustments do not raise taxes.  I am urging the Appropriations Committee to make this a priority and to get the FY 2016-2017 budget bills to the legislative floor by the first week in February.

 

In preparing these adjustments, I worked to protect investments in education.  My adjustments delivered to the Legislature increase TEEOSA, state aid to K12 schools, by $316,161, which is also a slight increase over the historic high we set for state support for TEEOSA and Special Education this year.  Additionally, my office collaborated with the University of Nebraska as they worked to adjust their budget to help them protect their priorities and plan adjustments accordingly.  

 

My budget adjustments also support continued reform in key agencies such as the Nebraska Department of Correctional Services (NDCS) and Department of Health and Human Services (DHHS).  Over the past two years, the Legislature and I have been working together to chart a new course for NDCS to protect public safety.  To continue reform, my adjustments exempt the agency from across-the-board cuts.  In DHHS, I protected priorities such as our veterans’ homes and public health aid, and we were able to provide additional resources for critical programming in the areas of child welfare and developmental disabilities.

 

The budget adjustments for FY 2016-2017 are just the first step.  On January 12th, I will deliver my annual State of the State address.  In the address, I will unveil my next two-year budget for FY 2017-2019, which will follow the same principles that guided my adjustments to the current budget.  In this address, I also plan to talk about several other legislative initiatives.

 

This session will be full of tough choices as the Legislature and I work together to balance the budget and address other important priorities.  During the session, lobbyists will try to protect their interests over the taxpayer, so we must remain vigilant.  I urge you to reach out to your senator and express your desire for fiscal restraint.  You can find their information by visiting www.NebraskaLegislature.gov.  I welcome your input as well, and you can contact my office by emailing pete.ricketts@nebraska.gov or by calling 402-471-2244.

 

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