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Budget Balancing Progressing

By Governor Pete Ricketts

February 17, 2017

 

The Governor’s official photo is available here.

 

Balancing the budget is not only a tradition in Nebraska, but it’s also a requirement because our state cannot borrow money to finance the state’s budget.  Just like Nebraska households, state government does not spend money we do not have.  This principle is so foundational to who we are as a state that Nebraska’s Constitution places strict limits on the state’s ability to borrow in Article XIII.  This fiscal responsibility has earned Nebraska the distinction of ranking second best in the nation for fiscal health according to the Mercatus Center at George Mason University.

 

Lagging tax revenues caused in part by lagging commodity prices have put the budget front and center during this legislative session.  Since June 2016, I have been working with my agencies to prepare for budget cuts to address the gap between appropriations and revenues.  Last month in my State of the State address, I unveiled budget plans that will allow us to balance the budget and address the revenue gap without raising taxes.  Accomplishing this goal is my number one priority this session.  We must put the taxpayer before special interests by balancing the budget without raising taxes.

 

To this end, I am working with the Legislature to balance the current year’s budget as well as pass a new budget for the next two years.  This week, I signed LB22, a bill to enact cuts to the current Fiscal Year 2017 budget.  Thank you to Appropriations Committee Chairman John Stinner and his entire committee for their swift action.  They worked quickly to move LB22 through hearings and three rounds of floor debate!  To put this in perspective, we have not passed two budget packages during a single session in recent memory.  LB22 cuts $137 million from the current year’s budget while protecting key investments in K-12 education, continuing Corrections reform, and supporting programming for our most vulnerable Nebraskans.

 

While LB22 was a key step towards balancing our budget and addressing the revenue gap, there is still much more work to do.  The Appropriations Committee is now considering my recommendations for the next two-year budget for Fiscal Years 2018 and 2019.  They will release preliminary recommendations and hold hearings on the next two-year budget proposal before moving a budget package out of committee for consideration by the full Legislature.

 

The recommendation I outlined in my State of the State address balances the budget for the next two years without raising taxes.  Spending constraint is critical to balancing the budget.  Prior to becoming Governor, the state budget was growing at about 6.5 percent.  In my first budget, I worked with the Legislature to cut the rate of budget growth to 3.6 percent.  My current budget proposal limits government growth to 1.7 percent. 

 

My two-year budget does not cut the Property Tax Credit Relief Fund, and fully funds $400 million in direct property tax relief for all property taxpayers as well as $40 million in direct property tax relief for ag land taxpayers.  Additionally, I proposed increasing state aid to schools by 2.7 percent on average over the next two years, or nearly 60 percent faster than the rest of the state budget is growing.  This budget also builds on critical reforms in the Department of Corrections by financing additional workforce initiatives, capital improvements, and security upgrades.

 

These next steps will also include tough decisions.  Every agency is contributing in some way towards balancing the budget by cutting back on spending.  My own office is reducing our budget and has 13 percent fewer team members than a year ago.  There are many tough decisions ahead, but I know that we can balance the budget without raising taxes by working together.  I look forward to working with the Appropriations Committee and full Legislature as they consider my recommendations.

 

As work on the budget process and legislative session progresses, I hope that you will stay in touch with your senator.  Both senators and I want to hear from you about your priorities and concerns.  Contact information for your senator is available at www.NebraskaLegislature.gov.  My office can be reached by emailing pete.ricketts@nebraska.gov or by calling 402-471-2244.  We look forward to hearing from you!

 

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