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Budget Games

By Governor Pete Ricketts

May 8, 2017

 

The Governor’s official photo is available here.

 

The State of Nebraska has seen declining revenues over the past year.  This reality has made balancing the state budget without increasing taxes my number one priority during this legislative session.  To achieve this, I have been working to constrain spending since last summer and into this year.

 

Last year, I began 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 funded 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.

 

When I delivered my State of the State address to the Legislature in January, I shared with senators the importance of making the tough decisions necessary to constrain spending.  In the opening weeks of the legislative session, senators and I successfully worked together to make much-needed cuts to the current year’s budget.   

 

As the Legislature has worked on the next two-year budget, we received news that projected revenues are expected to fall even further.  Just a couple of weeks ago, the forecasting board dropped revenue projections an additional $55 million.  When this occurred, I urged the Legislature to focus on making additional cuts to spending instead of relying on additional funding from the state’s rainy day fund or other budget maneuvers. 

 

Unfortunately, senators chose to employ a budget gimmick that places the state budget on shaky ground instead of making responsible spending cuts.  Last week, the Legislature voted to lower the state’s general fund minimum reserve from 3 percent to 2.5 percent for the next two years.  The minimum reserve is essentially the buffer the state maintains in its checking account to avoid unnecessary borrowing from the state’s rainy day fund.

 

Instead of setting priorities and making needed cuts to spending, senators have placed the state’s finances at risk by lowering the minimum reserve in our checking account.  I urge the full Legislature to reconsider this proposal and to roll up their sleeves and get to work on cutting spending to bring the budget into balance.  Making additional cuts now will protect the state budget against uncertain revenue streams, and place the state on firmer financial footing.

 

In the midst of all this discussion about how to balance the budget, there have been some senators proposing additional spending.  Thankfully, others have opposed such proposals on the floor so far.  The focus needs to be on cutting spending, not on creating new programs and proposals.  New spending would only make our budget challenge worse, and make balancing the budget more difficult.  I will not support any effort to raise taxes to balance the budget.

 

The Legislature is debating the budget, and I will continue to work with senators to constrain spending.  Lobbyists and special interests, however, are opposing efforts to constrain spending.  They are paid to spend your money. 

 

If you want to see the Legislature cut more spending instead of relying on budget gimmicks that could endanger our state, your senator needs to hear from you.  You can find all their contact information at www.NebraskaLegislature.gov.  As always, I hope you will contact me if you have concerns.  My office can be reached at pete.ricketts@nebraska.gov or 402-471-2244.

 

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