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Office of Governor Pete Ricketts

Cutting Government Spending

 

By Governor Pete Ricketts

January 30, 2017

 

The Governor’s official photo is available here.

 

Protecting taxpayers and crafting fiscally responsible budgets have been a hallmark of Nebraska Governors for decades.  Each legislative session, the Governor of Nebraska presents budget recommendations to the Appropriations Committee for consideration, and works with State Senators to balance the state budget.  As your Governor the last two years, I have collaborated with the Legislature to cut the rate of growth in government and build a culture in state agencies that respects the taxpayer through more effective and more efficient state government.  With a downturn in state revenues, I have made cutting government spending and balancing the state budget without raising taxes my top priority in the current legislative session. 

 

To address the downturn in revenues, I have worked with my state agencies to constrain spending, and have recommended adjustments to the current year’s budget as well as a new two-year budget.  Four principles guided my work on these budgets this year.  First, the budgets do not raise taxes.  Second, the budgets are balanced.  Third, the budgets reduce government spending.  Fourth and finally, we targeted keeping a healthy cash reserve, also known as the state’s rainy day fund.

 

It’s only a few weeks into the session, and our work on balancing this year’s budget is quickly progressing.  Last week, the Appropriations Committee led by Chairman John Stinner advanced cuts to the current year’s budget for consideration by the full Legislature.  It is important to make these adjustments to the Fiscal Year 2017 budget, because they will serve as the basis for the next two-year budget.  At the time I made recommendations to the Appropriations Committee, I urged the committee members to advance the adjustments for consideration by the full Legislature by the first week in February.  Thanks to the leadership of Chairman Stinner and the committee for their quick action!

 

Addressing the current year’s budget is just the first step.  The Appropriations Committee will now turn to consideration of my recommendations on the next two-year budget.  My budget recommendations for Fiscal Year 2017-2019 prioritize four key principles.  First, it includes $440 million in direct property tax relief, including $40 million in targeted property tax relief for agriculture.  Second, it increases funding for K-12 education by $90.3 million for a total of $2.05 billion in funding, a historic high.  Third, this budget proposal continues Corrections reform with investments in security equipment and facilities to protect public safety.  Fourth, it protects critical services in Health and Human Services, and funds requests to upgrade technology to improve services. 

 

Before I took office, the budget was growing at a rate of 6.5 percent a year.  In the last two years, we slowed budget growth to about 3.6 percent annually, and my new proposal cuts the rate of growth even further.  Overall, this budget has a nearly flat growth rate of 1.7 percent.  Bringing the rate of growth in the budget down is important because we are required to balance the budget now, and it will create the opportunity to provide tax relief in the future.

 

As we have worked through cutting budgets with state agencies and organizations that received funding from your tax dollars, I have called upon everyone to participate.  In the Governor’s Office, we have constrained spending, and are operating with three fewer team members—a 13 percent reduction from a year ago.  There are three groups in particular that I would like to highlight for their efforts to constrain spending.  The Nebraska Tourism Commission testified in front of the Appropriations Committee, saying they were supporting our efforts by the Legislature to cut state spending.  The Nebraska Game and Parks Commission also recently committed to working with the Legislature and me to manage budget reductions.  Additionally, the Nebraska Association of Resource Districts released a policy statement from their members stating they are “willing to accept our fair share of reduction in funding for natural resource programs” to balance the budget.  Thanks to the Tourism Commission, Game and Parks, and the Resource Districts for supporting our efforts to cut spending and respect Nebraska taxpayers!

 

As the Appropriations Committee moves to consideration of the next two-year budget, I urge them to keep the focus on constraining spending and balancing the budget without raising taxes.  This work is not easy.  Special interests and lobbyists continue to push back on efforts to cut state spending.  As senators work on these budgets, they are listening.  You can find contact information for your senator by visiting www.NebraskaLegislature.gov.  You are also welcome to contact my office by calling 402-471-2244 or emailing pete.ricketts@nebraska.gov.

 

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