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Office of Governor Pete Ricketts

Reining in Spending

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Over the last year and a half, I have shared with you some of the ways my administration has been working to run state government more like a business.  From offering more online services to bringing down call wait times at our call centers, we have been making state government more customer-focused.  In addition to this, we have successfully reigned in growth in state spending and slashed the rate of growth in the state budget by nearly half.

During the last two legislative sessions, controlling spending has been a key step towards providing tax relief to hardworking Nebraska families.  Working with the Legislature, we successfully provided $408 million in direct property tax relief last year, and an additional $20 million in direct property tax relief this year to Nebraska’s farm and ranch families. 

Slowing the growth of government in this biennium not only helped provide tax relief, but it will also be important to allowing us to effectively address a growing gap between projected revenues and actual receipts.  Over the past few months, tax receipts have lagged behind forecasts, due in part to lower commodity prices and a slowdown in the ag sector, our state’s number one industry.  Recently, the Nebraska Department of Revenue announced tax receipts had performed 2.2 percent below the certified forecast upon which the first year of the current biennial budget is based.  While this does not mean the state has a budget deficit, it does mean state agencies will need to cut back and slow their spending.

At the time of this announcement, I met with my cabinet to provide them with new directives on how to manage their budgets and control spending.  In the coming weeks, my Budget Administrator and I will work closely with cabinet members as they manage their budgets and work to identify additional areas to cut spending. 

In addition to the directives to my cabinet, I have already taken action to incentivize fiscal restraint in all state agencies.  Effective immediately, my Budget Office will reduce the quarterly amount allotted to state agencies to encourage them to restrain their spending.  We have also taken another step to encourage restraint.  Traditionally, any unspent funds from the previous fiscal year would be available for agencies.  This year, however, agencies have been directed not to spend those funds as we work to manage the state’s budget.

To support these directives, I am also providing every state agency, including agencies that do not directly report to my office, new budgetary guidance on how to take steps to further constrain their spending.  These steps ask each agency to do four things: 1) review all vacant positions and determine whether it is possible to postpone or eliminate additional hiring; 2) prioritize essential travel and utilize video calls and web meetings when possible; 3) coordinate technology and hardware purchases with other agencies to find efficiencies; and 4) work with other governmental partners to ensure that your taxpayer dollars are wisely managed in the delivery of state services.

In addition to this guidance, I have asked state agencies, boards, and commissions to review any fees and assessments they are responsible for and to determine which ones they believe they can reduce to help spur economic activity. 

Over the coming weeks and months, the Revenue Department and my team will continue to take the appropriate steps to constrain state spending and manage our budgets.  As we manage our budgets, we will be ever-mindful of taxpayers like you, who work to manage family budgets every day.  If you have any feedback on state spending or any other matter, I hope that you will contact my office by emailing pete.ricketts@nebraska.gov or by calling 402-471-2244.