The Legislature focused squarely on the two-year state budget last week. Rightfully so, as the Unicameral debated future expenditure of $7.8 billion in General Funds.
Aid to education and health care assistance make up a majority of the budget. Each area has experienced uncomfortable growth rates; especially health care outlays. With passage of the federal health care act, our state budget will experience even more costs.
Projections for increased enrollment will greatly expand the Medicaid program. Due to the upcoming insurance mandate from the federal government, we expect approximately 75,000 new enrollees.
Over one-half of these persons already have private insurance, but will drop it in order to receive Medicaid. This is a particularly objectionable consequence of the federal health care act.
The remaining portion of new Medicaid enrollees are currently eligible, but have chosen not to participate. Due to the federal insurance mandate and associated tax penalties, these persons are expected to sign up to avoid Internal Revenue Service sanctions.
One hundred seventy-two new state employees will be required to process applications and determine eligibility for the increased number of Medicaid recipients.
$7 million in state funds are required to establish the information technology systems needed to respond to the federal health care act.
All of these new costs made it a challenge to craft the budget since we had no say in the matter; the federal government dictated these costs.
Throughout the week, we debated amendments to the budget package submitted by the Appropriations Committee.
Several senators, including me, sought to provide more tax relief as part of the budget.
An amendment was offered to reallocate more resources to the state’s Property Tax Credit Program. This program reduces the need for local property taxes by replacing those funds with state resources. The amount sought would have increased the program amount to $245 million.
Unfortunately, only 14 senators supported us on the amendment (it required 25 votes). Opponents said that any new tax relief should wait until the Tax Review Commission finishes a study. I disagreed and said that the time is always right to reduce Nebraska taxpayers’ property tax burden.
One amendment was agreed to that reduced state expenditures. A majority voted to remove a line-item that would have spent over $2 million to purchase an airplane from the University of Nebraska Foundation. While the supporters of the amendment recognized the need for appropriate air travel options for the Governor and other state officials, the Legislature was not comfortable expending these state taxpayer dollars until a thorough review was conducted to make sure the state is getting the best deal possible.
The budget package still has two more rounds of debate before passage into law. It is my hope that we can further reduce the level of spending before the final vote.