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In last week’s column, I wrote extensively about revenues collected by the State of Nebraska and local governments including property, income, sales and use taxes. If you missed reading the first installment, I invite you to visit my website: http://news.legislature.ne.gov/dist24/. As promised, this week I will be writing about government spending, focusing on programs either totally or partially funded by general funds.
For most people, governmental accounting seems backwards. That’s because it does not have the same fundamental goal that financial accounting has for the private sector. For individuals and businesses, a budget is a financial planning tool to achieve the main objective of maximizing wealth or profit. Therefore, a budget is simply a guide. In governmental accounting, a budget establishes specific fund balances created during a budget process for a specific purpose based upon the most effective use of public resources over a specified period of time.
In the State of Nebraska, the Governor is required by the State Constitution to present a budget bill to the Legislature every two years. Upon receiving the Governor’s budget proposals, the Legislature’s Appropriations Committee holds public hearings and make recommendations to the full Legislature to provide funding to the various state agencies and programs for budgeted fund types. Since Nebraska utilizes a biennial budget for revenues, appropriations and expenditures, the budget is split into two Fiscal Years beginning on July 1st of every odd numbered year. This budget process will start again early next year during the 90-day first session of the 106th Legislature.
Nebraska Department of Administrative Services Budget Division has grouped expenditures into eight functional areas: Agriculture, Environment and Natural Resources; Economic Development and Regulatory; Education and Cultural Development; General Government; Health and Human Services; Law Enforcement and Public Safety; Public Finance; and Transportation. Only 48 of Nebraska’s 78 state agencies fund part or all of their operations with general fund revenues. The other 30 agencies operate utilizing other revenue sources such as cash (user fees), federal or revolving funds. General funds represent about 41% of the total funds appropriated to fund state government. Below is a summary of general fund expenditures broken down by functional area.
|Expenditures||FY2015||FY2016||FY2017||Chg. FY15 – FY17||% Chg. FY15 – FY17|
|Agriculture, Environment & Natural Resources (15)||$50,247,843||$40,839,279||$40,128,175||$(10,119,668)||-20.1%|
|Economic Development and Regulatory (19)||$17,317,681||$18,112,075||$17,997,840||$680,159||3.9%|
|Education & Cultural Development (12)||$1,917,585,850||$1,979,016,145||$1,995,070,684||$77,484,834||4.0%|
|General Government (3)||$21,173,439||$22,674,557||$22,461,388||$1,287,949||6.1%|
|Health & Human Services (6)||$1,514,089,955||$1,576,373,139||$1,614,352,730||$100,262,775||6.6%|
|Law Enforcement & Public Safety (12)||$441,183,028||$467,497,289||$478,525,132||$37,342,104||8.5%|
|Public Finance (7)||$155,452,953||$160,665,103||$176,212,462||$20,759,509||13.4%|
|Transportation (4)||$ –||$ –||$ –||$ –|
It is important to note that the four transportation agencies – Motor Vehicle Industry Licensing Board and Departments of Aeronautics, Motor Vehicles and Roads – are funded by cash or federal funds. Also, please be assured that the 20% reduction in Agriculture, Environment and Natural Resources was not a massive budget cut. In reality, the Legislature made a one-time transfer of $10 million in FY2015 to establish the Water Sustainability Fund through LB906 passed in the 2014 session. It was financed by a similar transfer from the Cash Reserve Fund to the General Fund. Also, increasing the Homestead Exemption and implementation of the Personal Property Tax Exemption created the 13.4% increase in Public Finance.
In next week’s column, I plan to provide additional details about some of the other programs that are driving the increases in government spending including education, human services and public safety.
In the meantime, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is email@example.com, and the office phone number is 402-471-2756. Todd and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance.