This week at the Capitol, we held the last of the committee hearings on new bills introduced in January. Committee work will continue in executive sessions until a decision on each bill is made. The options are to move a bill to the floor for debate, hold it in committee or kill it. At this point, only those bills which have been prioritized stand a chance of being discussed by the full legislature, but the committees will still finish their duties. 

The Appropriations Committee will be working on the final budget proposal for the General Fund, to get that out to the floor by Day 40 (Friday, March 11). Then we will have a few more days as a committee to finish up our recommendations for using the American Rescue Plan Act (ARPA) federal funds. These two packages are prioritized and will no doubt generate substantial debate on the floor.

The Nebraska Economic Forecasting Advisory Board (NEFAB) met on Monday and released their projections of where revenue will be in the next four months, taking us to the end of the fiscal year on June 30, 2022.  Their analysis was based on what we have seen the past six to 12 months, as well as prior years, and once again, the forecast was higher. The increase in the FY 2021-22 forecast is considered “above certified” and will be transferred to the Cash Reserve Fund, or “rainy day fund”, bringing the projected balance to $1.713 billion based on the Appropriations Committee preliminary budget. 

There are some revenue measures, bills passed on the floor and other appropriations which will reduce that $1.713 billion figure, but for purposes of comparison, the rainy day fund had never before been above $760 million. When I first took office in 2019 it was in the range of $300 million. This is one indicator of how much federal funding has affected the state, and the strength of Nebraska’s economy.  Almost $24.1 billion non-traditional federal dollars came into Nebraska dealing with the covid situation, which is 22% of 2021 total state personal income.  

In other words, around one-fifth of our personal income in the report could be attributed to the federal funds allocated due to Covid-19. While this helps explain some of the high state revenue growth, it also reminds us that over time the federal money disappears. 

In the Appropriations Committee, we continue to deliberate about how quickly income and revenue might decline in the future or if levels will remain steady for a period of time. Of particular concern is the fact that FY21 and FY22 show the highest and third highest adjusted revenue growth since 1982; yet the low revenue growth years which have always followed the peaks are not yet known.  The forecasting board will meet again in the summer and fall, and those projections will be used to create a new biennial budget in January of 2023.

During morning sessions, we moved a fair number of bills along in the process in the past few days. Most of these were non controversial issues with simple amendments. All of that will change next week as we discuss more high profile issues, including LB 773, a concealed carry bill introduced by Sen. Brewer, the “Star Wars” bill which concerns water projects, and the Perkins Canal proposal by the Governor.

A constitutional amendment was one of the issues voted to the next round of debate, LR 282CA. This measure would be especially beneficial to small and medium sized airports in the state, and allow use of revenue to develop or expand regular commercial air service, including LNK, Lincoln’s airport. Most states do allow this, and several senators commented on how important this is to economic growth and attracting both new business and new residents to our state. 

One of the bills we advanced this week could affect both District 30 and District 32. The bill would allow Nebraska to compete for selection as one of four regional sites for a “clean hydrogen hub”, resulting in jobs,  economic development and potentially some spin-off business. As introduced to the Natural Resources Committee, the bill cites our state as a prime location, thanks to our electric generating capacity and transportation infrastructure. Monolith, located near Hallam, already has an established presence in this industry and is looking to expand.  

Speaking of neighboring District 32, after the filing deadline on Tuesday, only two legislative seats are uncontested among the 24 up for election – Sen. Tom Brandt’s of Plymouth, and mine. It is humbling and gratifying to think the people of District 30 feel I am helping in some way; and I am very thankful for that. I look forward to seeing what more can be accomplished in the next four years.  I always appreciate hearing from you. Contact me at mdorn@leg.ne.gov or call 402-471-2620.