Before the session even began, we knew the Legislature would be facing some weighty issues. After just the third full week, we see that prediction is accurate. Hearings this week included motorcycle helmet laws, interlocal agreements, concealed weapons, and taxes.

The Legislature has 14 standing committees which are organized on the first day of the session, and as I have noted, I will continue to serve on the Appropriations Committee. We also have several select committees and I was pleased to be appointed to the Performance Audit Committee and to be elected chairman.

The Performance Audit division of the Legislature evaluates whether specified state agency programs are accurately implementing legislative intent. Examples of their recent work include a review of the Nebraska Advantage Act, and overtime paid by Corrections, Health and Human Services and Transportation. Any senator can ask for an audit, then those requests come before the committee and along with the division, we decide what will be taken up.

As a committee, we also go over draft reports prior to their release. A final report from Performance Audit may lead to some additional legislation to improve a program. The Performance Audit staff can request confidential information if they believe they see something of interest, non compliance or even wrong doing, but must maintain that confidentiality.

The Governor delivered his State of the State address to the Legislature on Wednesday. I felt he did a good job of explaining his priorities. Governor Pillen wants to control spending and limit budget growth to a two year average of 1.3%. This would be a very fiscally tight, conservative budget.

The Governor’s tax plan would remove property taxing authority from community colleges and replace it with state funding. In K-12 education, one of the major proposals includes $1500 per student in foundation aid. The Governor also supports “school choice” which would extend some form of funding to students in private education.

Generally speaking, since I’ve been in the Legislature, there have been some good education bills brought forward. With most of those bills, it isn’t the idea so much as it is the funding it requires. The determining factor as to why those bills haven’t passed is the dollar amount, and trying to fit that into our state budget. Governor Pillen proposes taking $1 billion out of the rainy day fund and moving that to education; with $1.3 billion investment in education in the next few years.

Another item in the Governor’s budget is the Perkins County Canal project to get water flowing from Colorado into the South Platte. We put in $53.5 million in the budget last year; the Governor wants to add $574 million for construction of the project. This will show the state of Colorado we have intent to proceed with that project and make sure we get our water. Colorado has no responsibility to give us water unless the canal is built, so that is a very important step.

The Pillen budget also includes $95.9 million for a new corrections facility. We had set aside money the previous two years of around $240 million for construction, but without spending authority. With his proposal, the amount available for building would be roughly $340 million, which studies show will be the amount required to construct the proposed facility. All of those funds will be sitting in a fund with no spending authority until given by the legislature. Another $500 million of the state budget would be devoted to transportation infrastructure.

The Governor suggested legislation that would look at income from ag land. Studies have shown property tax on agricultural land should not be based on sales in the area; but instead on income potential, with several years of data included. There would also be a proposed cap on the increase of 3% per year.

This will be something for taxing entities and home owners to watch in the next few years. With the rapid rise in home valuations, if the levy does not go down when the valuation goes up, then you obviously have a higher tax bill. Holding the levy steady is not the same as providing property tax relief with these rising valuations.

Prior to his address, the Governor met with the Appropriations and Revenue Committee to discuss his budget. The revenue numbers in his proposed budget are based on predictions from the Nebraska Economic Forecasting Advisory Board, which meets quarterly. Their forecast in April will be the one we use to finalize the budget bill and funding requests. The board typically does an excellent job of predicting revenue. They use a formula that has proven pretty reliable, and we generally look at a four year cycle. With the surge of federal funding, revenues have increased in the last couple of years. But looking ahead, with less federal aid, inflation and potential changes in the economy, we need to consider how this will look in years three and four.

Over the interim, I had commented that we have a lot of money in the general and rainy day funds, which may lead to a lot of requests. That has come to pass. The Appropriations Committee has 84 bills that ask for direct funding requests, as well as other committee’s bills with funding attached. Right now we are going through the 93 state agency reports, plus specific programs and commodity boards. We have already seen some funding increases from the Office of the Chief Information Officer (OCIO), Department of Administrative Services (DAS) and Attorney General. We are seeing requests for increases in staff due to workload. For example, the Secretary of State has indicated a need for additional personnel to handle election security questions. All of these requests will be reviewed to see if they fit into the budget.

I always appreciate hearing from you. Contact me at mdorn@leg.ne.gov or 402 471-2620. Thank you for sharing your concerns and suggestions.