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Sen. John Kuehn

Sen. John Kuehn

District 38

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Letter to the District – Week 5

February 23rd, 2015

The Nebraska Legislature has a constitutional requirement that prohibits general operating debt: effectively requiring a balanced budget. Operational expenditures must not exceed revenue generated in a biennium, the two year budget cycle of state government. The entire budget of Nebraska draws from a number of funds, including General Funds, Cash Funds, Federal Funds, Revolving Funds, and the Cash Reserve. Cash Funds are derived from specific sources, often fees, and are designated to fund a specific program on a cost reimbursement basis. Revolving Funds are how one state agency bills another agency for costs incurred. Federal Funds include the federal share match for programs such as Medicaid, highway construction, and education through federal grants and contracts. The Cash Reserve is often called the “rainy day fund”, which most frequently is funded when revenue received exceeds projected estimates.

Of the roughly $8 billion the the State of Nebraska will appropriate in the coming biennium, approximately $4 billion is in the “General Fund”, which is primarily derived from sales and income tax revenue. When most of us refer to “the budget” we are making reference to the General Fund. The largest components of the General Fund budget for fiscal year 2014-2015 include state aid to K-12 Education (TEEOSA) at 22.3% of the total, followed by Medicaid at 18.9% of the total, and the University of Nebraska and State Colleges at 14.4% of the total. Collectively, these three areas make of 55.6% of the budget in the current fiscal year.

The Appropriations Committee, composed of 9 senators representing each of the three congressional districts, develops the budget proposal which will be presented to the Legislature as a whole. I serve on this committee. Over the past 30 legislative days, the committee has reviewed the budget requests from each department and the budget proposed by the Governor. On Monday, the 23rd of February, the Appropriations Committee will begin public hearings with agencies and sponsors of appropriations bills.

As we move into hearings, I am ever cognizant of my responsibility to taxpayers to appropriate General Fund dollars wisely. Each General Fund dollar appropriated represents roughly 52 cents from individual income tax and 36 cents from state sales tax–dollars directly from Nebraska’s working families. Balancing the needs for services, strategic investment in state programs, and meeting the state’s duties in public safety, education, and infrastructure with the burden to taxpayers is no simple task.

You will note that none of the appropriations from the state General Fund are derived from Property Taxes. Spending authority for Property Tax revenues lies with the local agencies that establish the levy.

I encourage you to check for hearing schedules and, as always, feel free to contact my office with any questions or concerns by phone at (402)-471-2732 or email

Senator John Kuehn, District 38

Sen. John Kuehn

District 38
Room #12th Floor
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2732
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