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Two weeks ago, the legislature passed a budget, and sent it to the governor. At that time, I had several concerns about the budget as passed, and spending in general.
General fund appropriations have increased at an average rate of 5.3% per year during the four fiscal years ending June 2013 to June 2017. During that same time however, our state’s population grew less than 1% per year, and the Consumer Price Index increased at an annual rate of 1.2%. So our state’s spending has been growing at more than twice the rate of population increase and inflation combined.
And now, we’ve encountered a revenue shortfall. My concern is that with the state of our agricultural economy, this revenue shortfall may not improve anytime soon.
To pass a balanced budget, while not raising taxes, several steps were taken. The cash reserve, or rainy day fund, which only a few years ago was over $700 million, will be drawn down to roughly $370 million; over $200 million was raised by one time transfers from various cash funds; our general fund reserve, previously at 3%, was lowered to 2 ½%; and various spending reductions were instated. But even with these reductions, state spending will again increase in the upcoming fiscal year and beyond, albeit at a lower rate.
Faced with this, the governor vetoed roughly $56 million from the budget as passed, returning the general fund reserve to 3% and reversing a transfer from the Roads Operations Cash Fund.
Last week, several senators offered motions to override many of the governor’s vetoes. I voted against these override motions. I made my decision out of concern over spending in general, but also after examining the pattern of spending relative to each category vetoed by the governor.
Specifically, I compared the FY ’15-’16 appropriations to the FY ’17-’18 appropriations after the governor’s veto. In other words, I asked “what is the two year spending trajectory of these programs even as reduced by the governor’s veto. In the case of probation general fund appropriations, for instance, even after the veto it would be up 28.23% from where it was two years ago. Child Welfare would be increased by 16.5%, State Court Operations by 13.51%, Medicaid by 4.3%, Behavioral Health by 4.07%, Developmental Disability by 2.52%, and the University by 1.19%.
So over a two year period (and in most cases over a one year period from FY ’16-’17 to FY ’17-’18), the vetoes are not truly cuts to these programs. Instead, they simply reduce the increases and flatten the trajectory of general fund increases to a more sustainable level. As a result, I felt that sustaining the governor’s vetoes was consistent with the obligation of being a good steward of taxpayer’s dollars.